The landscape of staffing is changing; can your organization keep up?

Work with a managed service provider to address resource demands

There’s no way around it; the landscape of staffing is changing. There isn’t one specific cause; many factors contribute to this shift, including stringent budgets, fluctuating market conditions, economic uncertainty, and talent shortages across many industries. When faced with these challenges, organizations are left in the lurch trying to staff their operations.

The value of the managed service provider (MSP) is well-established across both the commercial and public sectors. Organizations leverage MSPs to gain management, talent, and skills they’re lacking, typically at a lower cost. This arrangement gives organizations the ability to prioritize staff workloads and concentrate on priority initiatives. The operational management and oversight is then delegated to subject matter experts in contingent labor management.

While commonly utilized in technology departments, MSPs also provide a wide variety of professional services, including medical, clerical, and industrial roles. By providing these types of outsourcing services, specialized skills, and industry-specific insights, MSPs go beyond simply providing temporary staff—they act as strategic partners in an organization. In the face of fluctuating staffing needs, an MSP can address these resource demands in a more streamlined and efficient way.

Making the case for temporary staffing

Rapid digital transformation and the push to increase speed to market are creating a demand for more resources. However, talent shortages are leaving gaps that need to be addressed. As a result, C-suite leaders are increasingly relying on a contingent workforce to meet these demands. This strategic approach often includes partnering with managed service providers (MSPs) or staffing firms to provide outsourcing services and contingent workers.

Temporary staffing enables organizations to keep pace with technological advancements and market demands while addressing internal talent task prioritization and shortages. As organizations continue to navigate the complexities of digital transformation, temporary staffing provides the agility and expertise needed to thrive in a shifting landscape.

Leveraging temporary staffing through SOWs

While finding qualified talent presents an initial challenge, engaging that talent across the recruitment and hiring process presents another. Engagement strategies have evolved, presenting an enormous opportunity for the staffing industry. The typical model for temporary staffing, known as time and materials, involves paying an hourly rate for billable time.

However, there has been a notable shift toward statement of work (SOW) models, where the payment is instead determined by the completion of a predefined project scope. This is preferrable for many companies since the pay is more competitive and outcome-based. In fact, engaging an external workforce though a SOW has increased over the last decade, with the global market size estimated at $523 billion and expected to grow further by 2030.¹

Market growth for temporary staffing

While some industries are experiencing a decrease in growth, the staffing industry is on the up and up. The market size of the staffing and recruiting industry in the United States reached a record high in 2022.  A portion of this growth is the result of the increasing prevalence of outsourcing services that provide contingent workers and temporary staff. Nearly 2.5 million temporary and contract employees worked for America’s staffing companies during an average week in 2023, and over the course of that year, America’s staffing companies hired 12.7 million temporary and contract employees.³

While the demand for talent ebbs and flows, the need for qualified talent is increasing in many industries, and there aren’t enough “permanent” hires to cover the vacancies. Temporary staffing employees work in nearly every sector, with 24% in office/clerical and administrative roles, 11% in engineering, IT, and scientific roles, and 8% in healthcare.⁴

With its flexible and cost-effective solutions, temporary staffing is increasingly becoming a preferred choice for organizations seeking to optimize their workforce. By leveraging contingent workers, businesses can foster innovation, enhance operational agility, and drive growth, all while managing risk effectively. Considering this landscape, creating or refining a temporary labor management strategy becomes timely and crucial.

For organizations interested in leveraging a contingent workforce model, but aren’t sure where or how to get started, we’ve got a few pointers.

4 tips for incorporating managed service providers into your organization

1. Emphasize outcome-driven success: Create your model and performance evaluation criteria around desired outcomes. For instance, if the intended outcome is reduced support time, your partner should focus on automation, elimination of work, and modernization. Ensure your contracts are written with the outcomes in mind and that your partners' incentives are aligned to your goals. Recognize the need to embrace change—all organizations change over time.
2. Choose deliberate areas of focus: Be strategic when developing the scope and requirements for your program. Choose an MSP that best fits the scope of services, and whose culture and values match yours. For instance, when outsourcing services to provide temporary staff, it makes sense to assign those workers to a critical project, or to an area of the business that’s experiencing the most tension from not having enough people.
3. Define the scope and boundaries around responsibilities: Many MSP partners provide models for scope definition and evaluation criteria; that will help with this part of the process. To facilitate collaboration and a smooth working relationship between your organization and the MSP, make sure you clearly define tasks and expectations, identifying the tasks that your partner’s team will own. Positive collaboration, positive intent, and trust among your teams and the MSP are critical success factors.
4. Focus on strategic work: Let your MSP partner do more of the heavy lifting for standard operations, running the day-to-day oversight and delivery and enhancing your existing ecosystem. This allows your team the flexibility and time to focus on innovation, including new sources of revenue, improved customer experience, and reductions in operating expenses.

By focusing on specific business areas, defining projects and boundaries, and leaving room for goals to change as industry conditions evolve, MSPs can bring tremendous value to organizations.

How to choose a managed service provider that’s right for your organization

The landscape of staffing looks different than it did in previous years. With many feeling the strain of global market fluctuations and talent shortages, organizations are opting for outsourcing services that provide temporary staffing to fill their job openings.

In the face of a changing workforce and an emphasis on skills-based hiring, MSPs are adept at supplying the talent and resources needed. As economic uncertainty continues, organizations can feel confident placing their trust and staffing needs in the hands of dedicated service providers.

CAI has decades of experience providing permanent and provisional managed staffing solutions to clients across a range of industries. We have a dedicated track record of delivering top-tier talent for technical and non-technical roles in the commercial and public sectors.

To learn more about our staffing services and the work we do as an MSP, fill out the form below.