Why it's time for an alternative MSP model: A fireside chat with KellyOCG Vice President, Matt Yeager


Ray Culver: Hey everybody. Thanks for joining the session. I'm excited to have this conversation. I'm joined today by Matt Yeager, vice-president with Kelly OCG. Today, we're going to be talking about the supplier funded MSP model. Is it still relevant in 2022, just and really digging into that.

Ray Culver: So with that, Matt, if you want to introduce yourself. 

Matt Yeager: You bet, right? Thanks. I'm humbled and honored to join you and the participants today. It's a topic that's near and dear to my heart, for sure. So, again, Matt Yeager, I get the privilege at KellyOCG to lead a new business development. I lead Solutions Architecture. I lead pricing and now I lead implementation services. So right. It's kind of the whole gamut from new business development onto launching our program. So I have a front row chair now of not only pursuing and working with the world's most dynamic organizations, but launching world-class talent programs.

Matt Yeager: And. Timing of the topic is great. I guess I've been some sort of in the staffing world for, I don't want to date myself, but a long time. And again, the topic is dear to me because I think, you know, I'm proud. I'm proud, certainly of what we do. I'm proud of what the industry does. And I think we're ripe for a repositioning to change.

Ray Culver: Perfect. Well, I'm excited for the conversation and I completely understand the whole thing. I don't want to date myself because I have been in it for a while as well. So a little bit about me. My name is Ray Culver. I am the founder and CEO of CWSolutions Group. We are a consultancy and advisory firm who really focuses on the MSP channel.

Ray Culver: So whether it's staffing suppliers, staffing, partner is looking to expand the MSP channel or is looking to really create a new MSP channel. So supplying into MSP programs, that's where I can come in and help. So super excited for the conversation today. I think. It's very timely. I think it's a controversial topic just because it's like, okay, if you're going to replace this, what are you going to do?

Ray Culver: Like, how are you going to do it? So I'm super excited to talk about the models. Alternative models and things like that. I will give Mr. Yeager a plug here. There was an awesome blog post that he did. We'll make sure to put it into the chat, but the blog was really around. Is it time to terminate the supplier funded MSP model?

Ray Culver: So some great insight there. Again, we'll put it into the chat and you can check it out. So with that Matt lets get started. 

Matt Yeager: Sure. Yeah. 

Ray Culver: So I figured the first couple of things we would focus on would be the current landscape. So kind of the current model explains to the audience just because I think the audience is made up of folks who supply to the MSP channel folks who don't supply people who are looking to get into it.

Ray Culver: So like what is the traditional supplier funded model? What does it look like? 

Matt Yeager: Yeah. Ray. Thanks. I would tell you that traditionally, there are three MSP funding models. One is supplier funded. The second would be customer funded or client funded. And then the third would be a blend, a mix of both.

Matt Yeager: So to define the supplier funded model, you know, simply put Ray When the supplier funded suppliers that participate in the MSP program and make the placement pay 100% of the programs, MSP fees. So the supplier Ray, pays a small percentage of the bill rate, and that is retained by the MSP to cover. All of the overall costs of the MSP program.

Matt Yeager: So if you think about it the MSPs have been around for 25 plus years. We've been using what, what started out as a supplier funded model and a lot has changed in, in, you know, well, over two decades, a lot has changed. So as an MSP provider, Ray, we're being asked to do far more. And be involved far more in a company's overall operating reality than if you think about it.

Matt Yeager: The MSP began 25 plus years ago, really around perhaps cost-savings compliance and this notion of vendor neutrality and it's evolved so much more. And so, you know, we've been thinking about it a lot. I've been personally thinking about it and certainly a Kelly OCG. We just need to rethink the current model and stop focusing so much on price and focus more on contributing business outcomes for our customers, especially in today's times where, you know, talent is number one.

Ray Culver: Yeah. Yeah, absolutely. And I think that is such a, I know with the staffing partners that I speak with is such a driving thought or factor is the talent is becoming harder and harder to find. So, you know, when you and I talked about it, if you have a resource and you know, you start to prioritize requisitions, which we'll talk a little bit later, but I mean, that's kind of where some of the MSP supplies at is, do I sit on the top here?

Ray Culver: Do I send them there? Like where do I send the person to, that can be a hard choice for the supply? Well, not necessarily a hard choice. You're going to go in one direction, but I mean, it puts the supplier in a situation where it's like, okay, I've got to choose. And I'm not quite sure how to do that. 

Matt Yeager: Yeah. The demand dynamics are certainly making this a prevalent exchange. 

Ray Culver: Yeah. So what exactly does the MSP fee pay for it? Well, what's included in that massive MSP fee? 

Matt Yeager: Well, I don't know. I don't know that it's a massive Ray.

Ray Culver: I was kidding. I was kidding there.

Matt Yeager: I know. It includes a lot and, you know, At a high level, let's just start with implementation.

Matt Yeager: Okay. So if we're launching a new program or even if we're relaunching or taking over a program, there are implementation efforts. And, you know, within that just, you I've got project management, I've got technology configuration, I'm working on integrations. I'm definitely deeply rooted in change management.

Matt Yeager: I'm doing supplier negotiations, I'm working on onboarding and contracting with those suppliers. I'm working on data collection. I'm working on data migration so that the current or the data that that client has gets into the new system, extensive rate card development, market rate development, and we're setting up proper invoicing just to start.

Matt Yeager: That's just implementation. And by the way, 9 times out of 10 it's before we earn a nickel. We're setting up a PMO office that this PMO office works around the world. It's language specific, it's culture specific. It's working in the dynamics of different employment laws. Certainly when the program's up and running, it's doing order-taker it's white glove service.

Matt Yeager: It's coordinating it. Scheduling, onboarding, offboarding ticketing, Issue resolution. Account leadership leader, timekeeping, just to name a few of the things that the PMO office does. Some other high level things are technology. We've got digital capability platforms that we deploy. Certainly high-level analytics.

Matt Yeager: We are now doing DE&I strategy consultation with our customers, strategic workforce planning, Ray could go on and on and take the full 45 minutes. But it's a lot. And, you know, by the way, just think about March of 2020, when COVID hit. Companies. I haven't heard anyone in the industry that had an MSP that said, oh, sure.

Matt Yeager: Wish we didn't have an MSP during that time. Just think about it within hours, right? The MSPs of the world within hours went to a complete virtual model. We went to a complete virtual delivery model. And so did everybody that supported that MSPs, but Ray. Just think about that for a second. And the technology costs that we had to bear to do that.

Matt Yeager: And we're not even factoring that into our MSP pricing, but there's a lot that goes into an MSP and I think we need to be. We need to be crazy proud about the collaborative work that goes into an MSP. 

Ray Culver: Yeah. And I think it's amazing. I mean, you talk about, you said just a few minutes ago, so much goes into it before you even start to learn, I mean so much of the implementation and really the solutioning and that, and I know part of those teams are kind of part of your teams. You get to see it firsthand, but I mean, that is amazing that you're putting. Resources and you know, which equates to $ before anything even happens. And this is even once the contract is signed.

Ray Culver: So contract signed, you have a period where you're solutioning, you're implementing not necessarily being built. So there's that period where again, you're putting forth dollars and it's not being reimbursed. I think that's a huge thing that a lot of folks probably don't think about when they think about the very beginning of an MSP program.

Matt Yeager: Yeah, Ray. Not to mention the risk that we bear because we think the program is a certain size and the risk that we bear to implement that program. And what happens if it's not a certain size and it's a when the commercial model is a, basically a variable model. And it's. 

Ray Culver: Yeah. You talked about it a little bit on the top end. So, you know, who pays for the MSP fee historically, you talked about, there were three different models. I know there was some research done that you and I were chat about. I think it's roughly 70 or 80% within the North American markets. That is, if not a little bit higher, that is supplier funded.

Ray Culver: So that's obviously the largest. Funding model here in North America. I think it varies throughout the world in different markets, but you know, and most people will notice because they play in the space. But how does that affect the pricing in the market? Like a need for the supplier and again, this is, everybody probably feels this, but explain to the audience who doesn't play in this space, how does that affect their margins?

Matt Yeager: Well, I think it affects it a lot. I mean, probably Ray was a time where. Again, I think the supplier funded model made sense. But again, as I mentioned, I think it's more than just the fact of who pays for it. It's also the thinness of the margin by the way. But you know, none of these things acquiring great talent is certainly not free and it takes a ton to develop and implement sourcing Strategies.

Matt Yeager: Recruitment strategies and in today's marketplace. So it has to affect the margin. I mean, I used to say in some ways that, from a staffing firm perspective, it reduces their cost of sale, but they've got now so many more opportunities and choices to where they put that talent that I think on the back end of it really affects it.

Matt Yeager: It's gotta be, it's gotta be on the value delivered and we need suppliers to deliver more, not less and compressing having them pay that fee and compressing their margins by the way. Some, in some cases, not only did they pay an MSP fee, but by the way, they pay a volume rebate. And by the way, they're stuck.

Matt Yeager: And in that contract to a certain markup, That margin is really slim.

Ray Culver: Yeah. I mean, and that supplier is being asked to do a lot with that slim margin, because I mean, that's, you know, the MSP partner, ultimately the end client, that's a client. So you go through your entire recruiting process. I mean, everything, you know, that you are doing for maybe a higher margin type of business, and you go through the entire process.

Ray Culver: And again, you're being asked to do it, just raise the margin. So, I mean, again, I go back to, it puts the supplier partner in a situation where they're having to make choices and it's not always a great place to be. 

Matt Yeager: Well, they've got to prioritize, you know, they certainly have to prioritize. Where were they put that labor work?

Ray Culver: Yeah. So we've got a few minutes left to kind of make sure that we wrap up on the current landscape and the wrench off to alternative models. So just kind of closing, rounding this out in your opinion. What is, and we've talked about a lot of stuff, but just kind of recap it for the audience. Like what's not working when it comes to this very traditional model

Matt Yeager: For one, like, like I said, I think just the overall talent to my demand and supply challenges that exist today to the managed service provider. Kelly OCG, as an example, is asked to do so much more than just basic requisitioning. Okay. And so, and it, you know, Ray, and I would say the third is over the two plus decades.

Matt Yeager: I think fee, even that fee has come down. That in some ways could help them acquire, but it certainly isn't having a negative impact on the managed service provider. So I think it's, it boils down to, we know we, we have to do more and are being asked to do more with our customers around their overall ability to deliver a product or deliver a service and we can make, and are being asked to make significant impacts and.

Matt Yeager: I think the marketplace just has to be aware, currently, the margins aren't really perhaps from an MSP perspective, what the world thinks and Ray. I think bottom line suppliers have choices now and where they're going to place their talent. And those, the dynamics around the demand, supply challenges.

Matt Yeager: They're not going away. 

Ray Culver: Got it. Good deal. Thank you for that. So let's move and kind of jump into, I think we've done a great job with giving the audience either a good understanding of the current landscape or kind of there's probably a lot of staffing partners out there who are shaking their heads in the affirmative and like, yes.

Ray Culver: So I want to jump into now kind of the alternative models and really. Get your opinion, take your brain, see what you're seeing in the market, as it pertains to alternative bottles and things like that. So help me kind of describe what alternative MSP funding models you're seeing or that you have seen in the market.

Matt Yeager: Yeah, I think some form of variable and fixed pricing. I mean, look at the Amazon prime membership, right? I mean, I get certain things with my Amazon prime membership and certainly if I want more and I want to watch Yellowstone or something and full surround sound, I pay for it. So, something to that degree we're working in and with some of our customers on per contracting fees or per contractor fee with volume bands.

Matt Yeager: We're working with some of our customers on service-based All cart pricing you know, and fixed fee and fixed volume of those services. So we're seeing a lot of we're certainly getting a lot more traction in this conversation. We're, we are working with more and more customers that realize, you know, we're gonna, we're gonna fund this.

Matt Yeager: We're going to reap the value. So we're going to fund that. Without question, you know, outside of contingent labor, if we think about our services procurement programs, clearly those are migrating away from a supplier funded mechanism, and much more client funded. So those are just maybe a few variable options that we're seeing some in the market should be seeing some success around.

Ray Culver: Perfect. So you touched on a few of them, but, and the next thought would be kind of twofold. One is, are you seeing? Clients and end clients allow for charging accounts for those pop services. So, like you mentioned, some of them like the data analytics, headcount tracking, just other things. That's the first part, the second part, because again with you leading sales and stuff, I mean, you know, I would love to just kind of dig into some of the things that you are seeing in the market that the client is asking for.

Ray Culver: And when I say that, I mean, this is kind of the leading question, data analytics, head count, tracking, things like that, but just to give the suppliers. Partner an idea of what's being talked about, things like that. So let's start with the first half and talk about, do you know, are you seeing clients who are allowing that?

Ray Culver: Because if a client's asking you as the MSP partner to not only run the program, but also provide ABCDE. Which is, you know, you have to pay money for those things. Like, are they allowing that to be charged back or that type of thing? 

Matt Yeager: Yeah. I think one of the things I wanted to mention is I think we've got to get the industry.

Matt Yeager: I think we've got to get organizations to be budgeting for contingent workforce. We've got to have that in their budget so that it would allow for some of the paintings of these services. We're seeing a little bit, we're seeing some pay for implementation, activities? We're seeing some pay for a, you know, a baseline of analytics and charging for a bit more from an advanced perspective.

Matt Yeager: We're definitely getting, you know, seeing some customers pay for DE&I consulting and some of those sorts of programs that we're integrating into it. I keep hearing, you know, worker tracking is free or your competitors offering worker tracking for free. I don't know. I don't know how in the world, we could track any form of talent for free, but we have customers that definitely are paying for that, you know, the advanced things that we're doing around worker tracking and those components.

Matt Yeager: So they're, they are by the way we do have, we have multiple programs that are in fact client funded. So they're paying for the entire fee, the entire. 

Ray Culver: Nice. 

Matt Yeager: I missed the second part of your question. 

Ray Culver: Yeah. The second part was really around, you know, some of the different things that you're seeing, the data analytics and headcount tracking, just things like that, things that you're, you know, being, not asking to give away any secret sauce, but I mean, like, you know, what do you see in our fees?

Ray Culver: You I mean, like, what are you seeing? Some of the things that it's like to repeat this is unique or this is kind of a change because the. Across the audiences, these things that you're seeing, that's also part of the supplier funded model as it sits today. 

Matt Yeager: Well, I guess I'll try to answer that.

Matt Yeager: Ray, the things we're seeing in asks or requests don't equal the commercial model that they're requesting us to do. Yeah. So I, and I see that you know, it pains me to lob over something to our architect and pricing team and our professional service organization to work through a robust proforma on all the things that we're being asked to do, but yet be it the commercial model that we think this prospect or client is asking us to be at, it's literally impossible.

Matt Yeager: So I, you know, I'll say, I think there and that's what starting to definitely, that's why we're having these conversations and what they're asking for to make the difference, the differences that are required in the industry and within their organization cannot be done on buyer funded, very thin commercial model.

Matt Yeager: Is that a fair answer?

Ray Culver: I think that's a very fair answer again, kind of what it's kind of a leading question. So I really just, again, I want the audience of staffing partners and supplier partners out there to kind of understand that a lot of these things that are being asked of the MSP partner, you know, it's, again it's being layered into this supplier funded type model.

Ray Culver: So it seems like that, and we see this a lot in the industry today. The asset is getting bigger, and necessarily a dollar amount. So to go along with it, to pay for her, not getting bigger or changing. So I think that's something that, to your point, I think the industry has. It has to correct itself.

Ray Culver: I think it has to kind of catch up with itself to figure out who's going to pay for some assistance. As we were kind of prepping for this and talking about it, and we've talked about it throughout the conversation thus far, what are your thoughts on, let's say a monthly fee structure for a base MSP program.

Ray Culver: So like, I mean, in other words, kind of, this is what you get for this fee, but then the LA carte pricing says, if you want this. Is what it costs if you want this. So like really, almost creating that menu effect. What are your thoughts on that? 

Matt Yeager: Yeah, I think it has to happen, right? I think some form of variable and fixed makes sense by the way.

Matt Yeager: Ray. I think by doing that, it would help the buyer differentiate the level and offering of service that they're going to buy. So, for example if they had to pay for implementation services and they should, what, you know, the folks that are bidding on that work what are they going to be doing to implement this program and what differentiators does A versus from B bring to that implementation?

Matt Yeager: So I think it would help in a lot of areas, but I think it would help the buyer differentiate the level of offering that they're going to market to buy. 

Ray Culver: It's funny. I've had multiple conversations lately with MSP partners tech platforms, and a lot of it was around implementation.

Ray Culver: A lot of it was around. And you talked about earlier in the call building out a program that's based upon totally making up these numbers based upon 50 million in spend. When in reality, the first year you see 10 million spent. So it was like you put all these resources towards it. You built this program with performance built towards this.

Ray Culver: So a lot of the conversations that I've had, like these, like, okay, how do you kind of create that inclined volume? Like, you know, how do you make this something where they have. They've invested into it. So I mean, it really behooves them on the front end to be very truthful in, is it 50 million?

Ray Culver: Is it 10 million? If it's 50 or are you going to put kind of parameters in place to where there is no rope spent? You know what I mean? Like you have to go through this program because I think a lot of times that you, this better than me, a lot of times what happens is it's 50 million, but if you don't put those guards in place.

Ray Culver: That 40 million is still going outside the program because there are no guardrails to say you can't do that. You have to go through this program. So, I mean, just thoughts on that. I mean, does that, would you agree with some of that?

Matt Yeager: I agree 100%, you know Ray, value with the same value equals benefits minus costs.

Matt Yeager: And if somebody buys something and they believe it is free. Yeah. That to me is a big part of the exchange. We've again, I'm proud of what we do. I'm proud of the industry. And I think bottom line, the value that the MSP and the supplier brings to said client organization around third-party labor and having an impact on their business. It's that value. And I'm being far too simple here, but I think we've gotta be really proud of that value and not give away those things that eat at not only the MSP margin, but the supplier margin. 

Ray Culver: Yeah. Yeah. And then kind of talking about that, the margins and the alternate funding models and things like that.

Ray Culver: I do want to, again, I'm going to keep giving you plugs just cause there's another LinkedIn article that I read. That was pretty, it was spot on for what we're talking about today. And especially with the question I'm about to ask you. So LinkedIn blog I'll put the link in the chat as well, but it was really around.

Ray Culver: Why a company should be budgeting for their contingent workforce program. So I think again, I would love for the audience to hit the link. I'm going to put it in there, go check out the LinkedIn article. It's awesome. Now the question is Matt, you know, who would pay for the MSP program or the fee and some of these all targeted models.

Ray Culver: So I think that's a leading question because I think I just set it up for you, but I mean who pays, 

Matt Yeager: We think it's the client. And certainly we're seeing more and more of that there, the marketplace is realizing that, you know Ray, I don't think anyone in the world would put in a new HR system without budgeting for it, for the overall cost of that new HR system.

Matt Yeager: And I think the same should be true around contingent labor. It has to be, you know, Be part of an overall budget within an enterprise organization. You know, a great contingent of labor in the camps to bring visibility expertise, empower hiring managers, bring a superior level of service and deliver just great talent experiences.

Matt Yeager: And I think bottom line, it's been hard to do that in the margins and. You know, the straight answer to your question is the customer, the one that's receiving the value? 

Ray Culver: Yeah, I think, I mean, I know that there again, there are probably a lot of staffing partners who were in the session who agreed because they'd look at it every day, you know, and they are forced to make the choices, try and figure it out.

Ray Culver: No, and I've built in led MSP channels. So I know firsthand from a supply perspective. When you sit in front of your MSP partner, it's hard to, you know, when they say, why are you not submitting? Why are you not supplying? You know, it's hard not to want to make them "happy", because they were the client.

Ray Culver: So when you can't do that, because talent has gotten so much of a shortage, it just puts the staffing partner in a very bad place when they have to do that. 

Matt Yeager: Yeah. I, and I think, you know, contingent labor in this third party labor definitely has a top it's at the C-suite right?

Matt Yeager: So those conversations are happening, CEO, CHRO. You name it. So I think us in the marketplace, just elevating this conversation, I think it is starting to turn, they're seeing again, I go back to the beginning of the pandemic, this global pandemic. I didn't hear anybody, you know, that wasn't happy that they had some sort of a program managing and every worker was and what they can do.

Ray Culver: Yeah. Yeah. I mean, that makes perfect sense. So from here, we've talked about the current model, what's in the market today, or like what's dominant in the market today, we've talked about the alternative models, kind of what you're seeing, what you're hearing in the market. I would love to talk a little bit about how this audience can begin to have conversations and really affect change. So that would kind of be where we go now. You know, what impact do you see on the industry? If more of these alternative funding models are embraced? 

Matt Yeager: I think we're going to get greater value. You clearly are going to get greater value from the supplier. You're going to allow them to innovate and develop channels within their business that they haven't been able to do.

Matt Yeager: And, you know, Currently, we have a duty to invest in that and support that. I think you're going to get a, you know, you're going to get a lot more value. We're seeing it clearly. We're going to, you're going to get a lot more value and our ability to do more from an MSP perspective is there you know, one of our, one of our recent workforce adult agility reports Ray, I mean, everybody is going to employ more and more contingent workers in whatever fashion that is.

Matt Yeager: And, you know, the industry is only going to grow and I feel like there's this it's, we're in a weird spot, a dicey spot for it to allow it to grow, which we think it will, that commercial model is going to have to change. And I know. Everybody will benefit from it, but the customer, well, the most there, the end customer will benefit the most by the value that they're receiving from the supply base and their managed service provider.

Ray Culver: Where do you think, where does this change in thinking. Like what is the model, where does it begin? I mean, like, how do you, obviously you're coming from the MSP perspective. We have a lot of supplier partners, staffing partners on the line. Where does it, is it a mix of both who kind of owns this change management and this thought leadership?

Ray Culver: I mean, where does it begin? 

Matt Yeager: Yeah, I think so. I think there's a, there, there certainly are a lot of smart people in this industry that are, there are capable experts, Ray. And in some ways we're all kind of being held back by this, by the commercial model. That's well, over two decades, that's well over two decades old.

Matt Yeager: So, I think it starts there. It starts maybe with organizations like, like this today and just being again, proud of the industry, proud of the value that we provide. I think an awareness of that, and the impact that contingent labor has on enterprise organization, just the positive impact that it has.

Matt Yeager: I think it starts with all of us. 

Ray Culver: Yeah. Given the teams that you lead and that you have like an immediate, you know, scope into, on a daily basis, like, and within the Kelly OCG organization, Matt, how are you and your teams, how are you approaching? These conversations with the clients. Like, I mean, how is it again, how are you approaching these conversations?

Ray Culver: I'll leave it at that. 

Matt Yeager: Well, I've done it. I've got a pricing team and solutions architecture team, probably thinking I'm nuts, but we're talking about we're noodling and grinding on this each and every day. I got, you know, I'm hesitant to even say this Ray, but I will. I mean work, we're saying no to business. We are saying no to business now where commercially we know it's not gonna, it's not going to work. The customer's not going to get the value that they went to bid for the things they asked for.

Matt Yeager: They're not going to be delivered. And we're saying no to so we're having these conversations internally every day. We're having them with prospects and customers every day. No, I said earlier, we're playing a much bigger role. The industry in general is playing a much bigger role than it has ever.

Matt Yeager: I mean, we're sitting down with CHRO and CEOs and business leaders because they continue to ask for our advice and counsel. And again, I think we have to be proud of that and back that up and continue the conversation. But, you know, We're investing in the people we're investing in technology that is only gonna make, you know, contingent labor programs better and have that positive impact for our customers.

Ray Culver: Yeah. And I think, you know, coming from again with my client base and talking so much to the staffing partner side and the supplier side, you know, what I would say is that the suppliers themselves have to MSPs are probably not necessarily going to like that, but they have to start saying of business as well.

Ray Culver: And I say that again, coming from the channel, building the channel, being a channel where I hardly ever said no, because from sales, you hate to say no to business, but I mean, you have to start being like, you know what? This doesn't work for me. And these are the reasons why, you know what I mean? Not just know, but let me tell you why to, where I can hopefully educate.

Ray Culver: You know, you, and we can either come to common ground or that type of thing, but the supplier partner also needs to say no where the business doesn't make sense from a commercial model perspective. And let that kind of get back to the incline, because what I've seen in the industry is, and this has been over the years, but so many suppliers become into the space that a lot of times there is a supplier who will pick up the business.

Ray Culver: And it's like, at some point that kind of has to stop. I mean, at some point we, as an industry, have to come together and say, no, we're not going to do this. You know, I can't survive on a 28% markup and a 3% fee and all these things. So from the supply perspective, similar to what you're saying, I think they have to, we have to stand up and say, this doesn't work for me.

Matt Yeager: Yeah. Right. You know, we did a buyer survey. Well, right at the end of 12, right at the end of 20, right. Have the right, right at the end of 2020 at the beginning of 2021 and of non KellyOCG MSP programs, you know, we got some sampling responses and we heard buyers are underwhelmed. They're confused.

Matt Yeager: They're not getting the level of service. They thought they were going to get it. So to your point, Ray, maybe the industry has to stop doing it to ourselves. And maybe the enterprise organization that bought that as a commercial model and the margins that they did, they've got to recognize that it's, maybe it's not the MSP or the supplier's issue necessarily.

Matt Yeager: They can't offer the services that they truly need. So, To your point, we've done it to ourselves. 

Ray Culver: We have, and it's funny, you know, you let off the call was saying, we won't talk about how long we've been in the industry. And I say the same thing, but again, having been in it for 28 years, I've seen it.

Ray Culver: I mean, like you can point back to times in my career and within the industry where. It's what we do, we've done a tour ourselves. I think we've allowed this kind of, this type of thing to, to push the price down and to keep pushing where all of a sudden it's a model, but it's like, you know what?

Ray Culver: It just doesn't make sense. You know, the different fee structures and the MSP fees and the background checks and just all these things that go into doing business on a daily basis. It's just, it just doesn't make sense. So it'll be interesting to see where that takes. 

Matt Yeager: Yeah, it's interesting.

Matt Yeager: Last year, we launched three managed service programs where we said no first, and then we weren't their choice. So we stayed in as much. Here's why, now, or they wanted us to get to a commercial point where we couldn't, we just would been kicking the can down the road. Right.

Matt Yeager: So, but interestingly, There's more than we said to the no than just these three, but we, they came back what they bought. They soon realized during a quick, quick implementation, well, that's not what we bought. Right? So to your point, we have to be truthful. We have to be proud of what we do and everybody has to in today's talent ecosystem, everybody has to make a fair margin.

Ray Culver: Yeah. So how can our audience, how can the audience here folks, how can they begin to carry this message forward and, you know, kind of affect that change? I mean, like, is it, and we talked about, we talked a lot about this. I kind of put a bow on it. Is it by having conversations with an MSP partner?

Ray Culver: Is it by having conversations with their clients certainly in the program because you want to be respectful of rules of engagement. So I'm not suggesting that, but you know, if you're having a conversation directly with the employer is it all of the above? Like what, how did they start to have these conversations to being with 

Matt Yeager: Have it with the MSP, have it with the client, have it with themselves, having it in organizations like this.

Matt Yeager: I think I said, I've got to be a bit careful because, and I think, right, you stated at the beginning of the session, it is, it's a controversial topic, but I don't know why it is anymore. I mean, I've known for years, it's kind of a controversial topic, but I've gotten to the point. It shouldn't be, you know?

Matt Yeager: And so I think we all can't, I think, know, at conferences like this worldwide conferences like this, it's gotta be the topic and it's gotta be a topic. And you know, I'm going to try to carry the flag high and wave as high as I can. And as far as I can, we, I'm proud. I'll kind of end where I maybe began.

Matt Yeager: I'm really proud of, I know what goes into selling new business, architecting, new business pricing, new business, implementing that business and it's a lot. And I think we need to be proud of that as an industry crazy proud of that. I know how hard it is for suppliers to build sourcing new innovative sourcing plans and work on these difficult requisitions.

Matt Yeager: It doesn't come, you know, without a lot with a labor of love and intensity. And I think the industry in general, we've I think we all can do it. 

Ray Culver: Yeah. And that's, you know, it's interesting, you and I have briefly talked about this and I applaud you and the entire World Staffing Summit Organization for kind of bringing this topic to life.

Ray Culver: So like giving this fireside chat, the opportunity to really have the conversation. But I do think that other industry trade organizations and conferences and things like that, I mean, I think, and I would love to hear your opinion. I think this should be a topic where it's not necessarily, it needs to almost be an educational topic for perhaps the buyers, the buy side.

Ray Culver: You know, it, it just needs to somehow be a topic because it, it needs to, you need to push the envelope a little bit to say, you know, again, if you keep going down this path, All these stakeholders over here, these are the issues that they're having with it. So let's all kind of come together and talk about how do we solve this?

Ray Culver: What are your thoughts on that?

Matt Yeager: I mean, we kind of got it. We've got to get the end customer paying this. And by the way, I think they've got to pay more than they do right now. So controversial. Okay. Be careful, but we all can be doing that. And I think if we're going to continue, we're gonna again, we're gonna have to do it.

Matt Yeager: And what's interesting Ray though, is the higher up within an organization, an enterprise organization. This conversation is taking place. They get it because they're used to traditional outsourcing models that they pay for that they budget. And so we've had the best conversations with the highest levels within an organization.

Matt Yeager: And so I think it's, you I'm not much of a social media right. To be honest, but I did these blogs and they blew up, you know, I was told by our marketing department they're blown up, you know? So there's something in the water. 

Ray Culver: I'm gonna say that speaks to. The fact that it's a timely topic and it is on everyone's mind.

Ray Culver: And whether you're an MSP partner, whether you're a staffing supplier partner, you know, you're feeling it. And you're hearing conversations, you're having to do more with less, you know, these days. And it just can't sustain itself. 

Matt Yeager: Yeah. Not to mention now, what are the vaccination policies? What are the mass policies for these things?

Matt Yeager: So it's a lot. 

Ray Culver: Yeah. So I have a few there, some stuff, some things coming in on the chat, so a few questions and then we'll wrap and and that type of thing, I will say, just kind of tell the audience if you want to connect with. Matt and like to have a more in-depth conversation, LinkedIn connect with him you can find his profile on there. If you want to connect with me again, LinkedIn, we can definitely set up a kind of a deeper conversation and talk about some of these topics and really drill down. One of the questions is just a kind of map. What you're seeing in the market and what's happening.

Ray Culver: Are you seeing programs moving away from the markup model to more of a competitive bid to kind of bring the right market rates for candidates? 

Matt Yeager: Yeah. I think the ones that are running professionally are the ones that are tying to both. It's tough. It's very different. 

Ray Culver: Yeah. Perfect. Let's see.

Ray Culver: Another one. Are you seeing MSP providers supporting sourcing efforts in competitive markets versus adding more suppliers of course you understand what that means, but 

Matt Yeager: Well, does 

Ray Culver: Matt go ahead? 

Matt Yeager: I'm not sure. I'm not sure I understand the question. 

Ray Culver: Right? Yeah. Jimma Crystal if you're still with us drop, drop a note in the chat and we'll kind of pick up on that.

Ray Culver: What are the sourcing efforts? What does that mean compared to adding more suppliers? One of the other ones. So we talked about it, and I think we've touched on this, but I just want to make sure that Kevin has that answer. How is the client paying for it? As far as like, what you're seeing are the conversations bill back to the departments, HR procurement budgets.

Ray Culver: I'm going to step out on a limb here to say, going back to your LinkedIn article, they need to start budgeting better for it, for the different organizations or are budgeting and paying for it. Would you agree with them? 

Matt Yeager: Really fair question, Kevin, if you said Kevin asked the question, I think that's a lot of the work.

Matt Yeager: That's one big challenge that enterprise organizations have. You know, not only how they budget, but who budgets it. Right. So at the end of the day, we're seeing quite a bit go back to the business that is utilizing that talent to deliver the service or produce the goods. 

Ray Culver: Yeah. So that mean when you think about it, I mean, when you, like, when you sit down and do your budget or when, you know, when you do any one to us, that's how you kind of look at it as to say, okay, who's going to be, let's say who's going to utilizing contingent labor or however.

Ray Culver: And that's who should budget for it. You know what I mean? It kind of flows down based upon where the contractors or what have you are tied back to within the BMS and things like that. Yep. That's not a, at least for me, and I'm not a math person, but that doesn't seem like a hard thing. It's just a matter of keeping it and kind of setting that change in motion.

Matt Yeager: I know organizations, budgets, who, who pays for certain things. It's a difficult task in and of itself. Yeah, we've got to conquer that challenge, Ray, for sure. 

Ray Culver: So any closing thoughts? We've kind again, just to recap, we've talked about the current model or at least what's kind of most dominant in the market today.

Ray Culver: We've talked about alternative models. We've talked about some of the things, especially that you're seeing, given that you're living, breaking this every single day, we've talked about how just the audience can help to really effect change having those conversations and that type of thing. So any closing thoughts as we wrap this up?

Matt Yeager: No, we've covered a lot in 45 minutes. To me, I think it's again about the value that we want to create in the industry, how difficult it is for the supply base now to, to procure that talent, to get the right types of talents. We're being asked more and more as an MSP to do more and more.

Matt Yeager: And so for a lot of us to do those, make investments in innovation and some of these other things that we, our commercial model has changed. And I currently think clients have to pay for it. And it has to, we have to show the value in what they're paying for. Right. So value equals benefit minus cost.

Ray Culver: Absolutely. I couldn't agree more. And I think that I said it earlier. And I just think that for all the staffing partners and supplier partners who were still in the session, just make sure that you're having conversations with your MSP partners, make sure. And what I always say is to be successful and healthy, and there is another session later today I'll plug that.

Ray Culver: What does a healthy MSP channel look like? Healthy MSP channel is kind of that three legged stool, supplier, MSP partner and client. If you took away one of those legs, this was going to fall. So it was like everybody needs to be working together. And I think everybody needs to really be. Understanding where everyone else is coming from and kind of, you know, making sure that it's a good situation for everybody.

Ray Culver: So have conversations from your MSP partner, be very partner focused, partner driven and give that feedback. And you know, that helps to support the MSP. Matt and his team would, they're talking to the end client and really given firsthand feedback from the supplies base. Good deal. Well, like I said, you can connect with Matt on LinkedIn.

Ray Culver: You can connect with me on LinkedIn you know, drop us a connection. Or also if there are additional questions, send the question through via LinkedIn. I did put the links for the blog post, as well as the LinkedIn article within the. If for some reason that you can't capture you don't capture it just when you reach out to Matt or myself, let us know.

Ray Culver: We're happy to shoot those over. And you know, for myself, let me know via LinkedIn, what you're seeing in the market, you know, weigh in on this conversation and, you know, it'll be interesting to see what we hear, Sounds good to you. Absolutely. Have a great day.


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Matt Yeager

Ray Culver




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