The Benefits of Resource Tracking for Contingent Workers Outside the MSP Program - nextSource

Many organizations utilize a Managed Services Program (MSP) to centralize and optimize the management of their contingent workforce. As your MSP, nextSource oversees various aspects such as workforce planning, recruitment, onboarding, compliance, invoicing, and offboarding for contingent talent. However, you may find that not every worker you engage fits neatly into the MSP framework. Certain worker categories are often managed outside the traditional MSP structure. While these workers may not be compensated or managed through the MSP, tracking their engagement still offers significant benefits.

Why Some Workers Fall Outside the MSP

There are several reasons why contingent workers operate outside the oversight of Managed Service Providers (MSPs). In some cases, their funding sources mandate different administrative processes. In other instances, departments may prefer to contract directly for specialized expertise.

For example, a university might engage graduate research assistants funded by a federal grant. Their stipends would be managed through the university’s financial aid or grants office rather than through the MSP. Similarly, a business might hire an independent cybersecurity consultant directly and pay invoices through departmental budgets instead of using the MSP’s vendor management system.

Resource tracking is particularly useful during an acquisition transition. When a nextSource client acquired a mid-sized competitor, they unexpectedly inherited hundreds of contingent workers. Since these workers were engaged under various contracts and were not part of the acquirer’s MSP program, a resource tracking solution was implemented to centralize information on all inherited workers. This included details about who they were, what tasks they were performing, what systems they were accessing, and the duration of their contracts. This oversight facilitated a smooth integration, ensured compliance with corporate policies, and prevented duplicate or unnecessary contracts.

The Benefits of Tracking “Out-of-Program” Workers

Even when workers are not managed by the Managed Service Provider (MSP), tracking them offers significant advantages:

• Visibility and Risk Management: Knowing who is working where helps reduce risks associated with system access, data security, and intellectual property. For instance, a research assistant in a lab may have access to sensitive information. Without proper tracking, the university might not know when the assistant’s engagement ends or if their lab access was revoked. Similarly, a consultant supporting a product launch could retain access to systems after their engagement concludes, creating potential security gaps.
• Financial Oversight: Workers not within the program still incur costs. Tracking ensures leaders have visibility into the total workforce expenditure. Even though grant-funded postdocs are not billed through the MSP, their costs must be included in the university’s reporting to ensure proper fund usage. Additionally, if a marketing department hires freelancers directly for an event without tracking, the total project spending can escalate unnoticed.
• Compliance and Audit Readiness: Many industries require thorough reporting on workforce participation. Federal grants often necessitate detailed records of individuals who worked on funded projects. Proper tracking enables the university to meet these reporting and audit requirements. Public companies, in particular, may face audit inquiries regarding external spending or worker classification, and resource tracking reports help ensure compliance.
• Workforce Planning: Collecting data on all contributors allows for smarter workforce decisions. University administrators can identify whether multiple departments are funding overlapping research assistants, promoting more efficient resource allocation. Business leaders can also determine if there is over-reliance on specialized consultants and assess the feasibility of building that expertise in-house.

Conclusion

Although not all contingent workers are included in a Managed Services Provider’s (MSP) scope, overlooking them can lead to significant gaps in oversight. By tracking resources that fall outside of established programs, organizations can maintain visibility, ensure compliance, manage costs effectively, and enhance workforce planning. In today’s environment, where contingent labor is vital to both business and academic success, comprehensive resource tracking is essential—not just a best practice.

Contact nextSource today to discover how our Resource Tracking services can benefit your business.