Four Secrets to Avoiding a Failed MSP Program

Guest Blogger
Four Secrets to Avoiding a Failed MSP Program

Often when a workforce solutions team partners with a new client and implements a Managed Services Provider (MSP) program, they shock the client by exposing major gaps in their processes and systems. It's not a conversation that is easy to have, but its' one that is vital to address for managing the client's contingent population. Having discrepancies in your contingent workforce (CW) program is not uncommon − because managing a contingent workforce is complicated. And many organizations do not have the right expertise to properly manage that program which can cause significant damage to an organization.

If your organization is considering implementing an MSP program, this blog will prepare you for what's to come so you don't enter the process blindly.


The First Step is Admitting You Have a Problem 

As your contingent workforce grows and expands, CW managers feel the pressure mount. Typically, the decision to hire an experienced MSP partner to take over your CW program is not because your team hasn’t tried, but it’s because the company realizes they are in over their heads.

Whenever talent partners are preparing to launch an MSP program, they start by pairing an implementation team with the key players within the client's organization to evaluate the client's current process of procuring and managing contingent workers, along with the reporting, tracking and systems used for these processes. The implementation team must gather the right data to create a streamlined MSP process configured to a client's needs. 


The Second Step is Recognizing There's More to the Problem Than You Think 

Even after you’ve identified what you thought was the problem, once you bring on an MSP, more hidden problems typically arise. 

It’s the job of the MSP to continually identify any current or future issues that you will encounter. Often not operating on all cylinders, an internally managed contingent workforce program generally needs a major change in order to operate efficiently.

Read on to uncover some of the top issues clients often face during the implementation process. Use these as discussion points to identify how much of a handle you have on your CW program before you begin to establish a relationship with an MSP Program.


1. Widespread Workforce Misclassification 

If contingent workers are on the company’s payroll, many times they are not classified correctly. This can lead to a myriad of issues, but MSP partners can help fix this. You need to be aware of all FLSA standards and ensure you are meeting all compliance guidelines. It's crucial to get ahead of these issues and solve them now before they get bigger.  


2. Misclassification of Employees as Independent Contractors

There are IRS guidelines and definitions for Independent Contractors (ICs). Are you following them? Did you know that if there was an audit, YOU would be on the hook for all of the taxes? Make sure your HR department is well educated on the IRS guidelines for your ICs, or better yet, an expert MSP provider can ensure everything is running smoothly for you.


3. 50/50 Partnership 

In order to set a program off on the right foot, there is a lot of preparation that you as the client need to do in order to make sure the transition is smooth and successful. Data collection, process review, reporting, and analyzation - it takes a lot of effort from both the MSP partner and your internal team. It’s an important step in the beginning, and once you work through it together with your talent partner, the MSP's operations team can hit the ground running.


4. Be Realistic

This might sound harsh, but there is a lot of complexity and work that goes into implementing an MSP program, and you need to understand that it's not a process that can be implemented overnight. As you can see from some of the examples mentioned above, sometimes the issues that you see in your program are just the tip of the iceberg.

You have to be prepared for that, and give your program enough time to launch. Working collaboratively to set attainable goals is important. Keep your expectations realistic, and listen to the experts that are spearheading the efforts.

There’s a way to quickly set up an MSP for your company, and then there is a way to do it right. Sometimes unexpected things may pop up while your MSP partner is getting the program on its feet, but coming from years of experience setting up these processes and timelines, DZConneX knows that a good implementation team's top priority is your organization's success.


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