Managing a contingent workforce effectively requires the right Managed Service Provider (MSP). To ensure your MSP is delivering value, it’s essential to evaluate their performance using key metrics.
Key Metrics for Evaluating MSP Performance
- Cost Savings
One of the primary benefits of using an MSP is cost reduction. Track metrics such as cost per hire, average contract rates and total spend under management. Evaluate whether the MSP is meeting agreed-upon cost-saving targets and delivering a return on investment. According to Staffing Industry Analysts, companies can save up to 20% on contingent workforce costs by utilizing an MSP .
- Time-to-Fill
Measure the average time it takes for the MSP to fill positions. A shorter time-to-fill indicates the MSP’s efficiency in sourcing and placing candidates. This metric is crucial for maintaining productivity and meeting project deadlines.
- Quality of Hire
Assess the quality of candidates placed by the MSP through performance reviews, retention rates and feedback from hiring managers. High-quality hires contribute to better project outcomes and reduce turnover.
- Compliance and Risk Management
Ensure the MSP adheres to compliance standards, including labor laws and industry regulations. Track compliance metrics such as audit results and the frequency of compliance issues. Effective risk management by the MSP reduces legal and financial risks for your company.
- Candidate and Hiring Manager Satisfaction
Gather feedback from both candidates and hiring managers to evaluate the MSP’s performance. High satisfaction levels indicate that the MSP is meeting the needs of both parties, leading to successful placements and positive working relationships.
- Supplier Diversity
If diversity is a priority for your organization, track the MSP’s efforts to engage diverse suppliers. Metrics such as the percentage of spend with diverse suppliers and the number of diverse suppliers used can provide insights into the MSP’s commitment to diversity.
Evaluating your MSP’s performance using these key metrics ensures that you are receiving the value and efficiency promised. By closely monitoring these metrics, you can make informed decisions and optimize your contingent workforce management strategy. For more insights and assistance with managing your contingent workforce, visit Suna Solutions.