What are the different types of Managed Service Providers in recruitment?

Managed Service Providers (MSPs) have risen to prominence as a cost-effective and efficient way for businesses to manage their contingent recruitment processes. But with MSPs operating and recruiting in different ways, how can you work out what type of MSP is right for your business?

What is an MSP?

A recruitment Managed Service Provider acts as the manager of your contingent workforce recruitment. From attracting candidates to onboarding and making sure your business aligns with fast-moving compliance regulations, an MSP oversees many of a business’ contingent recruitment processes, helping free up resources and people for other important business tasks.

What are the benefits of partnering with an MSP?

MSPs are recruitment experts, and as a strategic partner, they offer a comprehensive contingent workforce solution. At every stage of a business’ recruitment process, not only will they use their knowledge and experience of hiring best practices to make sure they secure the right candidate(s), but they will serve as a one-stop shop for all your temporary staffing needs, from onboarding and compliance checks to invoice management and everything in between. And with many businesses under constant pressure to maximise their resources in a cost-efficient and streamlined way, this expertise can be invaluable.

In addition to this deep expertise, MSPs offer good value for money. MSPs can help businesses better manage the various costs associated with filling roles through upfront bulk pricing, greater cost predictability, and better negotiating better rates with preferred recruitment agencies.

But while all MSPs help businesses fill important jobs faster, different MSPs will do this differently. Below, we’ve outlined the key features and differences of some of the most common types of MSP so you can see which could better fit your needs.

What is a vendor-neutral MSP?

A vendor-neutral MSP operates by managing several different staffing agencies. These agencies must then submit candidates to be assessed fairly and neutrally, with only the best candidates moving forward in the recruiting process. The defining characteristic of this model is that the MSP does not submit its own candidates but rather assesses those submitted by a selected network of agency partners. The ‘assessment’ of candidate submissions can be carried out by the clients’ own hiring manager or can be automated using criteria pre-configured in a Vendor Management System. As a result, agencies have to compete with each other on the speed and price of their talent supply, helping businesses get the best choice of talent each agency can find.

What is a master vendor MSP?

A master vendor MSP is a business’ single supplier of temporary staff recruitment and management solutions. Typically, the master vendor is responsible for filling all a business’ roles, with its selected network of agency partners only becoming involved where the master vendor hasn’t been able to find suitable talent. This is a simple model, with only one contact and supplier involved from the beginning and one where there is lots of room for strengthening the quality and efficacy of talent supply as both the MSP and the business develop their relationship over time.

What is a hybrid MSP?

Hybrid MSPs combine elements of the vendor-neutral and master vendor MSP models. This approach allows businesses to tailor their recruitment approach to specific roles. For example, for high-volume roles, it may make more sense to work with a master vendor, whereas for other vacancies, a vendor-neutral MSP may be a better option.

How do I know which recruitment MSP is right for me?

Different businesses and sectors will require specific approaches to recruitment, so there’s no right or wrong answer when deciding which MSP is right for you. However, these models excel in different ways, potentially making one or the other better for your needs.

A good starting point is to work out how general or specific the roles you need an MSP to fill are. Where a role is likely to have higher turnover and is less conditional on specific skill sets, a master vendor is likely to be the better option due to its simplicity as your single source of workers. Where a role needs specific skills or would benefit from a more competitive talent pool, a vendor-neutral MSP would be a better option, thanks to its access to a broader network of recruitment agencies.

Another factor to bear in mind is the number of roles you will need to fill. If you’re looking for a business-wide MSP that can fill vacancies across teams and departments, a hybrid MSP may be the best option thanks to its flexible and tailored approach given there are few master vendor MSPs who can fill all occupation types.

Consider Blue Arrow's Managed Service Solutions

With Blue Arrow's managed service, employers can save on agency fees through automation-driven efficiencies and advanced management insights, which optimise staffing, skills, and resource deployment. The service offers unparalleled direct fill with an extensive and diverse community of temporary staff, ensuring a strong brand reputation for direct fulfilment. Additionally, employers benefit from scalability and flexibility through real-time staffing data and advanced visibility and control over their talent pipeline, supported by a national recruitment and talent solutions network.