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MSP, VMS, FMS – CXC Underpinning the Contingent Worker Ecosystem

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Where does CXC fit among the VMS / FMS and Global MSP Community.

With the so called 50 by 20 fast approaching (Percentage of Workforce as Contractors/Freelancers- Contingent Workers by 2020- as referenced in Ardent Partners whitepaper , how Companies attract, source, procure, manage and pay Contingent Talent has become ever more important as the workforce mix changes.

The FMS, VMS and MSP providers all have significant and critical parts to play within this life cycle. Traditionally, the hiring of Contingent Workers has been outsourced to third party staffing companies, consultancies and MSP’s. However, companies now wish to have more control of this process as the workforce mix changes, compliance burdens increase and the demand for niche and specialist talent increases.  End user companies are increasingly relying on the FMS, VMS and MSP providers to attract, source, manage costs, pay and manage Contingent Workers/Talent. Indeed, this sector seems to offer significant opportunities for these providers to consolidate or bundle their services, offering a one stop shop to their customers.

MSP / FMS / VMS Defined:
  1. MSP – A managed services provider (MSP) is most often an information technology (IT) services provider that manages and assumes responsibility for providing a defined set of services to its clients either proactively or as the MSP (not the client) determines that services are needed.
  2. FMS – A Freelance Management System (FMS) is a cloud-based workforce solution that helps businesses manage their independent contractors and freelancers.
  3. VMS – A vendor management system (VMS) is a Web-based application that allows an organization to secure and manage staffing services on a temporary, permanent or contract basis. It helps centralize the complex issues that surround the staffing. A VMS generally involves the following: Job requisition or staff ordering.

CXC have been an integral part of the Contingent Worker Ecosystem for nearly 25 years. We have witnessed the continued demand for Contingent Workers across the Globe but we have also noted that Government Regulations have not kept a pace with the changes and increased demand for Contingent Workers. Government’s inability to keep up with the pace of change means that end users of Contingent Workers typically are faced with a number of compliance risks including but not limited to:

  • Deemed employment
  • Debt Transfer or Tax Chain Risk
  • Reputational Risk
  • Government Investigation or audit

CXC are acutely aware of those risks, as are the MSP’s, FMS and VMS partners. However, it would be reasonable to state that Contingent Worker Risk Management is not their Core Competency and that CXC have evolved our services to become the global compliance and payment engine of choice that enables those companies (MSP’s FMS’s VMS’s) to compliantly source, pay, manage and engage Contingent Workers.

The Emergence of FMS platforms are of particular interest, as we note the disruptive impact they are having on traditional staffing providers and likely future impact on MSP providers. The growth of FMS platforms taps into end users wanting to directly source contingent workers and also to have access to the best possible talent on tap/on demand.

FMS’s do not typically see themselves as staffing providers or MSP’s, they consider themselves to be a technology platform first and foremost whose job is to match opportunity with Talent.

FMS’s to date have put most of their resources and investment into technology, so their end user clients can access the best talent at the best price point. For the FMS, it make sense to outsource the compliance and payment of Contingent Workers to a third party, so that they can focus on building great technology underpinned by a great customer experience.

As mentioned in SIA’s The Workforce Solutions Ecosystem paper, “In a constantly evolving Workforce Solutions Ecosystem, companies work competitively but also cooperatively to create unique service offerings and satisfy customer needs.  Accordingly, a number of important partnerships enable some firms to operate across more than one segment of the Ecosystem. CXC have developed significant partnerships across the FMS, MSP and VMS ecosystem and this has allowed our partners to provide services and win business that they might not have.

The trend towards direct sourcing makes CXC’s global position and service offerings even more relevant to clients, as we help the mitigate risks around deemed employment, debt transfer and reputational risk resulting from both.

Contact one of our global leadership team in your nearest region to discuss in more depth.

Join us on Twitter and Linked-in:  @CXCGlobal, @CXCGlobal_USA @CXCCorpServices

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