What Is a Managed Service Provider in the Staffing Industry?

April 12, 2021

What Are Managed Service Providers?

A managed service provider (MSP) is a third-party business that manages your temporary worker recruitment and manages your contingent talent. Temporary staffing, like locum tenens providers, offers organizations the flexibility to manage their costs and staffing needs during uncertain times while still getting the best talent for the workforce.

Managed service providers offer a host of services, ranging from recruitment to management and analytics. Your organization can use all of the services or only the ones that fit your requirements.

A good MSP partner will provide a vendor-neutral approach to contingent workforce management. Managed service providers will work through a variety of agencies and leverage their best skills and expertise to provide a reliable, cost-effective supply chain of talent that meets company needs.

What Are the Benefits of Managed Service Providers in the Staffing Industry?

If you have in-house hiring managers, you may wonder why you need a workforce management solution for temporary workers. Your system may work relatively smoothly, but you should also ask yourself whether the quality of your contingent labor is worth the cost and resources you spend.

There are many benefits to working with an outsourced agency instead of relying on in-house talent acquisition, especially for short-term workforce solutions.

Greater Access to Talent

Vendor management systems have thousands of contract workers available, as well as plenty of information about their previous job experience and skills. Finding the right talent at the right time can be challenging, and working with staffing agencies means that you will get the person with the right skills for the job.

Instead of filtering through various job sites and going through the tedious process of vetting and validating potential workers, you can focus on hiring talent that fits your team and timeframe.

Improved Governance and Compliance

Many companies, such as healthcare organizations, rely on contingent workforces to achieve their organizational goals. However, as your company expands, you may find that one of the growing pains involves managing a large contingent workforce. Non-permanent employees are subject to different rules and regulations from permanent employees, and it's your organization's responsibility to manage those risks.

Some of the common mistakes companies make with contingent talent include:

  • Misclassification of worker role
  • Incorrect worker credentialing and verification
  • Incorrect reporting of incomes to the IRS
  • Mishandling of workers' compensation claims
  • Failing to understand co-employment rules and regulations

Working with contingent workers represents a compliance risk, especially if your recruitment department isn't familiar with the differences between independent contractors, contingent workers and permanent staff.

A managed services program decreases the potential risks of working with contingent talent. Any reputable staffing agency will implement compliance best practices to ensure visibility on worker certification and potential risk handling.

Most staffing agencies will work with you to review their current hiring processes and risk potential. A good staffing agency gives you a team of compliance experts responsible for managing risk and promoting best practices for workforce management.

Access to World-Class Technology

Staffing agencies often provide their clients with vendor management programs that help companies manage their contingent workforce. MSP programs greatly assist with flexible workforce planning by improving recruitment and giving insight into worker wages, locations and other vital details.

These insights can help organizations improve their contingent workforce cost savings while also ensuring that they're hiring the right people for the job.

Your Vendor Management System Scales with You

The MSP model relies on understanding your company and your particular needs. Every business is different and will require varying talent solutions. For example, if your organization depends on a seasonal contingent workforce, it's vital to work with a staffing agency that can scale with that need. A managed service provider will often utilize their specialist contacts in the staffing industry to get the right talent, no matter how large, within a reasonable time frame.

The benefit of this scalability is that your organization can reduce overpay for unneeded talent. Instead, your MSP provider will identify your staffing needs and provide the tailored workforce that you need at a given time.

Improved Visibility and Cost Controls

Most vendor-neutral managed service providers work with several different suppliers in the industry. This mix of suppliers ensures that the MSP has the company's best interests in mind without being pushed toward a particular supplier. Instead, the MSP provider can use its resources to find the best talent while remaining cost-effective.

Many clients, including healthcare organizations, face stringent hiring decisions during uncertain times, and an MSP that can provide a contingent workforce while still cutting costs is a great benefit to any organization.

How Does Contingent Workforce Staffing Work?

A managed service provider will often assign client managers to companies. These managers will work with the facility to provide comprehensive workforce planning, identifying potential problems and solutions.

The MSP provider will comprehensively manage aspects of the contingent workforce, from determining the needed size to recruitment and payroll management. The managed service provider connects staffing vendors and the business, and its contingent workforce management team. The managed service provider will liaise with clients regularly to ensure that company needs are met.

Every client is different, and part of the service is adapting to that need. For example, some organizations, such as hospitals, need skilled and experienced staff, while others require a large volume of unskilled labor. The service provider will work with suppliers to find and interview potential talent while also following up with the client’s HR department.


Working with a managed staffing service provides a wide assortment of benefits to companies of any size. These suppliers reduce the cost of recruiting and managing a contingent workforce while also ensuring compliance with local and global workforce regulations.

Health Carousel is an MSP focused on the healthcare industry. We specialize in providing our clients with the specialist service they need. Our staffing team works with you to ensure comprehensive management of every aspect of contingent talent management.

The healthcare industry faces a chronic shortage of skilled staff, and many companies are turning towards temporary staffing solutions to fill in the gaps. However, healthcare also has some of the strictest rules about certification and employee vetting, and the consequences of non-compliance can be devastating.

Our team is responsible for every aspect of the recruitment process, from acquiring talent to negotiating competitive prices to keep costs low. If you're struggling to find the right staff for a particular position, get in touch with us today. You'll quickly see how the benefits of working with a managed service provider can improve your facility’s 's productivity, increase revenue and maintain employee well-being.

About Health Carousel

Health Carousel is committed to partnering with world-class healthcare facilities across the country, providing rewarding assignments for Registered Nurses and Allied Health Professionals, and attracting the best internal talent at all career levels.