Why we came to be
Two senior professionals from a leading staffing and solutions firm learned through their business engagements that many of their clients were having difficulty managing their contingent workforce. With the staffing vendor market being so fragmented, many companies have working relationships with a large number of vendors. Each vendor having their own method of time collection and invoicing, varied billing cycles, and client management processes, client managers and administrators were spending excessive time in laborious administrative tasks which take them away from doing higher benefit functions. Most of these companies not having a centralized management structure for their contract workforce, things like enterprise reporting and business intelligence, enterprise economies of scale purchasing, and a comprehensive understanding of their co-employment risk were not easily accomplished if not completely impossible.
These two professionals knew from experience that vendor management programs or Managed Service Providers (MSP) for a client contingent workforce would have a lot of value to offer their clients. The upside benefits for an organization to have its contractor management processes such as time and expense collection, invoicing, on-boarding/off-boarding, bill rate consistency and overall vendor management completely centralized through a single point-of-contact seemed to have a lot of value.
The problem with the current market is that traditional vendor management programs have been developed from staffing organizations as a means of gaining market share by gaining full control of a client’s business. The issue and dilemma that arose from this is that the MSP’s who also recruit, or are owned by a company who has a recruiting business, are caught up in a conflict of interest. They are competing with the same sub-suppliers they manage, and client reduction in bill rates is counter-productive with the income they receive from their own contractors working at the client site. This situation typically creates a wall of distrust from other suppliers – increasing their resistance to the program and lowers overall performance, and the client’s management not being able to completely trust that they are getting the best candidates, and real willingness to aide in cost reduction measures.
What became very clear, is that to provide the upside value of an MSP without estranging a client’s vendor relationships and guarantee proper motive, staffing companies should not be managing other staffing companies. To develop a true partnership with vendors and clients, a new business model needed to be developed. This company would have to be comprised of staffing and solutions experts without being a staffing company, or ever allowing itself to be owned by a staffing company. Upon this premise, Managed Professional Services, Inc. (MPSI) was founded.
