Using a PSL to deal with temporary staffing needs works for many businesses, and has done for many years. But just because something works, doesn’t mean there isn’t a better alternative out there — it doesn’t have to be a case of ‘well it’s just what we’ve always done’.
PSLs serve a purpose, but…they require heavy manual admin, don’t necessarily protect businesses from compliance risks (and associated fines), and offer limited visibility of outgoing costs — making it harder to budget effectively.
However, a more-than-viable alternative lies in Managed Service Providers (MSPs). They address all of the pain points outlined above by centralising agency management, vastly improving compliance processes (and so reducing risk), and providing a much clearer view of associated costs.
Ultimately, the right MSP for your business will save you both time and money.
But how do you know when it’s time to switch from your tried and tested PSL to an MSP? And what tangible gains will you make, as a business?
In this post, we’ll compare both systems and why and when to make the switch from one to the other?
PSL model: it works, but presents problems…
Fragmented supplier management
Relying on a PSL for your temporary staffing needs means dealing with multiple suppliers at any one time — each of them with their own contracts, processes, rates, and performance metrics.
This can become a bit of an issue, particularly if your business is growing at pace, with information stored in different places on different systems, rather than all in one place.
It can also be a huge time drain — especially when you consider that UK companies deal with an average of 156 indirect suppliers.
Exposure to compliance risks
With the rules and regulations over issues such as health and safety constantly changing, it becomes much harder to keep track of them (and ensure you’re sticking to them) if using a manual PSL — not least because each of your suppliers will have their own approach to compliance.
This potentially puts your business at risk of costly errors or oversights, leading to big fines and possible reputational damage.
An unclear financial picture
With a PSL, although you can pick and choose your suppliers from a wide list, each of them is likely to set their own rates, which makes it much harder, overall, to track staffing expenses.
And without a clear overview of what you’re spending where, it’s much harder to spot areas where you could make significant savings and stay on budget.
In fact, 59% of professional services organisations say they find resource forecasting very challenging, and this certainly isn’t helped by not quite knowing how much you’re spending and who with.
MSPs: Saving you both time and money
In contrast to the points raised above, Managed Service Providers (MSPs) address the challenges of the PSL model by centralising staffing processes and offering businesses greater control over costs, compliance, and supplier performance.
Centralisation of all info
One of the major advantages of MSPs is the centralisation of staff management. Rather than working with multiple suppliers, MSPs bring all staffing services under one roof — with a single provider. This means one point of contact for all supplier relationships, leading to fewer administrative touchpoints, better rates, a clearer picture of performance, lesser chance of errors or discrepancies, and more streamlined communication all round.
It makes sense then that organisations using MSPs to centralise and automate repetitive admin tasks — such as vendor management, invoicing, and compliance — report savings between 25% and 45% across staffing and related processes.
Greater compliance – less risk
Instead of relying on each agency to manage compliance individually, MSPs handle all compliance processes across your entire supplier network, ensuring that all of them meet the same regulatory standards.
This centralised, automated approach greatly reduces the risk of errors and ensures your business is always up to speed with ever-changing regulations.
Yes, it saves time. But perhaps more importantly, it also helps you to avoid hefty fines or penalties for non-compliance.
Financial visibility — a much clearer picture
One more, particularly important, advantage of MSPs is that they offer standardised rate cards across all suppliers, and centralised procurement — the pleasant side-effect of this being far greater transparency when it comes to staffing costs.
Rather than dealing with variable pricing from multiple agencies, MSPs allow you to track spend and identify genuine opportunities to make savings, sticking to your allocated workforce budgets.
Ultimately this allows you to make better financial decisions as an organisation, and avoid overspending.
In simple terms, the use of the right MSP can result in savings of up to 30% on total staffing costs.
How to know when it’s time to switch to an MSP
Shifting from a PSL to MSP is not a decision to be taken lightly or quickly, but several signs will suggest when the change is necessary. Here are some key indicators:
- Increased complexity: If managing multiple suppliers has become time-consuming and costly, centralising staffing under an MSP can streamline recruitment process and reduce admin costs.
- Compliance concerns: If your business is struggling to maintain consistent compliance across a fragmented supplier network, an MSP can ensure all legal requirements are met, and that you don’t fall foul of the relevant regulatory bodies.
- Spiralling costs: If your staffing costs are unpredictable or out of control, due to inconsistent pricing, MSPs can provide the visibility and transparency needed to stay on budget and make real savings.
- The need to scale…fast: As businesses grow or face fluctuating staffing demands, MSPs offer the flexibility to scale staffing levels quickly without the need for renegotiating terms with multiple suppliers.
The ultimate benefits of an MSP Model
The PSL model, though once effective, no longer meets the demands of most modern businesses that require smooth-running operations, less time spent on manual admin, better performance management, full compliance, greater transparency and much tighter cost control.
Managed Service Providers (MSPs) offer a centralised solution that addresses all of these needs by streamlining processes (even automating many of them), improving compliance, and providing greater financial visibility.
For businesses facing fragmented supplier management, MSPs offer a clear solution to save both time and money.
If the PSL model is no longer delivering the control, savings, and stability you need, it may be time to explore what an MSP can do for you.
