SESSION HIGHLIGHT
Mastering the MSP Model: Strategies to Sell, Partner, and Thrive in Staffing
Wednesday Oct. 8 | 11:45 A.M. - 12:30 P.M.
When managed service providers (MSPs) came onto the scene, most staffing companies hoped they would disappear quickly. Fast forward a couple of decades and MSPs have gained a stronghold while becoming the gold standard for many companies to manage their contingent labor program. We sat down with Kim Henderson, VMS/MSP expert and Director of Cobalt Compass Solutions, to talk about how staffing professionals can embrace MSPs and strategies to turn them from a headache to a strategic partner.
Navigating MSPs in the modern age
In our session at Staffing World, we’re going to be talking about how to sell to and navigate relationships with MSPs. As we all know, MSPs have come in and dominated every aspect of this industry. When I started out in 1999, 2000, we thought it would be a one-off thing and hoped they would go away. Instead, they have proliferated every part of business. Many staffing firms struggle with making money with MSPs, what to ask them, how to navigate the relationship, how to have a long-term mindset. I’ve worked in the MSP framework most of my career and I have had to figure out what to do. So, this session is sharing what I have learned from experience. And it’s not all doom and gloom! You just have to approach it correctly.
How MSPs have changed over time
When it first started, it was mostly massive Fortune 500 companies using MSPs. What I’ve seen happen over time, it’s the $15-20M spend businesses putting an MSP in place. It has absolutely expanded its reach. Another change I’ve noticed is industry. In the past, I never saw healthcare companies do the MSP model. In the last five to ten years, that has changed. It used to be solely huge companies, now it’s everyone across many industries.
MSPs in the near future
What I see happening in the future is that supplier lists are getting smaller and smaller. Before, you might have 50 suppliers, wasting incredible amounts of resources for the MSP managing those suppliers. It’s much better to sign on 10-15 strategic partners. Then, they have 10-15 to manage versus 50. It’s a more strategic, smaller group of suppliers. And that could be a good thing on the staffing side! Now you are competing with 10 other suppliers instead of 40. I also think MSPs are going to be looking for more cost efficiencies. ‘Show us your tech, how you are utilizing AI to find candidates’. They want to see how you are going to save them money and be strategic within rates constraints.
Positioning as a strategic partnership
Approaching an MSP is the same as you would approach any other customer – you have to prove you can add value, not just bodies. It helps to ask, where are they struggling? What do they have to deliver to their clients and where could they be doing a better job? Maybe they need help with regulation and compliance numbers. Is there a geography that’s hard to hit? Can you help in direct hire? What are you score carded on by your client? How do you manage your metrics? Look for multiple entry points, and be prepared for issues to change over time. Maybe they are fine now, but need IT help three months from now. Prove to them you can be better, faster, and reach different geographies.
Determine your strengths – and back it up
Look internally at your organization and determine what you do really well, and then you need to be able to package it up and present it to the MSP. Maybe you can stand out with tech or automation that you are using in your firm. AI tools are great, but you need to articulate what’s in it for the MSP. They need ROI to sign us. They are risk averse. They are driven by value and efficiency. Show them how you can fit into their program, and come prepared. Show results from other MSPs. Show them the impact. Showcase case studies to them, explain it. Lead with industry expertise. They’re going to want references, revenue percentage.
Common mistakes with MSPs
One area where people tend to fall down with MSPs, is they give up too soon. It can take six months, 9 months to land a customer. Nurture the relationship, show you value add along the way, help them out with problems. Consider asking them for a trial job to show what you are made of. Join associations that MSPs navigate in. Building a relationship with MSPs takes time – don’t give up too soon! Because when you are successful - beyond getting the account - once you are successful in one MSP, they open the door to other programs.
Best practices for approaching the MSP
Where people often get hung up is they contact the MSP, don’t get response, and give up. You have to approach them as you would any other client. It often takes a multi pronged approach. First prong, meeting the Program Director, finding pain points, understanding their program. Second, approaching the MSP at the corporate standpoint. Maybe they don’t need you in Florida, but they need you in Denver. The third tier is engaging client leadership, determining their issues with MSPs, get hiring managers to tell you their problems. IT helps if they are promoting you into the MSP with their stamp of approval. Fourth tier, building coaches and advocates within an MSP account, nurturing relationships with individuals.
Reframing MSPs
When it comes to MSPs, some staffing firms look at it as a 4 letter word when actually there are benefits. I would encourage you to reframe it as, how can this work for me? It can open you up to new service lines, like finance and accounting jobs if you were only in IT before. You are introduced to volume opportunities that would only otherwise be available by hunting and pecking on LinkedIn – and who has the time for that? MSPs can be a revenue generator for you if you approach it right.
Thank you Kim Henderson for sitting down with us! You can find her session at Staffing World on Wednesday Oct. 8 from 11:45 A.M. - 12:30 P.M.
About the Author:
Kim Henderson Director, Cobalt Compass Solutions
Kim Henderson leads Cobalt Compass, which provides training and consulting services for the staffing industry. Training programs encompass the full life cycle of sales and recruiting and teach the skills to create lasting customer relationships. Prior to starting Cobalt Compass, she had 28 years in the industry and served as a member of executive leadership for a global staffing firm. She has PMP and Six Sigma Lean certifications and contributes articles for Staffing Hub and HRM Outlook.
Kim has also appeared on several podcasts: Take the Stage, Staffing Hub, Staffing Monthly, Elite Recruiter, Digital Recruiter, CareerTALKS, Recruiters With No Limits, Fidelis Leadership, Staffing Playbook, Juggling Chainsaws, and Ivy Podcast. She has presented at the World Staffing Summit, Scale Funding, Staffing World, Crelate, MRI Network, IL, FL & WI Staffing Associations, and the Staffing Sales Summits.