The stakes for getting the talent supply chain right have never been higher. The rise of hybrid work, globalisation, AI-driven automation, and the demand for specialised skills have made workforce planning more complex and critical.
Moreover, contingent workers now comprise up to 40% of the total workforce in some industries. That means the systems used to manage contingent workers can no longer be treated as secondary to permanent hires. Organisations that fail to modernise their approach risk falling behind in the race for talent, both in terms of access and agility.
The talent supply chain is not just an operational concern – it’s a strategic enabler of business growth, innovation, and resilience. And if it’s broken, the entire business feels the impact.
Understanding the talent supply chain
The contingent workforce is a critical part of the talent supply chain for many organisations. Contingent workers enable organisations to upskill at pace, meet the evolving demands of clients with flexible recruitment solutions, and manage hiring costs in an uncertain, changing market.
However, the pace at which the contingent workforce moves in and out of the business often means that the contingent talent supply chain is difficult to track, manage and maintain. Organisations can find it challenging to know where their workers are sourced from, what rates of pay they receive, whether they are compliant with local employment regulations and whether they have been classified correctly.
Misclassification of contingent workers can lead to significant fines and reputational damage for employers – and as legislation changes, employers bear the responsibility.
How do you know if your talent supply chain is vulnerable?
The pace at which hiring moves in many large organisations means that vulnerability, risks or lack of transparency in the talent supply chain are often overlooked. There are, however, a number of tell-tale signs that your supply chain may not be procuring the talent you need as quickly, efficiently, cost-effectively and compliantly as it should be.
Long time-to-fill roles
The benefit of utilising contingent workers is that gaps in resource can be filled quickly. If time-to-hire is slow, and the permanent workforce is being over-stretched, it could be because of inefficiency in the talent supply chain.
Rising costs and unmanaged suppliers
Often, organisations will paper over the cracks in their talent supply chain by overspending. The supply chain may move more quickly – but costs can spiral quickly for organisations and become unsustainable.
Poor visibility into workforce spend
Without a single process or platform in place to manage their contingent workforce, organisations often find it difficult to track the true extent of their spending on contractors, freelancers and temporary workers. If you do not know what your annual spend is, how do you know it is the right resourcing strategy for the business?
Inconsistent quality of hires
When contingent talent is sourced from many different suppliers operating with different stakeholders and without clear guardrails, candidate quality can be inconsistent.
Compliance risks with contingent labour
It is vital that your contingent workforce has appropriate contractual documentation, clear expectations on their role and the required deliverables. All while being classified correctly for tax purposes. Not doing so can result in fines – as well as causing unnecessary financial problems for the workers themselves.
Low hiring manager satisfaction
Often, when resourcing problems need to be solved quickly, the burden of responsibility falls onto the hiring manager.
The problem of accountability
Many organisations spread the accountability for their contingent workforce around a number of business areas. Procurement will often take responsibility for negotiating contracts with agencies and suppliers, as well as tracking the budget and spend. HR may be tasked with sourcing talent or tracking the quality of candidates. Hiring Managers and Recruiters share the burden of managing agency relationships, reviewing job descriptions and identifying where a contract worker may be the best resourcing solution.
With different areas of responsibility, it is easy for the overall contingent workforce solution to become fragmented and for different workstreams to become siloed. This only reinforces the probability of inefficiencies creeping in, unregulated spending creeping up and a lack of transparency and visibility.
With the complexity and pace of change within the contingent workforce, organisations need a more holistic, integrated, and agile approach. That’s where a Managed Service Provider comes in.
The role of a Managed Service Provider
A Managed Service Provider is an external partner that assumes responsibility for managing an organisation’s Contingent Workforce Program. An MSP serves as a centralised hub, coordinating suppliers, ensuring compliance, streamlining processes, and optimising costs. This is often supported by Vendor Management System (VMS) technology. MSPs can manage various types of non-permanent talent, including:
- Temporary staff (through staffing agencies)
- Independent contractors and freelancers
- Statement of Work (SOW)-based engagements
- Payroll services and direct sourcing initiatives
Appointing an MSP can give an organisation:
A centralised strategy for managing their contingent workforce
Your MSP will build you a bespoke Contingent Workforce Program to match your needs.
Enhanced visibility over spending, rates of pay and invoicing
A single process for sourcing and onboarding talent ensures greater visibility and transparency.
Reassurance around compliance and risk mitigation
An MSP will ensure that all your workers are compliant with global and local employment legislation.
Scalability and flexibility
Your Contingent Workforce Program will enable you to scale quickly when required, without overloading hiring managers and recruiters.
Effective supplier management
All suppliers are audited and work within a scoped agreement, creating consistency in rates of pay, fees and quality of candidates.
Direct access to talent
Your MSP can act as a first-tier supplier, providing you with an additional route to talent where you may need specialist expertise or dedicated recruitment resource.
When should you consider an MSP?
An MSP isn’t just for large corporations. Organisations of all sizes are embracing MSP solutions to bring structure and strategy to their talent operations. Here are some signs it might be time to consider an MSP:
- You’re spending more on contingent labour but lack visibility into ROI.
- Hiring managers complain about slow processes or low-quality candidates.
- You’re struggling with compliance or have faced regulatory fines.
- You work with too many vendors and lack a unified procurement strategy.
- Your HR or procurement teams feel overwhelmed managing workforce suppliers.
Conclusion
If your talent supply chain is showing signs of strain, it’s time to reassess your approach. A Managed Service Provider offers more than just operational support – they bring strategy, technology, and expertise to help you rebuild your workforce engine from the ground up.
In an era where talent is both the greatest risk and greatest asset, you can’t afford to let inefficiencies go unchecked. An MSP might just be the missing link that turns your broken talent supply chain into a source of strength, agility, and sustained business success.
