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HCMWorks Insights

Managed Service Provider or In-House for Workforce Management?

Posted by HCM Works on 2 Mar 2021

When it comes to comparing the pros and cons of working with a managed service provider (MSP) or relying on an in-house program, there are numerous things to consider. First, it is important to keep in mind that there is no one-size-fits-all solution. Businesses are complex organizations with different priorities. To better understand the specific needs of your business, it is important to thoroughly review your internal processes. Alternatively, you can include a neutral subject matter expert as a third party to gain additional insights. To help you compare your options, we have listed some of the most common pros and cons of the two solutions.

In-House Program

DIY Implementation

When it comes to selecting and implementing a vendor management system (VMS) as part of your workforce management strategy, it is important to make sure that you have the right technical and project management expertise on your team. Poorly executed implementations can be costly and run significantly over budget. Following a successful implementation, your staff will require training and onboarding. Neglecting this step may cause employees to fall back into old habits and manual processes, which is why it is important to have a plan in place to ensure widespread adoption.


Managing a contingent workforce places an administrative burden on internal HR and procurement teams. Depending on roles and positions, different onboarding procedures may be required. For instance, regulated professions may require more exhaustive license and background checks, while other workers may need to adhere to specific safety protocols. Companies that operate internationally have additional layers of complexity and may need to adhere to more restrictive local policies. Without an appropriate system for tracking documentation, compliance can become challenging for internal HR departments, as they are still required to take care of permanent staff members.

Benefits of a Managed Service Provider


A (vendor neutral) MSP acts as a neutral intermediary between the internal and external stakeholders of a contingent workforce ecosystem. The MSP’s sole objective is to help their clients reach their short-term and long-term objectives. This is achieved through the successful design, implementation, and management of contingent workforce management strategies supported by VMS technology. The MSP ensures the VMS is configured correctly and develops the roadmap to maintain a strong program. Working with a vendor-neutral third party can help your business find the right solution by avoiding favoritism and bias.

Software Expertise

The right vendor management system (VMS) can help reduce the manual workload of HR and procurement by automating critical processes related to sourcing, acquisition, management, and payment of contingent workers. With an experienced MSP acting as project lead, the VMS implementation is more likely to be on-time and on-budget. Using the VMS knowledge, experience and overall expertise of the MSP substantially decreases the time it takes to configure and set up the solution according to client-specific needs.


The right VMS delivers enhanced visibility in contingent workforces, which allows for more strategic planning and optimization. This is accomplished through the solution’s capabilities to streamline and manage the contingent workforce supply chain. The right MSPs assist in Service Level Agreements (SLA) and Key Progress Indicators (KPI) to deliver efficient analysis and management of contingent workers from requisition to payment. MSPs additionally offer measurement of monthly SLAs and KPIs of industry leaders to facilitate optimization of both quality and efficiency.

Comparing In-House Programs and MSPs

Each business is unique, and the most efficient workforce management approach varies from industry to industry. While in-house programs offer flexibility and control over decision-making, the benefits are often outweighed by the need for project management expertise, development knowledge, and understanding of legislation. MSPs, on the other hand, can offer vendor-neutral advice tailored to specific client needs and provide new perspectives and solutions.

If you are looking for workforce management advice, or a managed service provider to manage your contingent workforce ecosystem, HCMWorks can help. HCMWorks delivers successful design, planning, implementation, risk mitigation and efficient management of contingent workforces. To find out more about how HCMWorks best suits your needs, contact our team of experts or learn more about who we are and how we help.

Tags: VMS, vendor management system, managed service provider

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