Labor shortages are affecting industries of all types, from manufacturing and healthcare to hospitality, customer service, and everything in between. According to the Bureau of Labor Statistics (BLS), there were 9.2 million job openings in May of 2021 and only 5.9 million hires, just to point to one example.
As pandemic restrictions ease, the demand for more workers has risen, but the supply is not there to fill it. And you’ve probably heard about the “Great Resignation” affecting various industries—workers are resigning in record numbers or not returning to work after pandemic-era layoffs. Add to that an aging Baby Boomer population that’s starting to retire fast, as well as more and more parents staying home for childcare purposes, and you have a shortage of labor that isn’t likely to go away soon.
Historically, contingent labor solutions have been used to combat labor shortages—and that’s still true today. Organizations can utilize the strategic power of a contingent workforce to fill talent needs and meet operational objectives even in the face of staff shortages. Contingent laborers, whether they’re freelancers, independent contractors, or temporary workers, help fill those crucial roles and keep operations moving forward during a time when hiring permanent employees may be more difficult.
Managing a contingent workforce is a big and complex job. That’s where a managed services provider (MSP) comes in. An MSP is an external company that handles all processes and functionality related to a contingent labor workforce on behalf of a company. Simply put, it’s the best way to manage your contingent labor workforce.
How does an MSP function? What are the benefits, particularly during a labor shortage like the one we’re seeing right now? Let’s dive deeper into the ways an MSP can help your company overcome the labor shortage through the power of contingent workforce management.
How Does an MSP Function in Your Workplace?
An MSP operates as an external arm of your company—the job of the MSP is to manage the end-to-end lifecycle of your contingent workforce. From sourcing candidates all the way through invoicing and payment, the MSP is responsible for day-to-day management of the program. Tasks like requisition processing, supply chain management, analytics, reporting, and more will all be taken care of by the MSP, freeing up your organization and your core staff to focus on what matters: high-level business goals and company-wide objectives to help your organization grow and thrive.
Why Managed Services During a Labor Shortage?
One of the core goals of any MSP is to help companies remain agile in regard to their contingent workforce. Partnering with an MSP means you can scale up or down as necessary; add on contingent workers during particularly busy times and scale down to save money when you don’t need the extra help. This allows you to meet fluctuating market demands and industry conditions even when dealing with a labor shortage.
Another reason turning to an MSP during a labor shortage is a good idea is simple: They have access to the workers you need. MSPs work with large talent networks of freelancers, contractors, and temporary workers, all of whom have extensive experience in a variety of fields. When you need specialized talent that’s hard to find, an MSP can provide it. That lets your organization continue to meet production demands even when you don’t have the permanent workforce you may be accustomed to.
Managed Service Provider Benefits
There are multiple benefits to utilizing an MSP’s contingent labor staffing solutions to manage your contingent labor workforce, some of which we’ve already touched on. You’ll gain access to a wide talent pool during a time when finding qualified talent is more difficult than ever; your organization increases efficiency while meeting goals, ultimately saving time, money, and resources; you’ll become more agile and flexible by scaling your contingent workforce up or down as needed.
Other benefits of using an MSP to manage your contingent workforce include:
Access to Specialized Talent
As mentioned above, MSPs can source talent from a wide pool. Included in that pool is highly specialized talent with skills specific to the roles you need filled. Not only is this convenient, but it’s also cost-effective. Your organization will save resources, time, and money by reducing the need for lengthy training. To put it simply, you’ll be able to source specialized workers in a fraction of the time, and they’ll be able to get up to speed with your processes and workflows fast. That means your production stays on track even in the face of a talent shortage.
Contingent Workforce Management
One of the risks involved with engaging contingent labor is compliance. Misclassifying contractors, temporary laborers, and freelancers can be costly, and it’s something you want to avoid if at all possible. That’s another one of the great benefits of trusting an MSP to manage your contingent labor—an MSP mitigates the risk of worker misclassification and monitors the compliance landscape and labor regulations to ensure your workers are classified correctly. You’ll be able to focus on achieving business objectives, rather than worry about temporary or contract workers being aligned with labor regulation requirements.
Candidate Quality Enhancement
Did you know that in addition to sourcing highly specialized, experienced talent that you would have difficulty finding on your own, MSPs take proactive steps to make sure those candidates are the absolute best fit throughout the lifecycle of your contingent workforce needs? MSPs conduct a complete analysis of your company in order to source candidates who align with your values and mission. They also conduct performance reviews regularly to evaluate contingent workers’ on-the-job results and organizational fit. That means you aren’t just getting top talent—you’re partnering with a contingent workforce management solution service that is committed to your success in the long-term.
Managed Service Provider Software
Last but not least, a managed service provider partner program gives you access to a Vendor Management System (VMS) a system that uses a centralized database to keep track of and support sourcing, talent acquisition, management, payroll, and all other functions related to your contingent labor workforce. This software allows the MSP to track Key Performance Indicators (KPIs) to measure success, as well as spending habits to keep you on-budget. The software also allows for custom reporting so you can get insight into the entire contingent labor picture at your organization.
Process automation is another piece of the puzzle when it comes to technology and MSPs. Cloud-based or physical software applications help your business document and manage various processes, from onboarding and insurance to supply chain management and accounts payable. While not necessarily related to contingent labor directly—though it can be—automation is another way to cut your company’s manual labor requirements and save money and resources. And that’s critically important during a labor shortage.
Combat the Labor Shortage with an MSP Today
It’s impossible to predict what might happen in the coming years, or even months, when it comes to the volatile labor market. But one thing seems clear: The labor shortage we’re currently seeing isn’t going to be fixed overnight. And one of the best ways for your organization to combat the problem is by partnering with a top managed services company to manage your contingent workforce.
MSPs allow companies to remain agile, scaling up when the demand is there and scaling back to save money and resources when it isn’t, and source highly specialized talent at the same time. You’ll also mitigate the risk of worker misclassification, enjoy the benefits of candidate enhancement over time as the MSP conducts performance reviews and sources talent aligned with your values, and gain the advantage of vendor management system software to track KPIs, spending trends, and much more.
Are you interested in exploring managed service provider staffing solutions to solve your organization’s staffing needs? Turn to Anserteam, one of the top international MSP staffing service providers. Our MSP programs not only simplify and streamline your contingent workforce; we act as your partner throughout the end-to-end lifecycle of your contingent labor program. We recruit, vet, onboard, evaluate, and manage all contingent staff while monitoring compliance and handling risk mitigation at the same time.
Get in touch with a member of our team today to learn more about what we offer and how our services can help.