MSP: What does it cost vs. what do you save?

What are the benefits?

The benefits of an MSP are harder to quantify, but they certainly exist. Consider:

• Time savings
  An MSP takes administrative work out off your hands. No separate contracts, no invoices in 7 Excel files, no endless coordination with suppliers. That saves hours, and time = money. At HeadFirst, process optimization is a core component of our services. With smart automation and integrations, we significantly reduce administrative burdens.
• Cost savings
  Central purchasing results in better rates. You don't overpay, avoid duplicate agreements, and gain insight into margins. Organizations that work with HeadFirst also benefit from benchmarking tools. These help substantiate rates and visualize potential savings.
• Risk reduction
  An MSP monitors laws and regulations, checks contracts and compliance. This prevents errors, fines, and penalties down the line. At HeadFirst, we pay close attention to this with specialized teams and certifications such as ISO 27001, NEN 4400, and B Corp. This ensures that compliance is a core part of our approach.
• Better insight
  You gain control over who works, where, and under what conditions. Data reports provide insight into performance and trends. This helps you make informed and faster decisions. Thanks to tools like PowerBI and our own FMS Striive and VMSProUnity, HeadFirst provides clients with continuous access to up-to-date data on hiring.

A calculation example

Imagine: your organization works with approximately 120 external staff. On average, they each work 1,600 hours per year. All in all, you pay around €17,6 million. Quite a substantial sum, right?

Now you're switching to an MSP. What changes?

• Suppliers charge an average of 5% less, thanks to purchasing power.
• Smarter planning saves 3% on hours.
• On top of that, there's the MSP fee (2.5%) and a platform fee of €0.50 per hour.*

If you add and subtract this, you arrive at approximately €17,16 million. This means you save almost half a million per year. And in the mean time gaining more control and overview.

An MSP fee of 2.5% and a platform fee of €0.50 per hour seem competitive at first glance. Yet, every situation requires careful consideration. Margin pressure is high. Tenders are sometimes even submitted below cost, which impacts quality and innovation.

For this reason, fees must be more than just a competitive rate. Ensure that all components of the service are covered: sourcing, compliance, technology, supplier management, reporting, and further development. Only then will the supply chain remain healthy and future-proof.

*Figures are fictitious.

When does it pay off?

An MSP is especially worthwhile if:

• you work with many suppliers simultaneously.
• you hire temporarily or on a project basis.
• you don't have a central system for contracts or invoicing.
• you want to manage data and performance.

For smaller organizations or those who only hire a few times a year, an MSP is often too heavy. In those cases, it's smarter to start by improving processes or implementing a VMS (Vendor Management System) without an additional link. For larger and internationally operating organizations, such as many HeadFirst clients, an MSP is a strategic partner for achieving control, speed, and growth.

What can you do by yourself?

Before working with an MSP, it's a good idea to first map out your current costs and processes. Ask questions like:

• How many external staff are currently working?
• What do you pay suppliers?
• How much time does it take to place a job?
• How often do errors or disputes arise?

This helps you get a clear picture of where you can achieve gains. This way, you can quickly see whether an MSP is a smart choice, or whether you need to make internal improvements first.

Not everything can be expressed in money.
Some benefits are difficult to quantify. Think of calmer teams, faster onboarding, or less frustration on the work floor due to unclear agreements. These also count.

Digitalization and the professionalization of hiring are no longer a luxury, but a way to remain agile. Especially in a dynamic labor market, every day, every talent, and every process count.

Are you curious about what an MSP like HeadFirst can do for your organization? Feel free to contact us; we're happy to discuss your needs.