Why MSPs Are No Longer Just for Large Contingent Workforces

Are we too small to benefit from an MSP? This is one of the most frequent questions I am asked when meeting with HR and Procurement leaders. Initially MSP services were reserved for large, enterprise organisations with contractor populations of 150+ and an annual spend of more than £30m.

Over the past 12 months, we have seen a significant increase in organisations turning to MSP for the first time. Many of these companies have had smaller contingent worker populations, ranging from 25 to 125 and an annual spend in the region of £5m and £20m. This growing trend was confirmed by Staffing Industry Analysts in their 2024 MSP Global Landscape Survey, when, for the first time they added a question as to whether MSP providers had ‘off the shelf’ programs for small to mid-market clients.

There are several reasons why small to mid-market clients are turning to MSP partners to manage their contingent workforce:

Cost Savings

Limited growth and rising costs in the UK economy has placed a premium on cost control and cost savings. The increased visibility of spend, process efficiencies, economies of scale and cost management initiatives delivered by MSP partners can help companies achieve both immediate cost savings and sustainable efficiencies over the term of the contract.

Governance, Compliance and Risk Mitigation

Ensuring compliance with all regulatory and legal requirements for contingent workers, in particular IR35 and AWR in the UK is vital to organisations of all sizes. Many SME clients find the need to balance effective governance with flexibility and agility a challenge and, without dedicated headcount to manage the contingent workforce, turn to MSP partners to help them navigate the process effectively.

Innovation and future proofing

Whilst many SME clients have established talent acquisition teams, Applicant Tracking Systems and sourcing tools as part of their HR Tech stack, it is rare that this investment includes contingent worker hiring. MSP providers provide expertise in HR Technology and can provide advice, implement and support the optimum technology and tools to effectively manage your contingent workers. Furthermore, with an MSP partner you can expect continuous improvement, innovation and future proofing to play a consistent part of the governance process, meaning that your contingent workforce strategy can evolve, adapt and improve over time.

Consistent access to high quality Contingent Talent

A key concern for organisations who are considering MSP for the first time, particularly those with small to medium sized contingent populations is whether an MSP will compromise access to the high-quality contingent talent often associated with specialist recruitment agencies. The right MSP partner can help increase the quality of talent by combining outstanding candidate sourcing with effective resource planning, consistent screening and streamlined processes.

When meeting clients for the first time, we focus less on the number of contingent workers they have and their annual spend (without the visibility provided by an MSP this is often not known), and ask 5 simple questions:

• Are contingent workers a consistent part of your resourcing strategy?
• Would you like to access the best contingent talent in the most cost-effective manner?
• Do you struggle to gain visibility of contingent workforce spend across your business?
• Is it important that your contingent workforce complies with local regulations and legislation?
• Does recruiting, managing, and onboarding contingent workers take up more time than you would like?

If the answer to some of these questions is yes, then MSP could be the right solution.

How Sanderson can help

Sanderson has a long history of helping companies to understand the benefits and successfully transition to MSP solutions. More than two thirds of our MSP clients are ‘first generation’ and cover a wide variety of industry sectors.

Find out more about how we help our clients with our MSP service here, or feel free to get in touch with me if you’d like you like to have conversation about managing your contingent workforce. [email protected]