Internal vs. External MSPs: Making the Right Choice for Your Contingent Workforce

Navigating the complex landscape of contingent workforce management can feel like trying to solve a Rubik's cube. With countless staffing models and strategies out there, it's easy to get overwhelmed. At Links Technology, we've spent over 25 years helping businesses unravel these complexities and find the right solutions for their unique needs.

In this blog post, we'll break down two core approaches to contingent workforce management: internal and external MSPs (Managed Service Providers). We'll weigh the pros and cons of each, providing you with the clarity you need to make an informed decision.

Internal MSPs: The DIY Approach

Think of an internal MSP as building your own custom-made staffing solution. You're in the driver's seat, overseeing every aspect of the process.

• Pros of Internal MSPs:some text
  • Total Control: You're the captain of the ship, with full authority over your contingent workforce program.
  • Potential Cost Savings: By cutting out the middleman, you may reduce costs associated with vendor fees.
  • Cultural Alignment: Your in-house team understands your company's DNA, ensuring a seamless integration of contingent workers into your culture. For more on building a collaborative team, check out our blog post on “The Right People for the Job: Building a Collaborative IT Team in a Regulated World”.
• Cons of Internal MSPs:some text
  • Heavy Lifting: Building and maintaining an internal MSP demands significant time, money, and resources. Think specialized personnel, robust technology, and ongoing infrastructure development.
  • Risk of Bias: Internal teams may be prone to unconscious bias during the hiring process, potentially impacting the diversity and quality of your talent pool. To combat unconscious bias and discover creative ways to expand your talent reach, explore our series on “Beyond LinkedIn: Creative Channels to Source Technical Talent”.
  • Scalability Struggles: Scaling up or down to meet fluctuating staffing needs can put a strain on your internal resources and processes.

External MSPs: The Strategic Partnership

An external MSP is like having a seasoned staffing expert in your corner. They bring their experience, technology, and vast network to handle the intricate details of your contingent workforce program.

• Pros of External MSPs:some text
  • Instant Access to Expertise: You tap into a team of staffing veterans who eat, sleep, and breathe contingent workforce management.
  • Vendor Neutrality: External MSPs have no vested interest in any particular staffing agency, so you get unbiased vendor selection and cost negotiations.
  • Seamless Scalability: They can effortlessly scale their services to accommodate your changing needs, whether you're ramping up for a major project or streamlining during a quieter period. For those considering contract workers as part of their workforce strategy, don't miss our guide on Full-Time vs. Contract in IT: A Hiring Manager's Guide to Making the Right Choice.
  • Predictable Costs: You get a clear picture of your staffing expenses upfront, making budgeting a breeze. If you're looking to optimize your staffing budget without compromising on quality, be sure to read our tips on “Combating the Rising Cost of Skilled Talent: Staffing Strategies for 2024 and Beyond” 
• Cons of External MSPs:some text
  • Shared Control: You'll collaborate with your MSP partner, but they'll be managing the day-to-day operations.
  • Cultural Disconnect: Finding an MSP that truly understands your company's values and work environment takes time and effort.
  • Provider Reliance: Your contingent workforce management is tied to the capabilities and performance of your chosen MSP.

Making the Decision: Factors to Consider

The best MSP model for your organization depends on a variety of factors:

• Size and Complexity: Larger, more complex organizations often benefit from the expertise and scalability of external MSPs. Smaller companies may find internal MSPs more manageable.
• Resources and Expertise: If you have a dedicated team with deep staffing knowledge, an internal MSP might be viable. Otherwise, an external partner can fill the gap.
• Risk Tolerance: Internal MSPs give you complete control, but also more responsibility. External MSPs share the load and reduce compliance risks. Navigating IT projects in regulated industries? Check out our post on “Compliance & Risk: Safeguarding IT Projects in Regulated Sectors”.
• Strategic Goals: Consider your long-term vision for contingent workforce management. Are you looking for cost savings, scalability, or a combination of benefits?

Your Questions, Answered

• What is MSP Cost? MSPs typically charge a percentage of your total contingent workforce spend or a fixed fee per placement. It's crucial to compare pricing models and ensure they align with your budget and staffing needs.
• What is an External MSP? An external MSP is a third-party company specializing in managing your contingent workforce, handling everything from sourcing and onboarding to payroll and compliance.
• What is the Difference Between an MSP and VMS? An MSP is a service provider, while a Vendor Management System (VMS) is a software platform used to manage the staffing process. MSPs often use a VMS as part of their service offering.

Ready to Simplify Your Contingent Workforce Management? Partner with Links Technology

Choosing the right MSP model is a strategic decision that can significantly impact your organization's efficiency and bottom line. At Links Technology, we've been guiding organizations through the complexities of tech staffing for over 25 years. We understand that every business is unique, and we take the time to understand your specific challenges and goals before recommending a solution.

Whether you're leaning towards an internal MSP, external partner, or hybrid approach, our team of experts can provide the insights and support you need to make the best decision for your business. We specialize in delivering stable, consistent, and high-quality placements that drive project success and minimize turnover.

Let's have a conversation about how Links Technology can empower your contingent workforce management strategy. Contact us today!