The Staffing Industry Analysts published an article reporting that in 2008, 40% of companies had their own internal workforce. By 2011, the number of companies using MSPs is projected to rise to 64%. Outsourcing to Managed Service Providers (MSP) has been a steadily rising workforce management trend for years, but is it always the best option?

Pros of Internal Management

Establishing a management office within the company is probably going to be less expensive than the initial cost of starting an outsourced office. There is less likelihood of cultural and educational difficulty, and more communication between clients and suppliers.

Cons of Internal Management

Self-managing a company’s workforce can cause poor branch communication and a variety of non-standardized processes. This can lead to unnecessary spending and company finances that fall between the cracks. Companies attempting to manage their workforce internally must have the proper expertise, budget, and time to deal with workplace issues and stay on top of new technology trends.

Pros of Outsourcing

Using an MSP can cut down on the number of employees working fulltime. It can also make contacting people in charge of program management a much more streamlined process. MSP providers have greater staffing industry experience, since they have a greater variety of clients. They are often involved with the latest workforce manage best practices and technology trends, keeping programs valuable and fresh. Additionally, outsourcing doesn’t need to be an all-or-nothing proposition – it can be applied to select facets of an organization. The amount of support an MSP provides can be increased or decreased as the organization employing it deems fit.

Cons of Outsourcing

If it doesn’t make sense to outsource considering company strategy, then using an MSP will probably cause cultural alignment difficulties. Small companies or those with a limited focus might waste more money outsourcing than staying local.

Conclusion

For small businesses with limited resources, outsourcing might not be the best option. Businesses with larger aims, however, might do well to investigate whether the cost of setting up an MSP will save them time and money in the end.