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What does an MSP do? - Staffing Solutions for your Organization

A Managed Service Provider (MSP) is an agency that specializes in outsourcing certain processes and functions in order to cut costs and improve performance. MSPs act as an alternative to the on-demand outsourcing and the break/fix outsourcing models. While on-demand and break/fix models bill the customer when work is done, MSP takes a more holistic approach and works under a subscription model.


What is a Managed Service Provider


MSP services are very diverse and often include information services, business to business integration, supply chain managed services, logistics, transportation, marketing, media, energy, communication or environmental services. MSPs are prevalent in human resources and staffing functions, particularly in the healthcare sector.

In a managed service model, the client retains direct oversight of the system being managed (staffing), while the MSP provides the managed service and manages the quality, availability and cost criteria. The service criteria are detailed in a service-level agreement that specifies the performance metrics of the commercial relationship.

Find out how a market analysis of hiring trends in your area can guide the decision to engage an MSP.

What is MSP Staffing?

MSP are an effective approach to managing a company's staffing and human resources needs. The workforce, both temporary and full time, is managed by the MSP’s team of experienced professionals, according to the client’s requirements.

MSPs work as a complete solution for your HR and staffing needs, including procurement of the workforce and management of staffing, invoicing and payments. Coupled with a vendor management system (VMS), the MSP gives a complete picture of each contingent worker in the organization.




A good MSP also guides clients to compliance with all government requirements, labor regulations and legal issues through a consistent, rigorously designed process. MSPs are also expert in providing guidance on hiring and management of the workforce with effective talent analytics tools.

Should you use MSP in your organization?

Most MSPs are geared at medium to large organizations which can meet a volume threshold necessary for the program to be reliable and self-sufficient. MSPs for staffing and human resources typically require a minimum budget.

Here are some questions you should ask before deciding on an MSP for your staffing needs:

  • Does our human resources and staffing department adequately mitigate risks and control costs?
  • Are we meeting labor regulations and legal requirements regarding staffing?
  • Have we paid any penalties for non-compliance?
  • Do we have an effective talent management and acquisition program?
  • Do we have a rigorous vetting and reviewing process for our staff?
  • Do we use a robust VMS to achieve spend visibility and benchmark metrics with easy to use reports?

If the answer is NO to any of these questions listed above, your organization should consider an MSP for staffing with consideration of your organization's goals, special requirements and, most importantly, whether the program can help you achieve your objectives on budget within the desired time frame.

What are the Benefits of MSPs

Companies and organizations that use a flexible approach to talent spend are often overwhelmed with the details of workforce management. It's not uncommon for hiring managers to outsource their talent acquisition, leaving human resources departments unaware of who joins and who leaves the organization. Moreover, human resources departments may be swamped with certain management issues, such as compliance with labor and legal regulations and industry specific requirements. This disjointed approach can lead to increased costs, poor performance and further legal issues and penalties. Risks include physical safety concerns, cyber security breaches, regulatory adherence issues, high labor costs, and fraud, among others.


Benefits of MSP


Here are some of the benefits of MSP staffing implementation:

  • managing talent with enhanced access to talent and help with talent acquisition
  • decreasing procurement costs, improving efficiency and monitoring controls through greater visibility of spend and spend analysis
  • reducing process complexity
  • lowering costs of hiring, human resources management, invoicing and other areas
  • improving regulatory compliance and adherence to industry-specific requirements

What is the cost of MSP implementation?

There are two main pricing models for MSP implementation - client-funded and supplier-funded:

  • client-funded models – the client organization or company pays a fee to an MSP partner. The fee may be fixed or variable, and billed is monthly, quarterly or yearly, depending on the contract. Client funded models may seem a little more expensive, but they can be more beneficial, as the supplier is often required to deliver a higher quality of talent more quickly.
  • supplier-funded models – in this model, a percentage of invoices billed by the supplier of the actual service is held back by the MSP. The percentage can be fixed or variable, depending on the contract, and it is used to cover the program costs. This model, also known as “percentage of spend under management”, is popular because there are no direct costs to the client. The negative aspect is that in low mark-up markets, some MSPs may be unwilling to participate or may hold back their best talent from certain clients.

Additional pricing models include gain-share and cost-plus. In gain-share models, an MSP shares in the demonstrable return-on-investment from its good performance. In cost-plus models, the costs are transparent to client, helping them to manage risks. 

What are the staffing challenges in the healthcare industry?

With staffing being the biggest* cost in healthcare organizations, it's critical to both find the best workers in the industry and to manage them properly. A good MSP staffing program for healthcare organizations reduces the cumbersome and expensive issues that can happen during talent acquisition, hiring, invoicing and talent management. By engaging with an effective MSP, your company will learn how to spend money the smart way: streamlining and simplifying the staffing process, increasing efficiency and productivity, while adhering to regulations.


Staffing Challenges in the Healthcare Industry


So how do MSPs overcome staffing challenges in the healthcare sector? Simply put, MSPs improve efficiency on multiple levels through a holistic and expertly managed approach.


  • MSPs have access to a diverse network of healthcare professionals, vendors and suppliers. These are combined with excellent recruiting and acquisition strategies, which guarantee access to the right type of professional for the organization.
  • MSPs employ a complete workforce optimization and continuous improvement plan, maximizing workforce investment.
  • MSPs are a strategic partner for all staffing and human resources needs.
  • MSPs provide data and analytics, as well as reports to optimize workforce planning, scheduling and forecasting.

A market analysis of hiring trends in your area can guide the decision to engage an MSP. Contact the experts at Healthcare Workforce Logistics today to learn more: info@hwlmsp.com.





June 29, 2021/By Trevor Strauss, MBA
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Author: Trevor Strauss, MBA

Since 2008, Trevor Strauss has focused on strategy, solution design, and delivery within the healthcare marketplace from both a human capital and technology perspective. These programs have ranged from search to customized workforce solutions.
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