MSP – Coming to a Levy Paying Client near you

I’m not steeped in the history of HR procurement through Managed Service Providers (MSP) arrangements and contracts, but it has been a well established vehicle for procurement and delivered a consistent operation across the HR space over many years.

I have said for the past two years, even before the levy was introduced that the future of this market will be part of the creation of lead provider relationships or MSPs.

Why? Because it will deliver an improved offer for employers and clients, particularly those of size, and will drive a more strategic approach to both procurement of levy services and improved consistency of delivery.

At 3aaa, we have been driving this message forward. We are delighted that already we have been awarded contracts by many organisations to deliver this MSP solution for them. It is however, only the start and we expect to see an explosion of activity in this space over the next 12 – 24 months.

For the Public Sector, faced with cost reduction and headcount squeeze – it provides a cost effective solution, far better quality of service provision and removes the endless tenders for one Apprentice here and one there – who knows what the hidden cost of procurement is for levy provision at the current time!

Many public sector organisations are currently awarding contracts with little real strategic rationale for how Apprenticeships can be strategic in nature and support overall talent development. A MSP arrangement provides such a strategic approach, inputs valuable additional resources to support L&D and will result in improved value for money – particularly through better economic and effectiveness.

Much has been said about the lack of apparent negotiation of pricing for Apprenticeships under the levy. Whilst that is not common in our experience, with many employers, both corporate and public sector taking the opportunity to negotiate hard, sometimes at the expense of the evaluation of quality – an MSP provides a co-ordinated and effective way of optimising pricing. But remember price negotiation can really only take place where there is a joined up approach, bringing together cohorts of learners where the economies of scale and indeed improved quality can occur.

In the Corporate World, MSP arrangements are common place and have been for many years. It is a mature market, the principles of which equally apply to the levy. Even in the largest organisations, the L&D departments are characterised by the scarcity of resource – a major reason we have over £1bn of underspend in the first year of the levy.

Organisations are battling to understand this new world, its jargon and its often weird practices – and believe me, with even 20 years of experience, it is sometimes difficult to keep up. MSP is the answer to this problem – injecting strategic resource to co-ordinate efforts, create a common platform and brand and to align activity and gain economic advantage.

As we approach that critical phase where you will be able to do nothing to prevent the return of funds to the Government next May, irrespective of the volumes of Apprentices you enrol now, it is worthwhile to think about how a MSP can deliver benefits for you as an employer.

The ESFA announced over 6 months ago the development of a ‘Trusted Advisor’ Status for providers, that seems to have vanished now but the concept is a sound one – because it is the training providers who bring significant knowledge and experience to the table – use it to your benefit through the procurement of an MSP – you will reap the benefits!

Peter Marples, Group Chief Operating Officer, 3aaa Apprenticeships