Growing and Evolving with You

Listen as AGS’ Vice President of MSP Business Development, Fred Winstead dives into the world of Managed Service Providers (MSPs). Fred and host, Frank Edge discuss where the industry is today, where it will go, and how technology has played a crucial role in its rapid changes. Also learn different ways of how your mature MSP can still evolve. Check it out!
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Transcript

F: Welcome to Subject to Talent, brought to you by Allegis Global Solutions. Similar to you, we're always trying to learn more. On this podcast we speak to talent experts around the world covering workforce management, market trends, technology, on a forever evolving dynamic industry.  

Hello there, thanks for tuning into today and I hope you are staying safe. I’m recording this at my dining table with my cat staring at me. I think he is pretty confused about this big silver microphone in front of my face. Due to everything going on around the world recently we put a pause in our podcast scheduling to assess the right thing to do during this time. So this episode is a little off schedule. We are currently working on a Covid-19 episode and how it has affected our industry, but this episode was recorded prior to the outbreak. We dove into the world of MSP with AGS' Vice President of MSP Business Development, Fred Winstead. Fred has been with the Allegis family for over 25 years and he’s held multiple roles within the organization’s various operating companies. He joined AGS in 2009 as Managing Director of Human Capital Solutions to oversee and manage the business development efforts of the organization. In his current role as Vice President of MSP Business Development, Fred leads our global MSP sales and solutions, marketing, sales support and technology developments. I hope you enjoy the episode. How are you doing today, Fred? 

FW: I'm doing great, thanks for asking. I hope you're well. 

F: Yeah, really good. How's the family? 

FW: Family is wonderful. They're excited for spring. 

F: Oh yeah. Yeah, me too. I'm fed up with this cold now, could really do with some vitamin D and some warmth. So I want to jump right in, the question that we like to ask at the start of these podcasts is, all around, how did you get industry? 

FW: It's an interesting question. It starts with a friend of mine from college called me a few months before I was about to graduate. He was working at a staffing company called Aerotek and had been there about a year, and he reached out to me to talk about the culture and the opportunities. And I shared with him that, "Hey, I was about to graduate with a finance degree. I was exploring opportunities in the financial and banking sector." So at the time I wasn't interested, but was grateful that he thought of me and to keep me in mind or that I'd followed back up with him later. And he was pretty persistent, and he called back a few weeks later and he had somebody else in the office join the call and talk about the opportunities and what they were looking for with new hires. And so, I agreed to come to Atlanta to sit down and meet with their leadership team and talk about the company and the opportunity, and was immediately sold on their culture. And ultimately I loved the fact that I got to help people find work and take care of their families. 

 So I think I accepted the job before I even left Atlanta to drive back home. And I remained in the staffing sector with Aerotek for about 15 years. I started as a recruiter and then spent most of my time supporting their engineering division, probably the last seven to eight years supporting and leading our aerospace and defense vertical accounts in that sector. And about 10 years ago, a good friend and colleague of mine called me about an MSP leadership opportunity that he had at AGS. And I knew the MSP sector was evolving quickly and there was something that drew me to helping companies solve for larger and more complex talent acquisition strategies. So it didn't take long for me to learn more about his opportunity, and I jumped at the chance to come in and join the AGS team and I've been here ever since. 

F: That's really cool. I really liked when you talk about that you enjoy linking people up with a job so they can support their family, and also you enjoy kind of helping companies find people to solve complex problems. I think, often in this industry we get in the weeds, but if you think about, that's what it's all about. It's connecting people and companies and getting people a job, I think it's great. 

FW: Yep. I wasn't prepared for it, but it gave me a greater sense of purpose, and I found that carried through each of the different chapters of my career. So yeah, that was great. 

F: Cool. Can you tell us a little bit about the MSP offering at AGS? 

FW: Yeah, so I will start by saying that AGS had the same strong culture and commitment to providing great service that attracted me to Aerotek, that I'd referenced earlier. It's probably the primary reason that we have so many tenured people throughout our organization. What I'd want our audience to know about AGS is that we're passionate about helping our clients find new and innovative ways to solve for their talent acquisition challenges. We're a global leader in the MSP sector and our primary focus now is to help companies find a more effective way to get their work done, not just filling job requirements, but assessing all types of work, be it through staffing providers, independent contractor services firms, or even incorporating perm support, but tying all that together to help companies more effectively find ways to their projects or their work completed. 

F: And if we're looking at how the MSP solution is developed, would you describe the sector growth over the past three to five years to be slow, fast, or on pace and why? 

FW: I would say that the industry has grown at pace over the past three to five years, maybe even above pace when you factor in the growth that we've seen from the services side of the business. The analysts estimate that in 2018 we grew at about 13% to about $150 billion that it's been in the sector. In 2019 we look to have grown about 10% to 11%, and in 2020 we believe that we're going to see the staff aug side of the business level off a bit and slow, and we'll still see continued growth in the services side. So, on pace up until this point, but I do see things leveling out a bit. And as far as how the MSP solutions have developed over the past three to five years, you've definitely seen services included in most of our MSP solutions. 

Companies now recognize the value of having more visibility and control around this part of their spend. We're also seeing companies utilizing a single global MSP versus having different MSP set up per region. So most MSPs have evolved to the point where they can manage a global solution for a client and then customize those solutions in each region to support the local demands, so that's been a trend that we've seen over the past three to five years. A big area of development that we're also seeing is that companies are now incorporating a lot of new automation and technologies that streamline their recruiting and MSP processes. They're allowing programs to attract and place talent much faster than we ever could five years ago. 

F: That's great. Thank you so much. And with organizations and the extended workforce, what trends have you seen arise in the past five years? 

FW: The one that I've talked about earlier, but it's a big one, is that the services, including services as part of the programs. Five years ago, companies simply wanted visibility in to the headcount that they had tied to SOW's and the services spend. That work has now evolved to the point where MSP is providing treasury, spend analysis, and even RFP and sourcing support for their programs, so that's a big trend that we've seen over the past five years. Over that same period, we've seen a heavy focus on business intelligence, things like market analytics, advanced reporting requests, comparative analytics, more companies now utilizing real time data to make informed hiring and budgeting decisions than they ever have before. So we've seen a growing demand for global solutions that require customized support for their specific regions. 

So as an example, we have programs that may have a vendor neutral model and structure in North America because that meets the needs and objectives of the hiring managers in that region. But there is a vendor positive model that we stand up within the same company and EMEA and in APAC we have a blend, we have kind of a hybrid solution where we have a neutral supply chain that supports part of the business, a vendor positive master vendor supply chain that supports another part of their business, but we tie all of those regions together into one holistic MSP solution. So that's been a trend that we're seeing more and more, going to one global MSP to manage each of the different regions. 

F: Okay. And you touched on vendor neutral and vendor positive there, can you expand on those? What does that, those terms mean? 

FW: Vendor neutral is when you have several suppliers in your supply chain that all have equal access and equal opportunity to recruit and compete for open requirements within a certain part of the program. Vendor positive is where the client, because of higher volumes of work in a particular area or skillset, the client, it's more economical for us have a preferred vendor or a single vendor to provide work in one particular area. So we call that vendor positive or even a master vendor scenario where companies can come on premise and they are accountable for providing a particular skill set or a particular service in that part of the solution. 

F: I see, okay. And different areas require different kind of arrangements? 

FW: Exactly. So companies need to have the ability to flex and scale to build that custom solution that meets the specific objectives of the clients they're supporting. 

F: Okay, perfect. Thank you. What are ways that you think great MSP companies differentiate themselves from their competitors? What things should an organization look out for in an MSP partner? 

FW: First, these companies must have the resources and the expertise to effectively design a program that can manage all non-employee talent channels. They need to be able to demonstrate that they can manage staff OG, services, procurement solutions and services, independent contract work, gig workers, but they need to be able to have tenured resources that can come in and prove their abilities in managing all these different channels to get the client a very custom solution that meets their specific needs in different parts of the business. BI is another area that we've talked about, business intelligence. Companies must demonstrate the capabilities specific to reporting and analytics. This includes right card development, supply chain management, market assessments and comparative analytics that highlight the overall performance of a program compared to industry averages. The best MSPs are going to have real time data that allows their clients to make informed hiring and planning decisions much faster than they could in the past, so those are some key differentiators. 

Outside of strong business intelligence capabilities, I'd say other differentiators include having a proven change management process that clients have to leverage, not only when they implement and stand up a program, but as they expand the program over the life of the MSP. So over the next two, three, four years, the companies should evolve and grow, and they could expand into different parts of their business, they could expand globally. But needing and having a strong change management process as important for any partner that you're looking for. We talked about this earlier, but being able to have a partner that can customize a global solution, that understands all the different laws and regulations globally that apply, so that you can give a holistic solution to your client, designing a way that meets the local needs within each region. And make sure that you're compliant in the way that you set up and structure the program with all the different local laws and regulations that impact the way that you can procure and onboard talent. 

Lastly, I would say look for companies that can demonstrate their command of how they utilize various technologies that help digitize and enhance program performance. There are a lot of different technology companies that are entering this space and they have different tools and capabilities that can help us either operate more effectively internally or they streamline the process and help us identify and attract talent for our suppliers or our clients much faster. 

F: And I just want to go back to a point, you just mentioned there about the customized global solutions, and you mentioned earlier about specific regions needing a different setup. And I know with AGS being a global company, there's probably different challenges in each region of the world that you kind of need to know about so you can react and help your partners. Can you get given the example of these challenges? 

FW: So the primary challenge that we focus on when we're looking at global solutions where multiple countries within multiple continents exist, is making sure that we adhere to the different laws and regulations that exist in each country, and that they have employees for both procuring and managing contract labor or services spend. We have several programs where we hold contracts and manage treasury in certain countries, but we can't in others do to local laws and regulations. Then there are other markets where we have cross border recruiting policies and regulations that have to be factored in as we're standing up the different delivery models, and how companies can recruit talent from one country from another and pull them into the program. So all of these different laws and regulations need to be identified and acknowledged and factored into the overall solution of the program that you're building for our company. 

F: Perfect, thank you. And how do you see the advancements in technology within our sector affecting MSP services for the better? 

FW: I think I'll start by saying technology in our space is evolving at a rapid pace and is going to continue to do so as employers strive to grow and succeed in a world where workers with critical skills are scarce and the competition for these employees is very high. As far as the specific advancements that we're seeing within the sector, I see, or we see a lot of companies aggregating data from various talent channels and leveraging the power of artificial intelligence and machine learning, to simplify the hiring process and gain better access and faster access to available talent. 

We're going to continue to see advancements in how companies use chatbots for recruitment activities like sourcing and shortlisting, so essentially these advancements in technology are going to help transform recruiters and staffing specialists into what we're calling talent advisors. And these are resources that have the expertise to help deconstruct their requested work or a project that a company has, and use the data coming from these different tools and systems, that can help guide a hiring manager to make the best decision possible when selecting talent based on their need for quality, speed, and cost containment 

F: Talent advisors, I like it. It's like in a lot of different industries now, technology is coming in and it's just adding value to people's roles, and it sounds like this is what's happening here. It'll take over a lot of tasks and then the talent advisors are going to become much more valuable. 

FW: Yeah, you'll find it to be much more consultative based on the data they have available to them now that they didn't have available to them three, four or five years ago. 

F: Great. And if we think about organizations that have MSPs in place and they want to kind of build upon that partnership, what other service offerings would pair well for clients that have a mature MSP? 

FW: So Frank, there are several key areas where we're seeing mature MSPs evolve today. So let's start with the programs that already have some level of services procurement spend and scope that typically provide your basic head count tracking and treasury support. There's a huge opportunity here to elevate the value that these companies receive in this area. As an example, a lot of companies will need help extracting unstructured data from their SOWs, but we can then use that data to help drive cost savings, to select the right suppliers based on performance metrics, to increase compliance, but ultimately give greater internal efficiencies and awareness for the end users. The second area where we see companies maturing, are programs that are starting to leverage the client's brand to attract talent. MSPs can build campaigns that not only attract new talent to their customers, but pull in the client's alumni, freelance workers, and referrals, in to a specific talent pool that can be used to fill key openings and support critical projects. 

 The last service offering that I would pair with a mature program is RPO. RPOs provide clients with permanent staffing support. Now, the concept of total talent management has been around for a long time, we just haven't had the right technology to pull those two service offerings together the way that we can today. But by having a program that jointly manages your perm and your contingent talent demands, companies now gain more effective ways to manage their overall workforce needs. So I would say those are the three key areas that we're focusing on today or that we see a lot of support from customers. 

F: So how would you describe the current MSP industry? 

FW: I would say the current MSP industry is that an interesting point. Some say we're at a standstill, I believe we're entering a new transformational era, where MSPs have to evolve to remain relevant. The MSP market's matured considerably since I entered the space 10 years ago. Companies are demanding much more value from the MSP partners beyond just initial cost savings and risk mitigation and improved visibility, they want next generation benefits and innovation. In fact, they're demanding it. They want a lot of the services that I've referenced before. They want services management. They want talent pools. They want better automation. They want real-time reporting analytics that help them make more informed decisions faster. They want spend analytics. They want all these different services above and beyond the kind of the foundational elements of the MSPs that we've grown up with. Ultimately what we're seeing and what we're going to see, is this shift from filling job vacancies and requisitions to proactive workforce planning efforts that help hiring managers complete their work faster and more efficiently regardless of what talent channel they're pulling resources from. 

F: Fred, where do you see the MSP in the next 5 to 10 years? 

FW: I see our industry evolving at a rapid pace. Companies are going to increase their emphasis on getting work done as opposed to just finding talent. And organizations are going to require more than just a delivery partner, they're going to want a strategic partner that can help them design and execute a forward thinking extended workforce management program. We're going to see corporate leadership and procurement and HR decision makers come together, and instead of asking the question of, "Who do we hire or engage for a particular position?" That's going to be replaced by new concerns from that group, "What is the best way to achieve the outcome that we're striving for? How should we engage the right resources? How much is it going to cost? How long will it take? How do you make sure that we're compliant as we go through this process?" And, "What is the optimal most effective, reliable path to success?" 

 So cost and compliance and efficiency are going to remain the core foundational elements to any MSP model. And we're preparing solutions right now that enable companies to access and manage all of their non-employee resources through a single function. This function is supported by a technology platform that brings all 9 employee talent into a common technology ecosystem. So I see the market evolving in that way over the next 5 to 10 years, really powered by new technologies and tools that'll help us now accomplish these tasks. 

F: And Fred, our final question, for those listeners that are considering an MSP, what voice do you have to them? 

FW: Frank, the best programs that we see today are the ones that have strong alignment and collaboration between their HR procurement, IT and their talent acquisition departments. So my advice for anyone considering MSP is to make sure they get the leaders of these different departments involved early. What you're going to find is that it's much easier to establish your overarching business objectives that your MSP partner will be held accountable for if you get their input in and you identify what challenges each of these different departments are trying to solve for. You're also going to gain adoption for your program much faster if these departments see the value in the program. 

The second recommendation I would make is that the MSPs that you're considering share with you the tenured resources that they're going to use to implement your program, the teams that will integrate with the different technologies that you have, and then the operational leaders that are going to run your program. I would make sure those resources have experience building in solving for the problems that you have today. My last piece of advice is to make sure that you find a company that shares your values and demonstrates a strong cultural alignment with your organization. You're going to be solving some pretty complex problems together and you're going to need your partner that you can rely on when times get tough. So I would say those three areas are the ones that I would start with when I'm considering MSP. 

F: that sounds like some great advice and especially that last point there. So Fred, thank you very much for your time and thanks for coming in. It's been great to speak of you, and I hope the listeners found this informative and helpful and have a great day. Thank you so much. 

FW: Thanks Frank. I hope our audience finds our conversation helpful and I look forward to responding to any questions that might arise. Have a great day. 

F: Thanks for listening in today. If you would like to learn more about how a MSP could help your organization, please visit our website, allegisglobalsolutions.com. If you have any questions for Fred, feel free to tweet him @FredWinstead with the #Subject to Talent. Also, if you have any suggestions or topics that you would like us to cover in our future episodes, you can email us at subjecttotalent@allegisglobalsolutions.com. We've got a lot of great connections and stories to tell, so let us know what you'd like to hear. If you enjoyed our podcast today, please share with all your colleagues, subscribe, rate us, and leave a review. Until next time, cheers.  

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