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MVP or MSP?: That is the Question

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By Derrick Ryskamp

Director, Enterprise Sales

A Master Vendor Program (MVP) and a Managed Services Program (MSP) are contingent workforce management programs with different approaches and objectives. An MVP focuses on consolidating your contingent workforce management through a single vendor, while an MSP aims to optimize workforce management across multiple vendors. The choice between these programs depends on your company’s specific needs, preferences, and the complexity of your contingent workforce requirements.

What is an MVP solution?

A Master Vendor Program is a contingent workforce management solution where a single vendor acts as the primary supplier of temporary staffing to a client organization. In this solution, the master vendor is responsible for coordinating and managing the supply of contingent workers—from sourcing and recruiting to onboarding, invoicing, compliance, performance management, and offboarding. The master vendor (or primary vendor) has preferred status and is given priority for sourcing and filling requisitions and will only bring in other suppliers when they can’t fill the position.

The MVP solution typically involves a contractual relationship between the client company and the master vendor, which outlines the program’s expectations, service levels, and pricing structure. The master vendor then works with a network of staffing suppliers to fulfill your temporary staffing needs. Some MVPs specialize in specific industries or job functions, while others have experience working across various sectors.

Benefits of using an MVP solution

MVPs offer several benefits to organizations that rely on contingent workers, including:

  • MVP owns recruitment with an 85-95% fill ratio
  • Enhanced responsiveness, quality submittals vs. quantity, and quickest to submit
  • Dedicated program and recruitment team with a single point of contact
  • Standardized and efficient processes with consistent onboarding and compliance metrics
  • Complete performance reporting with the Vendor Management System (VMS) tool
  • Economies-of-scale pricing to create significant cost savings

Related: The Benefits to a Master Vendor Solution

Who uses an MVP?

MVPs are typically used by large organizations that have a significant contingent workforce or temporary staffing needs. These organizations may include corporations, government agencies, healthcare facilities, and educational institutions. This solution suits organizations with many suppliers who want to simplify their management and reduce costs. This solution can often be utilized in conjunction with an MSP program. In addition, MVPs can be particularly useful for organizations with a demand for similarly skilled workers and those operating in multiple locations.

What is an MSP?

A Managed Services Program (MSP) is a type of business processing outsourcing (BPO) that helps organizations manage their contingent workforce or temporary workers. Contingent workers can include contractors, freelancers, temporary employees, and other types of non-permanent staff. An MSP is a model where a managed services program provider oversees the entire contingent workforce program, including multiple suppliers. The MSP acts as the primary point of contact between your organization and the suppliers, managing every aspect of the contingent workforce program, from sourcing and recruiting to contract management, invoicing, and reporting. This includes facilitating requisitions, interview coordination, oversight of hiring and onboarding, sending invoices, payment processing, and reporting and analytics. The MSP will effectively align the right combination of suppliers—with proven performance in job categories specific to your organization—to provide an assortment of high-quality candidates that compete for each of your contingent hiring needs.

The MSP solution typically involves a contractual relationship between the client company and the MSP provider, which outlines the responsibilities and obligations of both parties. While the specific terms and conditions may vary based on the agreement, commonly addressed aspects include the scope of services, service level agreements (SLAs) and key performance indicators (KPIs), and governance and dispute resolution.

Related: What is MSP? Managed Service Programs: Explained

Benefits of using a managed services program solution

MSPs offer several benefits to organizations that rely on contingent workers, including:

  • Multiple vetted diverse and uniquely skilled suppliers—with proven performance in job categories specific to your organization—all on a level playing field
  • A highly agile model that can be seamlessly scaled up or down to adjust to market demands
  • A program built to manage all labor categories across all locations while ensuring the highest candidate quality and most competitive rates
  • A suite of technology provides advanced workforce analytics and reporting and viability into spend
  • One contract and consolidated invoicing on one billing cycle
  • Greater visibility into costs across 16 categories resulting in 8-20% savings
  • Supplier-funded, ensuring no additional cost to your organization
  • Reduced contingent labor lifecycles and time-to-fill rates

Related: How MSPs Drive More Holistic Total Talent Acquisition Solutions

Who uses an MSP?

Medium to large-sized companies across various industries utilize MSP solutions. If your company oversees a sizable or diversified contingent workforce population, you can consider outsourcing the management of these workers to an MSP provider. An MSP will improve recruiting process efficiency and assist in building a more robust applicant pipeline for your business, bringing in a steady stream of top talent.

Which is suitable for your company?

There is no one-size-fits-all answer to whether an MVP, MSP, or both is the right choice for your organization. A workforce solutions provider can assess your organization’s specific needs, objectives, and available resources to gain insights and guidance tailored to your situation and assist in making an informed decision. Regardless of your talent acquisition challenges, Aleron can work with your team to craft workforce solutions that deliver exceptional results.

Contact us to learn more about MVP and MSP. You can also complete our MVP Quick Assessment to see if an MVP is right for your business.

This blog was written by Derrick Ryskamp.