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A Guide to Choosing the Right Managed Service Provider (MSP) for Your Staffing

Managing an internal staffing process to hire talent remains an expensive and risk-prone proposition for many businesses. For example, advertising an open position might result in a high number of applicants, hampering your human resources (HR) team’s productivity. Simply reviewing dozens of resumes requires a considerable amount of time. This inefficiency causes increased expenses and the risk of the wrong hiring decision.

This scenario illustrates the importance and growing popularity of Managed Service Providers (MSPs) in staffing. Staffing agencies offer MSP programs to help them specialize in finding top talent for businesses in all industries. These efficient programs help reduce expenses and time-to-hire for clients while also offering a predictable and repeatable process that results in quickly hiring the professionals your business needs.

If your business wants to explore a partnership with a managed staffing services provider, check out this helpful guide. We explore the increased importance of staffing MSPs for the modern recruiting process. Additionally, you will learn about the most important attributes to look for in a potential MSP partner. You may leverage these insights to make the right choice on a staffing MSP provider.

Understanding the Growing Importance of Staffing MSPs in Modern Recruitment

The Managed Service Provider concept first gained popularity within the IT world, driven by the growth of cloud computing. Companies in different business sectors outsourced a variety of technology functions MSPs. As a result, these businesses reduced costs, improved efficiencies, and gained an improved focus on managing their operations.

The world of talent acquisition also benefits from adopting an MSP program. Managed Service Providers in staffing are experts in the process of sourcing and recruiting talent. The best MSPs boast well-honed and efficient processes that optimize nearly all aspects of recruiting. Businesses using an internal process may lack some of these capabilities, making the Managed Service Provider approach a wise strategy.

Staffing MSPs leverage AI-powered technology platforms to find candidates who match the skill requirements of an open position easily. Generative AI, similar to ChatGPT, handles initial applicant communication, helping recruiters save time. The top MSP programs in staffing also boast knowledge in multiple industry sectors, understanding the unique attributes of each. They ultimately provide businesses with reduced costs and lower risk whenever they need an influx of talent.

Knowing your staffing needs are managed by knowledgeable employment experts allows you to focus on business operations further. This provides a great option for companies with a variety of talent needs: temporary workers, temp-to-hire contracts, or permanent positions.

What Capabilities to Look for in a Staffing MSP

Understanding the unique capabilities of a staffing Managed Service Provider program informs the process of finding the right one for your business. Utilizing the following insights can help you craft a rating system to differentiate between potential MSP partners. In fact, this process shares many similarities with comparing two equally qualified candidates for an open position.

Look for Staffing MSPs that are Industry Specific

You ultimately want a Managed Staffing Services Provider with experience in your company’s business sector. A history of success in your industry ensures they understand the unique aspects of finding talent for your business. This includes the relevant skills and experience in identifying the top candidates.

When meeting with potential staffing MSPs, you may ask to see a list of clients from your business sector and can then contact representatives from these organizations to verify the relevant experience of each agency. Any insights gained will be helpful as part of your MSP rating system.

Assess the MSP’s Technology Tools

We previously mentioned the importance of modern AI-powered tools in the process of talent acquisition. The top Managed Staffing Service Providers rely on state-of-the-art vendor management system (VMS) platforms to find talent quickly. These systems also leverage generative AI to handle candidate communication or even write compelling job ads, which helps their recruiters greatly optimize staffing processes.

During your conversations with potential MSP program providers, it is helpful to ask a few questions on the topic of technology to find out their approach to embracing the latest innovations in VMS software and other HR-related tools. An agency that fully leverages high-tech software likely boasts efficient operations, and partnering with one helps your business futureproof its full-cycle talent process.

Ensure Support for Diversity and Inclusion Initiatives (DEI) from the Staffing MSP

Diversity, equity, and inclusion remain important within the business world. Companies in a variety of industry sectors benefit from employing a diverse workforce. This approach provides different perspectives and insights that add business value in a myriad of ways. If DEI is an important part of your company culture, it is advantageous to partner with an agency that shares the same outlook. Researching each potential MSP in staffing offers some insights into their approach towards diversity and inclusion.

You may also reach out to colleagues from your professional network to see if anyone previously worked with an agency that prioritizes DEI and utilizes an approach that identifies a diverse pool of candidates. Their experiences might offer the right insights for your decision-making process.

Consider a Minority-owned Business as Your MSP

Partnering with a minority-owned business as your MSP program provider has benefits, including tax incentives, supplier diversification, diversity focus and growth, increased profitability, and enhanced innovation through broader viewpoints.

When assessing MSP partner options, consider whether these added benefits of selecting a minority-owned Managed Service Provider are right for your employment needs and business goals.

Assess the MSP’s Ability to Adapt to Changing Business Needs

Most businesses thrive when they stay nimble, flexible, and able to handle any changes within their industry sector. Obviously, it makes sense to partner with a staffing MSP that includes a similar approach. The ability to quickly add talent to handle sudden periods of high demand remains critical. In short, an agency’s adaptability serves as an important competitive differentiator.

Of course, having efficient processes for sourcing and recruiting talent reduces time-to-hire. This capability plays a crucial role in an MSP’s ability to help you manage changes in your business. Offering insights into your business on its strategic workforce planning also ensures your company enjoys significant growth potential, which is why it is important to explore this capability when comparing different Managed Service Providers.

Evaluate the MSP’s Approach to Candidate Engagement

Providing applicants with an exceptional candidate experience plays a critical role in securing their talent. This rule applies to both businesses using an internal hiring process and MSPs staffing talent for their clients. You want an MSP partner that makes candidates feel valued and important.

This is another area illustrating how modern VMS tools greatly optimize the hiring process. Having a tool to manage communication with all applicants lets recruiters focus more on the top candidates, which provides the quality of experience they deserve, ensuring your business has access to talented professionals. Be sure to ask each potential MSP partner a few questions about candidate engagement.

Rate the MSP’s Compliance and Risk Management Experience

An important capability for staffing MSPs involves their experience in handling regulatory compliance and risk management issues for clients. It especially helps businesses employing a contingent workforce that spans different cities, states, or even countries. Dealing with the various tax laws and employment regulations can be difficult for HR teams to manage, especially with vast geographic areas to cover.

Closely explore these issues when meeting with the staffing MSPs on your shortlist. Simply looking at their client list highlights their experience with businesses that have multiple work locations or offices employing people in different locales. An agency that prides itself on its regulatory compliance and risk management expertise ultimately makes a great partner.

Find a Staffing MSP That Offers Flexible Contract Options

We previously covered the importance of a Managed Services Providers’ ability to quickly adapt to business changes. In a similar manner, you want a staffing MSP that provides candidates interested in a variety of contract options. This typically includes temporary or contingent contracts, temp-to-hire arrangements, or direct-hire employment opportunities.

Supporting different contract options provides your business with the flexibility it needs to stay nimble. Additionally, leveraging a temp-to-hire option reduces the risks associated with a direct-hire employee. No matter your specific talent needs, finding an MSP partner that supports them is key to your business’ success.

Understand the Pricing Model of Each Staffing MSP

Of course, understanding the pricing model of each potential staffing MSP partner is an important step in your selection process. While some programs charge a fee to the hiring company, many are structured as supplier-funded with no client fees. It is important to pay attention to the details of the potential agreement to understand how an MSP collects its fees. While nearly all agencies reduce costs for their clients, the level of savings varies.

When vetting different MSP program providers, prepare a few scenarios detailing different talent needs with a variety of employment types. Ask to see a sample invoice to gain meaningful insights on various pricing models, helping you make an informed decision on a partner.

Partner with the Right Staffing MSP for Your Business Needs Today

If you want to reduce your staffing expenses and time-to-hire, consider partnering with the team at Dahl Consulting (DAHL). We provide our clients with talented candidates through customized and dynamic MSP programs backed by state-of-the-art VMS technology. Get in touch with us to discuss a partnership with the experts at DAHL! We look forward to hearing from you.