The Financial Benefits of Change

Change is not just a journey of overcoming obstacles; it is a pathway to unlocking untapped potential and discovering new horizons. Embracing change opens doors to innovation, efficiency and growth. It is an opportunity to reassess old habits, improve processes and adopt cutting-edge technologies that can propel an organisation forward. 

By welcoming change, companies can revitalise their workforce, foster creativity and enhance their competitive edge. The energy and resources invested in change are often outweighed by the significant advantages gained. These advantages include streamlined operations, cost reductions and improved service delivery, which can lead to higher customer satisfaction and increased profitability. 

 

The Known Costs of Change

Whether you’re launching your company’s first centralised contingent workforce management programme – or moving from an incumbent managed service provider (MSP) solution to a new provider, the changeover period offers an opportunity for growth and improvement. Whilst the benefits of making this change may be clear and agreed upon, it is important to recognise the potential investments involved during the initial process. 

Financial Costs

When moving from a current MSP provider to a new provider, there may be investments associated with the transition. For example, there could be expenses related to data migration, system integration, and staff training on new processes and tools. Further, there could be fees associated with the implementation. Some MSPs charge an initial set-up fee to cover the costs of implementing their services, which can include configuring software, establishing workflows and onboarding the client's team. And, of course, there will be the cost of the MSP service, which, depending on contract terms, could be a total contract value, a fixed fee per worker or a hybrid of the two approaches.  

Time Costs

While financial investments in change tend to get a lot of attention, often it is the time and mental energy invested that can be a concern—such as potential disruptions to operations during the transition period, the learning curve associated with new systems and any temporary decrease in productivity. However, addressing these aspects with a thorough change management strategy can lead to a smoother transition. In a landscape where change seems to be accelerating, embracing transformation initiatives with a positive outlook can help overcome change fatigue and ensure successful outcomes. 

The Cost Savings in Change

While there are upfront costs to any change, a well-managed transition can lead to long-term savings through improved efficiency, better compliance and optimised workforce management. 

Here are a few key benefits to partnering with an MSP and how the change benefits not only an organisation’s efficiency but also its bottom line: 
 

Switching MSP Saves Tech Leader $9M Savings in First Year 

Centralising the management of your contingent workforce through an MSP ensures consistency and equity within your extended workforce. In contrast, decentralisation – where individuals manage their own processes – can lead to inconsistent experiences for candidates and hiring managers, compliance issues and often unanticipated costs. 

Without visibility into its large contingent workforce, a global tech leader used inconsistent and costly buying practices. When they switched from their incumbent MSP to AGS, we focused on reestablishing trust while simultaneously driving changes that yielded quick results, including improvements to compliance and fostering a more competitive sourcing environment. In less than a year of the programme mandate, we reduced average bill rates from 123% to 92% of the maximum bill rate, leading to $9 million USD in savings. More competitive buying practices led to a further $2 million USD in cost savings through renegotiations. 

Innovative Training Programme Increases Temp-to-Perm Conversions at No Cost 

Using an MSP can help you anticipate future skill needs and technological developments—helping you stay competitive in a changing market. Skills-based recruitment is increasingly seen as an ongoing evolution towards a workforce that is inclusive, equitable and adaptable. Working with experienced workforce solutions experts can assist you in monitoring strategies to develop a workforce prepared for the future. 

AGS helped a media company implement a hire-train-deploy (HTD) model, which established specific supplier development pathways aimed at recruiting early-in-career talent. Under the programme, HTD suppliers identify high-potential talent, train them for approximately 12 weeks in relevant industry curricula and deploy them into a contingent role in the client organisation for 12-24 months. After the agreed deployment period, the client has the option to convert the worker to a permanent staff member with no fee.

Compliance Avoids Financial in Fines 

Employment regulations are growing more complex globally. Non-compliance can result in fines, legal fees and reputational damage. MSP providers ensure compliance with hiring laws such as GDPR, equality regulations and labour laws across jurisdictions. Further, MSP programmes offer expertise in privacy, worker classification and employment law—helping you stay ahead of changing demands. 

Labour Market Analytics, Process and Tech Improvements Deliver AU$69M in Savings  

Partnering with an MSP provider can increase your understanding of the competitive marketplace, which can help you make data-driven decisions through benchmarking to compare performance against other companies in your industry in similar locations and/or by company size.  

Over the course of our partnership with a state government in Australia, AGS has driven more than AU$69 million in savings through success in capturing and analysing data and advising the client on a myriad of workforce strategies.   

Change Management Best Practices 

Once you’ve convinced stakeholders that the ‘cost’ of change is worth it – and in most cases a cost-saving venture – you’re left with the challenge of implementing the change. So, let’s explore how to make change easier. Here are a few recommendations on essential dos and don’ts to keep in mind: 

• Identify your key stakeholder groups. Start with identifying the client’s leadership, hiring managers and supplier community. This is also helpful in recognising potential advocates for change early on in the process. 

• Encourage top-down communications. Communication is essential, but this shouldn't just be focused on those in your stakeholder groups. It's important to think about the other levels within your organisation, such as the accounts payable team, who, even though impacted lightly, will still need to know about the change. 

• Think about additional methods of communication. Create opportunities to have hands-on, forward-thinking change management strategies that go further than just email communications, such as informational sessions sponsored by the client or video messaging. 

• Insist on a supplier kick-off meeting. It’s imperative to introduce suppliers to the new MSP and discuss the enrollment requirements for suppliers—explaining how they differ from those of the incumbent solution. 

• Promote broad communication. Some clients only want to inform their divisions that are currently using contingent workers about the transition. However, this approach doesn’t consider those who may need contingent staff in the near future.  Communicating to all potentially impacted parties is vital to ensure clarity and efficiency. 

• Welcome feedback (especially from resistors). Embrace the opportunity to hear resistors' hesitations about the change. By listening to their concerns, you can address them effectively and provide reassurance—turning potential obstacles into support. 
   

How Does AGS Manage Change?

To make the transition from an incumbent to an AGS MSP as smooth as possible, here are three key areas to our approach to change management: 

1. A global approach with local customisation. As we operate globally, we adapt our change management to different regional and local nuances and cultures depending on the client's unique needs. Customisation of our change management is driven by the client and their proven methods for internal communication. Although the culture and language may change from country to country, our methodology remains the same around the world.
2. An entire 'village' of support. Just as it takes a village to raise a child, successfully implementing a new MSP solution requires a collaborative effort. AGS brings together a highly-skilled team with the support and capabilities needed to achieve this. We typically have seven to eight people involved, including a market analyst expert, solutions architect and business analyst. Each is responsible for a different part of the process, helping to make the transition seamless from start to finish.  
3. A dedicated change manager. We also make sure there is a dedicated change manager assigned to oversee every MSP transition that we handle. Many providers have a project manager and analyst managing the process. However,  by appointing an individual dedicated to change management, they can oversee the entire transition, ensuring it runs seamlessly.  

Conclusion

The transition to an AGS MSP is meticulously managed through a global and customised approach that respects regional variations, a collaborative team effort involving specialized experts and the strategic oversight of a dedicated change manager. These elements work together to ensure a smooth and efficient change management process tailored to each client's needs.