The role of MSPs in organizational resilience

The impact of federal government spending cuts on staffing

Since January, CAI’s public sector clients and government agencies across the United States have made a variety of changes to address reductions in federal spending that have occurred in 2025. These priority shifts have resulted in large budget changes for many agencies, specifically in the realm of workforce management.

Some of the agencies CAI works with that are experiencing the effects of federal government spending reductions include:

Local townships, districts, and parishes
City and county governments
State departments of health and human services
State departments of insurance
State departments of revenue and labor
The Environmental Protection Agency (EPA)
The Centers for Disease Control and Prevention (CDC)

Utilizing a managed service provider (MSP) supported by the technology capabilities of a vendor management system (VMS) can help agencies navigate organizational workforce solutions and adapt to these mandates.

Six ways MSP and VMS help agencies recalibrate for funding realignment

In light of these changes, agencies will need to assess their staffing strategies, potentially increasing their reliance on MSP and VMS solutions to optimize workforce management under tightened budgetary conditions. Here are 6 ways these tools can help organizations and agencies recalibrate.

Tracking federal funding engagements

MSP and VMS solutions enable organizations to meticulously track federal funding engagements. By providing real-time insights and analytics, these solutions can help ensure intelligence and transparency of funding sources to support compliance, allowing organizations to align their operations with shifting regulations and funding priorities.

Achieving efficiencies

One of the key advantages of utilizing MSPs is the efficiency gained through streamlined processes. These systems automate various aspects of workforce management, from recruitment to invoicing, reducing administrative burdens and freeing up resources to focus on strategic initiatives. When grant funding for project initiatives is reduced, and an agency must consider alternative funding or potentially end engagements, the data and transparency captured under the MSP program can be a valuable tool.

Cost savings

Achieving efficiency directly translates to cost savings. By optimizing workflows and reducing redundancies, MSPs help organizations achieve significant cost savings . This is particularly crucial in times of financial uncertainty, where every dollar saved can contribute to organizational resilience.

Flexibility in staffing

MSPs offer dynamic, flexible staffing solutions that enable organizations to scale their workforce up or down quickly on an as-needed basis. This flexibility is invaluable when navigating changes in funding or operational directives, ensuring that organizations can adapt swiftly without compromising service delivery.

Flexibility to invoice quickly and pivot funding sources

The role of MSP solutions is to offer the agility needed to manage engagements efficiently, allowing organizations to cancel, modify, or reallocate resources as executive orders dictate. This flexibility ensures that organizations remain responsive to changes without incurring unnecessary costs.

Transparent bill rates and uniform job title classification

MSPs promote consistency and transparency through a uniform bill rate model coupled with consistent job title classification. This transparency enables organizations to track executive order impacts across job titles to predict contingent workforce management. It ensures that financial resources are allocated effectively, maximizing value while minimizing risk.

Enhancing agency resiliency: The critical role of MSP solutions

Recent spending cuts include reductions in various federal programs, which are likely to affect agencies that depend on federal funding. This could lead to budget constraints for agencies that heavily rely on contingent workforce solutions to maintain operational flexibility. For organizations who serve the public sector, the benefits of a strong MSP supported by the technological capabilities of a VMS to address shifting priorities and mandates are clear.

CAI has provided temporary or non-permanent contingent staffing management for commercial and public sector clients for over 20 years. Explore how we have helped match more than 900 public sector clients with their workforce management needs.

Navigating uncertainty: The role of MSPs in organizational resilience

The impact of federal government spending cuts on staffing