Choosing Between an IT Managed Services Provider and a Staffing Agency

A man standing facing a wall with white arrows pointing in opposite directions away from him

Whenever organizations go on the market for service desk, desktop, or infrastructure support, the first question they have to ask themselves is “Are we looking for an IT solution to be managed and delivered by an outsourcing vendor or are we merely looking to add one or two staff members to an internally managed solution already in place?” The answer is often the difference between choosing a managed services provider and a staffing agency, but sometimes the advantages of each are not fully realized until after the decision is made. In most cases, the differentiation only occurs after the talent has been identified and delivered to the client.

The primary function of a staffing agency is to identify resources and place them on site to be managed by the client. Apart from the monthly invoice and the occasional check-in, there is little interaction with client management teams after placement. With a managed services provider, the IT support dialogue is ongoing. Whether they’re overseeing performance, making new technology recommendations or responding to an additional support or project request, the communication is as proactive as it is collaborative.

Technical Recruiting

Staffing agencies are extremely effective at staff augmentation. They have a seemingly endless database of talent at their fingertips and often a well-defined recruiting and vetting process; however, unless they specialize in technical recruiting, the verification of purported skills may not be as thorough as one conducted by an organization with probing interview questions that separate the experienced professionals from the bluffers. Did the technician perform Wi-Fi setup or simply re-enable connectivity?  Did the technician deploy server patches or defer those tasks to someone else on the team? What tools were used and how? Candidates may talk a good game, but IT professionals with first-hand industry knowledge tend to ask more probing questions during an interview and expose superficial knowledge. Without them, trivial knowledge of every application and operating system used to embellish a resume may pass unchallenged. Unless there is a thorough validation of experience, clients risk either relevant tasks being deferred back to their internal IT groups or time wasted in micromanaging a novice.

Cost Analysis: Direct Hire or Third Party Management

For positions filled on a temp to perm basis, staffing agencies typically waive the conversion fee for a client to hire directly after a certain number of billable days or hours. Consequently, they stand to gain in revenue each time they reassign temps to another client effectively rebooting the billing cycle. Nonetheless, this is an ideal arrangement for any client wishing to hire and self-manage the employees after a trial period.  As with any employment relationship, the added personnel then become the client’s responsibility in terms of salary, benefits, career pathing as well as all risks associated with off-boarding and unemployment due to dips in revenue, workload, or poor performance over the long term.  On the other hand, outsourcing to a managed services provider makes more sense for clients who wish to defer that responsibility or don’t wish to expend IT management resources required for a 100% internal solution.

Price per Service or Per Person?

From a pricing standpoint, the advantage of using a managed services provider is the option of paying for the service versus the individual. In a “shared staffing model,” for example, remote Level 1 and Level 2 services can be delivered by a team of IT professionals and priced per incident which, depending on contact volume, can be much more cost effective as opposed to paying a flat monthly rate for the equivalent in dedicated resources. In terms of value, access to the whole shared team is greater than the sum of a dedicated team’s parts. While costs are more predictable when assessed at a flat rate per individual, if contact volumes and workloads fluctuate, those resources may waver between being underutilized (overpaid) and shorthanded (overwhelmed).

Time Tested Resources, Proven Talent

For clients that need a remote service desk solution, chances are the managed services provider is scalable enough to assign veteran staff to their account. So that means support is delivered by proven agents with a track record of relevant Level 1 skills, inherent longevity, and maintain knowledge continuity with emerging technologies (application versions, O/S, latest tools, etc.) as opposed to the leap of faith in bringing on a new hire. Even for on-site desktop support roles, MSPs tend to place veterans, because Level 1 agents eventually cross train with their Level 2 counterparts and pick up those additional skills over time like an IT farm system.

Training, Retention, Career Development

Considering the thousands of resumes stored in their database, even the largest staffing agencies can rarely afford to offer long-term career pathing or technical and soft skills training programs to everyone on their radar. So staffing resource expertise is more frequently limited to the incidental or based on knowledge amassed from job to job.  Unless individuals have made their own personal investment in continuing education or pursued industry related certifications, what they bring to the next role is often where they left off at the last temporary assignment.  With a managed services provider, the approach to employee development and long-term retention is consistent with the name itself.  Apart from delivering the contracted scope of services on an ongoing basis, a managed solution includes vendor guidance, oversight, and frequent training sessions that bolster individual skills that amount to improved service for the client which only gets better over time.