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How MSPs Drive More Holistic Total Talent Acquisition Solutions

As the world of work continues to evolve, employers face new challenges in sourcing, attracting, and retaining top talent. To remain competitive, businesses must take a more holistic approach to talent acquisition that considers your traditional and nontraditional workers, breaks down existing silos, and better serves the entire organization. 

In this blog, we share some of the ways that an experienced managed service provider (MSP) can support these objectives. 

Data-Driven Workforce Planning 

In a Gartner survey, just 33 percent of business leaders said their organization’s HR function is effective at using data in workforce planning. By providing clearer visibility into the data behind your contingent workforce, an MSP can help drive a more strategic approach to workforce planning across your organization. In addition to sharing important metrics like time-to-submit, time-to-hire, and cost savings over time, your MSP partner can identify market trends and benchmark data that may impact how, when, and where you hire. 

Compliance and Risk Mitigation 

Another way your entire organization can benefit from an MSP is through increased compliance and risk mitigation. MSPs can provide independent contractor compliance (ICC) and payrolling/employer of record services that protect your business from financial and co-employment risks. 

Unlike direct employees, independent contractors are in business for themselves, offer services to the public, carry insurance, have a physical location where equipment or tools are kept, pay their own expenses, and set their own schedules. They work free from supervision, direction, and control from the company utilizing them. 

Misclassifying a worker as an independent contractor when they should be classified as a business can have significant financial consequences. 

  • The IRS and state unemployment agencies may require your company to pay back taxes and penalties at the state and federal levels for failing to withhold and pay employment taxes. 
  • Your organization may be required to pay back wages, overtime, and benefits for the misclassified worker. 
  • In California, businesses can be penalized up to $15,000 per violation for misclassifying workers as independent contractors. If the misclassification was willful, the penalty could go as high as $25,000 per violation. 

These fines can add up quickly, especially for businesses that have misclassified multiple workers. MSPs have clear processes in place to properly classify your workers in accordance with IRS standards to prevent these costly issues from arising. 

As experts in employment regulations, your managed service provider will also stay up-to-date and keep you informed of any policy changes that may impact hiring processes and workforce management. 

Related: Employment Law Updates to Know in 2024 

Integrating with Other Workforce Solutions 

For a truly holistic approach to talent management, organizations are leveraging other workforce strategies and solutions, such as master vendor programs (MVPs) and direct sourcing, within their MSPs. 

Integrating a master vendor program into your MSP can provide numerous benefits, including streamlined procurement, a simplified supplier environment, and better technology. By utilizing an MVP inside an MSP, you’ll have access to a dedicated, onsite program and recruitment teams with a single point of contact, leading to localized subject matter experts, improved fill ratios, and decreased time-to-fill.

Under this model, the MVP owns recruitment at defined locations. The MSP can also utilize sub-vendors when hiring ramps up or for roles that the MVP is unable to support. Unlike a traditional contingent workforce model within an MSP, where multiple agencies are competing to fill the same positions in identical markets, this blended solution also allows for greater efficiencies, more onsite support, and more opportunities to save costs. 

Direct sourcing, which leverages technology to improve talent pipelining and create curate pools of qualified candidates, is becoming increasingly prevalent in MSPs. Direct sourcing reduces time-consuming elements of the recruiting process, such as sourcing and pre-matching, while ensuring sourced candidates are qualified and able to engage in work assignments quickly. When direct sourcing is incorporated in an MSP, these talent-related functions can be carried out by the MSP provider without having to engage secondary staffing suppliers. 

Related: What Is Direct Sourcing? 


A successful talent acquisition strategy requires a holistic approach that considers your short- and long-term needs and allows your company leaders to see the value of your contingent workforce program. 

MSPs provide valuable support in these areas, assisting companies in attracting and retaining top talent in today’s competitive market while reducing time-to-hire, improving candidate quality, and ultimately, driving business results. By working together, your company and managed service provider can create a talent acquisition strategy that drives business success for years. 

This blog was authored by Joseph O’Shea.