If you manage a contingent workforce across multiple sites or suppliers, you’ve likely seen the same challenges repeat:
- Inconsistent onboarding and compliance checks
- Variable supplier performance
- Limited visibility of spend and rates
- Slow time-to-fill for urgent roles
- Messy reporting and “multiple versions of the truth”
That’s where an MSP (Managed Service Provider) model can help.
Key takeaways
- An MSP is the operating model (people + process + governance) for managing contingent labour and suppliers.
- A VMS is software that can support the workflow, but it’s not the same thing as an MSP.
- Start with a small KPI set (fill, compliance, cost, supplier performance) you’ll actually use.
- MSP works best when procurement, HR, operations, and safety align on decision rights and measures.
What is an MSP (Managed Service Provider) in workforce solutions?
In workforce solutions, an MSP is a partner that manages all or part of your contingent workforce program (and often your supplier ecosystem) under a consistent operating model.
An MSP can support areas such as:
- Workforce request intake and approvals
- Supplier management and performance scorecards
- Standardised onboarding and compliance workflows
- Reporting, analytics, and governance
- Rate management and spend visibility
Programmed’s MSP and People Solutions: Learn more
MSP vs labour hire vs recruitment vs RPO (quick definitions)
Labour hire provider
Supplies workers to fill roles (often one of many suppliers in your ecosystem).
Choosing the right hiring model? See: Labour hire vs permanent recruitment
Recruitment partner
Helps you source and hire candidates (often focused on permanent roles).
RPO (Recruitment Process Outsourcing)
Manages recruitment processes for permanent hiring (and sometimes contractor hiring).
MSP (Managed Service Provider)
Manages the contingent workforce program and supplier ecosystem, with governance, reporting, and consistent processes.
What is a VMS, and how does it relate to an MSP?
VMS stands for Vendor Management System.
A VMS is software used to manage contingent workforce workflows, such as:
- Job requisitions and approvals
- Supplier submissions and shortlisting
- Onboarding steps and compliance documentation
- Time capture (in some models)
- Reporting and spend visibility
An MSP may implement and operate a VMS, but MSP is the operating model (people + process + governance). A VMS is one possible enabling platform.
How an MSP typically works (end-to-end)
While programs differ by industry and risk profile, a typical MSP model includes:
1) Discovery and program design
- Map current state: suppliers, volumes, role types, sites, compliance requirements.
- Define what “good” looks like: time-to-fill, safety, quality, cost controls, reporting.
2) Governance and operating model
- Define decision rights and approvals (HR/procurement/ops).
- Set rate cards (where appropriate) and role classifications.
- Define supplier tiers and performance expectations.
3) Implementation and transition
- Standardise job request intake and job descriptions.
- Implement workflows (with or without a VMS).
- Transition suppliers and roles to the new model with minimal disruption.
4) Steady-state operations
- Run the day-to-day program: intake, supplier coordination, mobilisation, compliance.
- Provide reporting and continuous improvement.
5) Optimisation
- Reduce bottlenecks (e.g. approvals, onboarding delays).
- Improve supplier performance through scorecards and feedback loops.
- Identify where a managed workforce model improves outcomes.
Related: Managed Skilled Workforce
When does an MSP make sense?
An MSP is often a strong fit if you have:
- Multiple suppliers across multiple sites
- Large contingent volumes or frequent mobilisations
- Complex compliance (tickets, medicals, WHS, site access, training)
- Limited visibility of spend and rates
- Inconsistent processes across business units
- Operational leaders spending too much time “chasing labour”
If your workforce is highly project-based, MSP can pair well with workforce planning:
MSP KPIs to track (practical list)
Time and fulfilment
- Time-to-fill (by role type and site)
- Fill rate (positions filled / positions requested)
- Submittal-to-interview and interview-to-start conversion
Compliance and risk
- Compliance pass rate (right-to-work, tickets, inductions, medicals)
- Incident rate / safety leading indicators (where measurable and appropriate)
- Onboarding cycle time (request approved to site-ready)
Quality and continuity
- Assignment completion rate
- Early attrition (e.g. first week / first month drop-off)
- Hiring manager satisfaction (short pulse surveys)
Cost and value
- Spend under management (total controlled spend)
- Rate compliance (to agreed rate cards / bands where applicable)
- Overtime and timekeeping exceptions (if in scope)
Supplier performance
- Supplier response time and submission quality
- Supplier scorecard ranking (quality, compliance, fill rate, retention)
Common MSP pitfalls (and how to avoid them)
1) Treating MSP as “procurement only”
Successful programs align procurement, HR, operations, and safety with shared measures.
2) Overcomplicating the intake process
If approvals are too slow, the business will bypass the process.
3) Not standardising role definitions
Inconsistent titles and requirements make reporting and rate management unreliable.
4) Measuring too many KPIs, then using none
Start with a small KPI set that the business will actually use in governance meetings.
Next step
If you want a clear view of contingent workforce performance, consistent compliance processes, and a scalable supplier model, an MSP program is worth exploring.
Learn more about Programmed’s MSP and People Solutions: MSP and People Solutions
General information only. This article provides general information and is not legal advice. Always consider your specific obligations and local requirements.
