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Sep 13, 2021

How to Become an MSP: Top 5 Tips for Recruitment Agencies

A Guide for Recruitment Agencies Looking to Become an MSP (Managed Service Provider)

 

 

As a recruitment agency moving into post-COVID/ Brexit territory it’s a critical time to be asking: what makes YOU so different from your competitors? With clients looking for maximum value on minimum spend, it’s more important than ever to establish yourself as essential NOT dispensable and, avoid losing out to the dreaded switch.

 

This means seriously considering whether you’re offering a service worth paying for, especially during these financially tough times. At present, adaptability is key: think about where your competitors are falling short and whether you’re being proactive in filling in the gaps.

 

Why become an MSP (Managed Service Provider)?

Expanding your recruitment agency to simultaneously become an MSP is an effective way to stand out in a climate of widespread budget cuts. The MSP market saw a 10% growth last year despite COVID, as reported by HR and recruitment consultants Randstad, meaning it’s an industry with rising demand and therefore: rising opportunity.

 

Taking that next step in order to become an MSP, is a chance to not only fill in gaps neglected by your competitors but infiltrate your client’s supply chain. This means nurturing business relationships end-to-end and thus securing trust AND longevity.

 

Our top 5 tips…

 

   1) Define your proposition

 

Start from the ground up; establish a base understanding of the industry you are entering as you become an MSP. Your primary starting point:

 

What does ‘Managed Service Provider’ mean?

To be a managed service provider means taking responsibility for an organisation’s contingent workforce program. An MSP’s responsibilities can vary depending on the exact nature of the client’s needs however can include:

      • Reporting & Tracking
      • Supplier Selection & Management
      • Order Distribution

(TAPFIN ManPowerGroup Solutions- Key Components in Managing a Global Contingent Workforce Program, p3)

 

With this in mind, you can now consider what becoming an MSP means for YOU in practice: What client pain points can you solve by offering a managed service?

 

A 'one size fits all’ approach won't do if you're looking to seriously compete: take the time to get inside your target client’s head by either drawing on your industry expertise or carrying out detailed prospect profiling. This will put you in a position to accurately address all your clients’ pain points and reach success with a tailored strategy and solution.

 

     2) Marketing and Sales

 

With your proposition defined, you can now think about how this will translate to prospects. Formulate a high-level presentation which can be condensed into an elevator pitch/slide deck where necessary. This should elevate and educate prospects on your mission and core values as an MSP.

 

Your marketing/sales material should include:

  • Your key USPs (Unique Selling Points)
  • Succinctly documented features AND their benefits (remember prospects are interested in WHAT you do, more than HOW you do it: aka outcomes over method)
  • Targeted language/terminology which speaks directly to your target clients

     3) Map out your delivery

 

Map out your delivery process, covering everything from onboarding to project completion; this should also encompass all concerned parties within the supply chain INCLUDING external suppliers. Whilst you should have a clear strategy in place remember the 'one size fits all' approach is a no go. Make sure your framework equips you with an effective standardised process, however, remains flexible enough to account for individual needs and changing circumstances.  

 

Your delivery process plan should include:

  • Onboarding
  • A clear communication strategy/ framework
  • Supply chain rationalisation methodology
  • Training programs for all parties
  • Account management (potentially on-site)
  • Validation processes for new/ replacement suppliers
  • Offboarding suppliers

Make sure all parties have their responsibilities clearly detailed for all project stages.  

Remember your process MUST also reflect your clients' ultimate needs and be presented in a way which will translate your intentions to them. This will instil confidence in them that their pain points are being met and keep the business relationship transparent.  

 

     4) Secure your legal framework with an MSP agreement

 

A contractual agreement between you, the MSP and your client is an essential next step to clearly define your mutual expectations and desired outcomes in binding legal terms.

 

What is a Managed Service Provider agreement?

A managed service provider agreement is a back-to-back legal contract between the MSP and client. This covers comprehensive terms for the whole supply chain with appropriate indemnities and warranties. At a minimum this must include:

      • Right to audit the supply chain
      • Reflection of vendors’ importance in meeting desired outcomes
      • IMPORTANT: Terms that reduce return to vendors supplying through the MSP will result in a disconnected and disengaged supply chain, causing the MSP to fail over time. This can take the form of spend leakage or legal/ reputational damage, overall jeopardising your most valuable asset: CLIENTS!

 

     5) Choosing the right VMS 

 

Choosing the right VMS to support your workflow is vital to enhance your competitive potential. If implemented correctly, it can fast track you to success by facilitating heightened efficiency and better results. Selecting a VMS however isn’t something to rush into or take lightly as the wrong choice can fragment your supply chain, ultimately harming your process instead of helping.

 

In order to attain a measurable ROI, it’s essential to carefully consider your requirements as an MSP against any potential software/system and carry out rigorous test runs before parting with your CAPEX.

 

A top priority should be keeping your supply chain connected for end-to-end transparency. This means it won't be just you logged on to your chosen system, but all parties under your management too- so make sure you consider its all-around accessibility. You should be able to convey its functionality with minimal training resources and ideally be up running within a few hours of installation.

 

Some key aspects to look for in an optimal VMS:

 

  • Hybrid/ Pilot capabilities for flexibility e.g., the ability to switch between master/ neutral vendor models for different role types (flexibility for client’s individual needs)
  • RPA (Robotic Process Automation) to reduce manual admin time and cost e.g., in Time & Attendance, Billing, Vacancy Management (delivering maximum value minimum spend)
  • DaaS (Data as a Service) support for real-time tracking of end-to-end costs and compliance

 

Become an MSP to expand your business relationships…as well as their profit-making potential!

 

Becoming an MSP is an ideal way to take your business relationships to the next level. As a recruitment agency, you'll have an established insight into your talent and client base, meaning you’re already in an optimal position to deliver a successful managed service. By taking the next steps to become an MSP, you can both prevent client losses to competitors as well as deepen existing business relationships. With a carefully thought-out strategy, the transition to MSP can be a simple as well as lucrative one, both expanding business arrangements- as well as the income they generate.

 

BOOK A DEMO to find out how ENGAGE’s end-to-end VMS can ease your transition to MSP and set you up for long-term success.

 

 

 

 

 

 

 

 

 
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