5 Ways to Control Costs in Your Program

Guest Blogger
5 Ways to Control Costs in Your Program

Cutting costs in your contingent workforce spend year over year is one of the top reasons an organization will engage an MSP. But the reality is that cost savings cannot continue to be as sharp as they are during the first integration going forward while also remaining competitive in attracting quality talent. Especially if that means going below the average market rate. But there is still so much value to be had from an MSP when it comes to controlling costs year over year, particularly when there are increased talent shortages like we’ve seen post-COVID. By partnering with an MSP, your provider will be able to use their expertise to get the best talent at the best rates, without creating significant cost reductions to your overall spend.

When it comes to evaluating costs within your program, there are so many aspects to consider – Talent needs to be paid a competitive wage to avoid turnover or worker burnout, suppliers are actively seeking engagements where they aren’t paid the lowest compared to other suppliers and still need to make money to stay in business while the program team works tirelessly to make sure both of these things are true at the same time. Controlling costs simply means “not unexpectedly exceeding your talent budget”… which many companies did in the last few years. There are ways to do that without squeezing suppliers or candidates while still effectively engaging all of the talent required regardless of the source or category, including with the five methods below.

Direct Sourcing

Direct Sourcing is quickly becoming a solution that an MSP can deliver that is able to amplify savings without impacting the quality of talent. For roles that are considered high-volume hires (the same skills needed repeatedly), there can be increased quantity of scale for programs that are willing to outsource the sourcing of a talent pool specifically for that category of work. By choosing one provider, and delegating a specific category of work to direct sourcing, there can be opportunities to control costs. Because direct sourcing uses automation where as traditional staffing uses people, the provider is sometimes able to offer better markups than traditional staff augmentation since it requires less of a lift. Additionally, since that talent is sourced to your employer brand, it is less expensive to re-engage them in the long-run, and avoid costly turnover.

Contingent RPO

Contingent RPO is another great way to manage the growing costs of your contingent workforce without sacrificing talent. It’s another solution that is great for categories of work that require high-volumes of talent with similar skillsets, contingent RPO is growing in popularity within MSP programs. And this isn’t just because they can keep costs flat, it’s also because they can leverage the benefits of regular RPO including utilizing your employer brand to keep the unseen costs of contingent workers, such as turnover, lower. And when a supplier is dedicated to creating a pool of talent specifically for you, and doesn’t have to compete with other suppliers in your program, there is incentive for more competitive rates.


Payroll as part of your MSP solution may not be something that gets much attention, or even a second glance, as long as it’s running on auto behind the scenes. But payroll is another great solution to consider consolidating in order to control costs because rising costs for talent can be offset by aligning your payroll provider to your MSP instead of multiple suppliers. Many will offer a solution that doesn’t include an MSP fee, so instead of costs increasing as a result of talent becoming more expensive, your MSP may be able to create a payroll solution that can offset some of those expenses specifically.

Total Talent Strategies

Total Talent Strategies including sourcing talent from all categories of work at a company, this includes FTE and upskilling which could be considered the highest level strategy to controlling costs in your MSP. The talent you already have access to, from any category of work, is like a private talent pool for any opening. Plus, a sourcing strategy that includes looking to your current employees is a low-cost way of aligning the skills of your workers to the shortages you might find in the industry if you went to an outside agency. Considering your own total workforce as a source for your next hire is one of the most cost effective ways to fill open roles, and an MSP can assist in creating a process to make that a reality.

Advisory Services

If you’ve been in an MSP for a long time, or at least have been in MSP since pre-COVID, you may need to reconsider the goal of your MSP as it compares to why you outsourced your program to begin with. The worker landscape is completely different now than it was just 18 months ago and so your MSP budget should be too. But how do you know if your rate card or supplier right-sizing is still effective and not hurting the performance of your program or driving up your costs? Advisory Services are a way to let an MSP take a fresh perspective on your existing program without going to bid or making a huge play in the market to see what’s offered while still driving recommendations for efficiencies, rates, worker categories and whether it would make fiscal sense to implement any of the other solutions we reviewed above. Advisory services can determine how realistic the budget set is against the year-over-year changes in the talent marketplace.

All of the examples above are ways that your organization can control costs for your program without cutting out anything important or without paying a low cost to suppliers. It’s important to remember that every program is different, so what works best for you might be different than what works for others. The right MSP can help you set expectations with your suppliers and stakeholders on the value of cost control in this current challenging market.

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