The managed service provider (MSP) market reached $226 billion in spend under management in 2024, marking a 2% return to growth after a challenging 2023. According to Staffing Industry Analysts’ latest MSP Global Landscape Summary, the industry is undergoing significant transformation driven by AI adoption, evolving work arrangements, and increasingly strategic client demands.

Here’s what the latest research reveals about where the MSP industry is heading.

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Market Snapshot: Growth Returns with New Dynamics

The global MSP market grew modestly in 2024, with the Americas region dominating at 56% market share. Most encouraging: 59% of new MSP contracts were with organizations adopting their first external MSP, showing strong mid-market momentum despite enterprise market maturity.

Three Major Trends Reshaping the MSP Landscape

1. SOW Spend Reaches Record Levels

Statement of Work arrangements now represent 39% of all MSP spend—up from just 18% in 2017. This shift reflects organizations moving from traditional “role versus experience” hiring to “task versus skills” approaches. For many MSPs, SOW growth has offset declines in temp and independent contractor spend.

2. AI Integration Accelerates Dramatically

AI adoption has exploded across MSP operations, from automated talent matching and rate benchmarking to predictive workforce planning. Key applications include:

• Generative AI for resume parsing, job descriptions, and enhanced chatbots
• Machine Learning for candidate matching and bias mitigation
• Agentic AI for autonomous task execution—the newest frontier

RFPs now routinely include questions about AI capabilities. However, with U.S. federal AI regulations more than doubling in 2024, compliance and transparency are critical considerations.

3.Vendor-Neutral Models Still Dominate

Despite investments in direct sourcing and contingent RPO, vendor-neutral approaches represent 55% of temp/contractor spend. This underscores a key reality: successful MSP programs still rely on well-managed staffing supplier ecosystems to deliver the scale and quality of talent clients need.

Related Content – What is MSP? Managed Service Programs: Explained

Technology and Delivery Evolution

Technology expands beyond VMS: While SAP Fieldglass (80%), Beeline (77%), and Workday VNDLY (47%) remain core platforms, MSPs are building broader ecosystems including talent pooling, direct sourcing tech, and skills assessment platforms. Notably, 21% of clients now procure technology separately, requiring MSPs to maintain platform flexibility.

Remote delivery becomes permanent: 72% of MSP delivery staff now work offsite (up from 55% in 2019), enabling global talent access and cost efficiency while maintaining service quality.

Market Composition

By client size: Enterprise organizations (10,000+ employees) drive 67% of spend, but 48% of clients are mid-market companies under 5,000 employees—highlighting where future growth will come from.

By industry: Technology/Telecom (22%), Finance/Insurance (20%), and Pharma/Biotech (11%) dominate overall spend. For SOW specifically, Pharma/Biotech leads at 28%.

By skills: Professional occupations represent 84% of spend, with IT remaining the top category at 34%.

The Strategic Imperative: Beyond Vendor Management

The data makes clear that transactional supplier management is no longer enough. Leading MSPs are repositioning as strategic advisors, offering:

• Strategic Workforce Planning for holistic, multi-channel talent approaches
• Advanced Analytics providing prescriptive and predictive insights
• Consultative Services on DE&I, ESG, and talent strategy
• Technology Leadership implementing AI while maintaining appropriate human oversight

Related Content – Managed Service Program (MSP) or Master Vendor Program (MVP) Infographic

What This Means for Your Organization

If you have an MSP: Ensure your provider invests in AI, expands SOW capabilities, and offers strategic advisory beyond transactions. Ask about their technology roadmap and approach to skills-based hiring.

If you are considering an MSP: Now is an ideal time. With 59% of new contracts going to first-time adopters, providers are experienced in onboarding new programs. Look for partners offering flexible pricing and scalability.

For all organizations: The future of work is increasingly contingent, project-based, and skills-focused. The right MSP partner helps you navigate complexity, access scarce talent, ensure compliance, and drive strategic value.