As the preferences of workers evolve, organizations must adopt new ways of engaging with the specialized knowledge workers they seek. Increasingly, organizations are engaging [MSPs] given the rapid evolution of contingent workforce and the technological innovation happening in this space.
AUSTIN, Texas (PRWEB) November 04, 2019
Economic uncertainty and millennial workers’ preferences for workplace flexibility are pushing organizations to leverage contingent workers in their workforce. On the back of this rising demand for contingent workforce across geographies and industries, the global Managed Service Provider (MSP) market has continued its double-digit growth momentum (13%) in 2018. According to Everest Group, the total annual contingent spend managed by MSP service providers stood at US$144-149 billion in 2018. More importantly, MSP spend is expected to grow at a rate of 10-12% to touch US$160-165 billion in 2019.
Organizational challenges also are contributing to the rising demand for contingent workers. These include scarcity in the talent market, the availability of niche skills in the contingent segment, and the need for organizational flexibility and scalability.
“As the preferences of workers evolve, organizations must adopt new ways of engaging with the specialized knowledge workers they seek,” said Vishal Gupta, practice director, Business Process Services, at Everest Group. “Increasingly, organizations are engaging Managed Service Providers given the rapid evolution of contingent workforce and the technological innovation happening in this space. The scope of services being delivered by MSPs has expanded greatly and will continue to do so as buyers look to their MSPs for managing SOW spend, direct sourcing, automation, consulting, analytics and insights, total talent acquisition, and other strategic services beyond the traditional, transactional activities of recruiting temporary workers.”
These findings are discussed in more detail in Everest Group’s recently released report, “Managed Service Provider (MSP) – Annual Report 2020: Leading Through Market Disruption.” This research provides comprehensive coverage of the market across dimensions such as MSP market size and growth, key MSP market themes, and buyer adoption and solution trends.
Everest Group identifies these key themes in the MSP market:
- While traditional temporary labor still constitutes a major part of the MSP spend, services procurement / Statement of Work (SOW) spend managed by MSPs is slowly capturing an incremental share of the pie, owing to its rapid growth across regions.
- In 2018, the market continued to witness an uptick in the number of requests for information (RFIs) for Total Talent Acquisition (TTA), which is the holistic management of all kinds of talent requirements of an organization (permanent and contingent hires) under one roof.
- The market also witnessed faster growth in the mid-market segment compared to other markets, owing to increasing buyer interest and development of productized offerings by service providers.
- Direct sourcing is increasingly being leveraged by enterprises and MSPs as an alternative sourcing mechanism due to its multiple benefits. (Direct sourcing involves leveraging enterprises’ employer brand to create internal and external talent pools to source candidates.)
- Digital technologies in talent acquisition are advancing rapidly, and as the contingent workforce across industries and buyer segments is taking different shapes and forms, the role of technology in MSP is becoming all the more crucial.
- Next-generation digital technologies—including advanced analytics, natural language processing (NLP), machine learning (ML), robotic process automation (RPA), and blockchain—are being increasingly leveraged in MSP engagements to create valuable insights, cost reductions, and superior experiences for both candidates and hiring managers. This is also prompting service providers to make dedicated investments to stay relevant in the increasingly competitive market.
About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.