Why you need Managed Service Provider (MSP)
If your contractor hiring feels messy, expensive or risky, you’re not alone.
Many organisations are juggling:
Multiple agencies and suppliers
Rising contractor day rates
Confusion around IR35 and other regulations
Poor visibility of who’s working where, on what and at what cost
As contingent workforces grow, ad hoc processes that once “just about worked” start to creak. That’s where a Managed Service Provider (MSP) comes in.
What is an MSP in recruitment?
In recruitment, an MSP is a specialist partner that manages your entire contractor and contingent workforce on your behalf.
Instead of each hiring manager doing their own thing, your MSP:
Centralises all contractor hiring under one model
Manages agencies and recruitment suppliers
Oversees onboarding, vetting, IR35 and compliance
Provides real-time data on headcount, rates, spend and performance
With Vermelo’s MSP solution, that means smarter contingent workforce management for cost control, compliance and growth.
Why traditional contractor hiring isn’t working anymore
Left unmanaged, contractor hiring typically looks like this:
Rising costs – inconsistent rates, no benchmarks and hidden fees across multiple suppliers
Fragmented processes – different workflows, SLAs and standards for each agency
IR35 and compliance risk – inconsistent assessments, documentation gaps and audit exposure
Poor visibility – no single view of who’s on site, what they cost or how they’re performing
Inconsistent onboarding and candidate experience – which affects speed, quality and retention
Add IR35 into the mix and the stakes climb even higher. Misclassification can lead to financial penalties, HMRC scrutiny and damaged contractor relationships.
An MSP tackles all of this head-on.
What an MSP actually does for you
A good MSP doesn’t just “handle contractors”. It gives you structure, control and data across your entire contingent workforce.
With a partner like Vermelo, that includes:
Supplier consolidation
One accountable partner managing agencies, payrollers and other vendors – reducing duplication, improving negotiation power and cutting cost.End-to-end process ownership
From requisition and sourcing through to onboarding, payroll and offboarding, everyone follows the same, optimised process.Built-in IR35 and regulatory compliance
Standardised documentation, status determinations and audit-ready trails for IR35, FCA, right-to-work and employment law.Consistent vetting and screening
Background checks, right-to-work and screening embedded from day one, not bolted on at the end.Actionable data and MI
Dashboards and reporting on headcount, spend, time-to-fill, supplier performance and diversity – so you can make better decisions.
The benefits of moving to an MSP model
1. Cost control and savings
By standardising rates, consolidating invoicing and reducing agency dependency, an MSP helps you bring contractor spend under control.
You gain:
Clear benchmarks for day rates
Visibility of where money is going
Opportunities to rationalise suppliers and negotiate better terms
2. Reduced IR35 and compliance risk
With IR35 liability now sitting firmly with the engager, guessing isn’t an option.
An MSP gives you:
Standardised IR35 assessments and documentation
Built-in compliance frameworks and audit trails
Confidence you’re meeting HMRC and regulatory expectations
3. Faster access to contractor talent
Because processes, suppliers and approvals are already in place, you can:
Spin up project teams quickly
Fill gaps without long delays
Access niche skills through a curated contractor network
That means less downtime, fewer delayed projects and happier hiring managers.
4. Total workforce visibility
With all contingent workers in one system, you finally get answers to questions like:
How many contractors do we have, and where are they?
What are we spending – by project, team or location?
Which suppliers are performing, and which aren’t?
This visibility turns contractor hiring from a black box into a strategic lever.
5. Better experience for managers and contractors
Hiring managers get one simple route for contractor hiring, instead of navigating a maze of suppliers and processes. Contractors get consistent onboarding, communication and support – which reflects well on your brand and improves retention.
When an MSP is the right solution
An MSP is worth serious consideration if you:
Spend heavily on contractors or contingent workers
Are worried about IR35 or wider compliance risk
Need to scale contractor hiring quickly for projects or growth
Want full cost visibility and less agency dependency
Need real-time MI on contingent performance and spend
If even one of these resonates, managing everything in-house or via fragmented agencies is likely holding you back.
Download the “Why you need a MSP” Fact Sheet
Let’s talk contingent talent
Book a 15‑minute discovery call or contact Santa Benga - santa.benga@VermeloRPO.com | 07304 094171