A managed service provider (MSP) manages agreed activities within an employer’s contingent workforce program. A vendor management system (VMS) is the software used to record and support those activities, including staffing requests, supplier submissions, assignments and invoicing. Employers often use them together, with the MSP operating through the VMS.

For example, a manager may need three temporary analysts for a six-month assignment. The VMS can record the request and route it for approval. The MSP team can help clarify the requirement, coordinate suppliers and follow up when suitable candidates have not arrived.

The system holds the information and supports the process. The service team manages the work covered by its agreement with the employer.

What does an MSP manage?

In contingent workforce management, an MSP coordinates the activities involved in sourcing and managing external workers. Its responsibilities depend on the program, the locations covered and the services the employer has selected.

The team may support hiring managers, coordinate staffing suppliers, oversee onboarding activities and review program performance. AMS describes its MSP service as bringing recruitment and sourcing expertise together with an employer’s procurement and HR capabilities, supported by VMS technology.

A manager struggling to fill an assignment may need help understanding the available talent or explaining the requirement to suppliers. The MSP can investigate the issue and work with the relevant people to resolve it.

Here, MSP refers to contingent workforce services. The same abbreviation is also used for managed IT services, which cover a different business requirement.

What does a VMS do?

A vendor management system provides a shared place to manage information about external workers and their suppliers. Features vary, but commonly include staffing request distribution, worker records, billing and reporting. Some systems also support services purchased under a statement of work.

Depending on its configuration, a VMS can:

  • Route staffing requests to the appropriate approvers.
  • Distribute approved requirements to suppliers.
  • Record candidate submissions and assignment details.
  • Support time approvals and invoice processing.
  • Report on workforce numbers, spending and supplier activity.

The information becomes useful across departments. A hiring manager may need to check an assignment’s end date, while finance needs to understand the cost charged to a particular project.

How do an MSP and a VMS work together?

Consider a company bringing in temporary customer service staff for a busy period.

The hiring manager enters the requirement, including working hours, location, expected duration and budget. The VMS follows the configured approval process and makes the approved request available to the relevant suppliers.

The MSP team monitors progress. If suppliers are submitting candidates who cannot work the required shifts, it can check whether the availability requirements were clear and discuss the response with the manager.

Once candidates are selected, the system can track assignment information and required onboarding tasks. The MSP coordinates the activities within its scope and follows up on outstanding work.

If the assignment is extended, the updated dates and costs need approval and recording. Both the service team and the technology depend on timely information from the employer.

Can an employer use a VMS without an MSP?

Yes. An employer can run its contingent workforce program internally and use a VMS to support the work. Workforce platforms provide tools for program management teams to oversee external workers, spending and suppliers.

The employer still needs people to maintain the process, answer manager and supplier questions, investigate problems and review results.

An organization with an established internal team may have that capacity. Another may want an MSP to take on defined responsibilities or provide expertise across several markets. The decision concerns who will manage the program as well as which software will support it.

What should employers clarify when using both?

The employer, MSP and technology provider need a shared understanding of their responsibilities.

A system-access problem may belong with technical support. A delayed supplier response may need the MSP’s attention. A change to the budget may require an internal approval. Users need to know where to take each issue.

Reporting also needs clear ownership. A dashboard may show that assignments are taking longer to fill, but someone must examine the cause and agree on action.

AMS Managed Service Provider combines contingent workforce program support with technology, including VMS tools, to help employers coordinate sourcing, onboarding and workforce information.