The value of using a managed service providers (MSP) in recruitment

By Michael Franzmann, Category Manager

In 2024, Local Buy launched LGA Preferred Supplier Arrangement (PSA) LB336 - Recruitment: Managed Service Providers (MSP). This new Arrangement replaced the previous BUS259(A) - Recruitment: Vendor Neutral Managed Services (Temporary Staff), which expired after seven years.

This provided Local Buy with an opportunity to review the previous Arrangement, resulting in an expansion of the previous service category offerings and delivery regions. It also provides councils and other approved buyers with a choice of pre-approved suppliers of recruitment services for a contingent workforce via an MSP service. This Arrangement is now available to buyers across Queensland, Northern Territory and Tasmania.

Following an extensive tender process, four preferred suppliers have been appointed to this panel: Comensura Pty Limited, CXC Corporate Services Pty Ltd, Hays Specialist Recruitment (Australia) Pty Limited, and Kelly Outsourcing & Consulting Group Australia Ltd. Contact details for these suppliers can be found on the Local Buy lists on VendorPanel under Recruitment: Managed Service Providers LB336.

What is a Recruitment Managed Service Provider (MSP)? 

An MSP is a third-party business that manages temporary worker recruitment for an organisation and is responsible for the end-to-end management of its contingent workforce.

The services categories included under this LB336 Arrangement are:

• Neutral-Vendor Managed Service Provider (MSP) - The MSP is not a recruitment agency but partners with an agreed list of third-party recruitment suppliers to undertake the recruitment activities and put forward candidates for vacancies.
• Master-Vendor Managed Service Provider (MSP) - The MSP is a recruitment provider that usually undertakes the recruitment activities to recommend and place candidates for vacancies. This MSP may engage secondary recruitment suppliers for roles that cannot be filled by the primary supplier.
• Recruitment Process Outsourcing (RPO) - This process involves an organisation outsourcing all or part of its recruitment function to an external service provider. This service can cover permanent contract or contingent workforce requirements. There are three main RPO engagement types:
  1. On-Demand RPO - The supplier will recruit an agreed number of roles over a fixed period of time on behalf of the purchaser.
  2. Function-based or Project RPO - The supplier takes on part of the purchaser’s recruiting, e.g., for a specific project or initiative.
  3. Full or End-to-end RPO - The supplier takes over the entire recruitment process for the purchaser.
• Statement of Work (SoW) - A Statement of Work is a document that provides a description of the requirements of a specific project used to procure deliverables from a third party. It defines details of the work to be performed, project deliverables, timelines, work location and payment terms and conditions, documenting the working agreement between two parties: the purchaser and the contractor/service provider.
  
  There are three types of SoW services included in this Arrangement:

1. Design or Detail SoW: Defines the exact requirements of the project, telling the contractor/service provider how to do the work and what process to follow, including any specific industry-related regulations.
2. Level of Effort (time & materials) SoW: Details general work hours, specific time period and materials required to perform the service.
3. Performance-based SoW: Details the project’s purpose, resources to be provided and required deliverables, but does not specify how the work is to be performed.

Your MSP will assist in sourcing the workforce required for your specific SoW projects or tasks. 

What are the benefits of using an MSP provider for the recruitment of a contingent workforce? 

There are several benefits for buyers who engage an MSP for their contingent labour needs, including:  

• Streamlined recruitment processes
• Faster recruitment times
• Access to a diverse talent pool
• Single point of contact
• Workforce scalability to meet project needs
• Utilisation of software solutions that encompass the full end-to-end management of the contingent labour engagement process, including standardising pay rates, supplier margins, and costs to ensure a commercial benefit to clients
• Single invoicing
• A wide range of ‘real time’ management reports to support key decision-making processes
• Statistical analysis of real time and historical data
• Greater visibility and control of expenditure, compliance, and governance, resulting in improved efficiencies and risk mitigation
• Significant time and cost savings

If you are considering whether using an MSP would be beneficial for your organisation, please reach out to one of our preferred suppliers or your Local Buy Category Manager to discuss.

Supplier contact details are available via the VendorPanel system or from Local Buy Category Manager, Michael Franzmann.