What to Know about Implementing an MSP in the Asia-Pacific

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In this interview, Cheron Fan, Global Program Engagement Lead at ManpowerGroup Solutions’ TAPFIN, discusses her observation of implementing an MSP program in multiple countries within the Asia Pacific region.

1. What are some difficulties in expanding global programs from the mature markets such as the United States into the Asia-Pacific?

Cheron: Global program sponsors need to understand the gaps in business practices and regulatory environments between the United States and countries within the Asia-Pacific region. As most MSP programs are US-centric programs, it is not as simple as taking a program from the US and placing it within the Asia Pacific. There are deviations that require thorough due diligence before finalizing the solution models. An example is the pay and invoice cycle. Workers in many Western countries are paid on a weekly basis. In the Asia Pacific, most workers receive monthly pay, with suppliers also invoicing monthly. Bill rate is not always a straight range of fees, but a cost-plus model with a mark-up percentage built on staff costs which include base pay, overtime, leave entitlement, and various additional kinds of allowances or bonuses. These components must be accounted for in building up the rate structures and they could be different between professional roles and manual laborers. Apart from this, except in Australia, most markets in which multinationals are interested in expanding do not have extensive experience in MSP adoption. This means there is an additional change management process that must be accounted for when adopting MSP programs in the Asia-Pacific region.

2. You mention that program expansion in the Asia-Pacific is usually a result of programs expanding from the United States, can you explain how local employers and suppliers have responded to this development?

Cheron: Yes, most program expansion in the Asia-Pacific is a result of global programs within the United States extending to the region though we had also worked on initiatives originated from EMEA as well. I have observed that the instances of MSP adoption have been increasing in past years. MSPs are not as strange or as rare as compared to a few years ago, and employers and suppliers in the region will not feel shocked by the prospect of an MSP like they would have just a few years ago. Additionally, more and more articles are available on the topic of contingent workforce management in this region.

3. What should employers expect when implementing an MSP in the Asia-Pacific?

Cheron: Global program sponsors shall expect more time to be required in articulating the drivers for a MSP with key stakeholders in Asia Pacific. Often stakeholders in the Asia-Pacific do not easily perceive the value of an MSP. This is not because they don’t understand the overall value of MSP programs globally, but often because they feel it is an apple to orange comparison when implementing a program with same objectives in two different geographies. For instance, the impact on driving cost savings could be less obvious in their countries than in North America in the short term. It’s important for global program owners working with MSPs and local stakeholders to understand first the workforce challenges and issues faced by the Asia-Pacific operation. Countries like China, Malaysia, India, Japan, Singapore and so forth often take different strategies and tactics than these program owners are traditionally used to seeing within the mature markets.

My advice would be to not promote MSPs in the Asia-Pacific region simply with the banner of global mandate, but to also identify the pain points that HR, hiring managers, and suppliers have within each country and industry. For example, companies who do not have consistent performance measurement standards for suppliers expose the organization to quality risk and compliance risk, which in turn may end up costing the organization more in the long-term through legal fees as well as increases in time-to-fill, attrition, and time-to-market.

4. Is there anything else employers should expect?

Cheron: Yes, it’s important for organizations to understand that the economic and social environment is different in and among Asian-Pacific countries and regions, and often these cultural differences are underemphasized by those looking to expand globally. For example, there are suppliers in China, Taiwan, and India who delivered their services with very thin margin in order to secure a larger volume of business with a company. Taxing these suppliers with the MSP program administration fee to keep the client cost neutral ultimately pushes these suppliers out of the MSP program. It also may mean resistance to change when hiring managers worry about business continuity. The level of adoption and perception of MSP solutions by the local market is another dimension to signify a different game plan may be required for these countries.

The core part of the engagement process is to get buy-in through communication and business cases. While no one would question English as an essential medium of communication in the workplace, in countries whose population does not speak English as its first language, English is not the only language in which business is conducted. Ensuring you have multilingual representatives who are able to communicate among the local suppliers and the global counterpart as well as across project teams could iron out a lot of unnecessary misunderstanding along the pre-implementation and execution process. It would be a key component in driving short- and long-term success of the MSP expansion in this region.

Overall, implementing an MSP in the Asia-Pacific region is a journey that the buyer, MSP, and suppliers must go through and learn together, and I have found it is best to approach it with an understanding that this journey will take time.

5. Are there any difficulties in working with VMS systems in the Asia-Pacific Region?

Cheron: Localizing the system to APAC-specific regulatory requirements is still an on-going challenge for VMS providers. Establishing proper rate structure, time/expense capture and invoicing functionalities are the areas that we see making progress but still have a way to go. China, for instance, includes a long list of statutory pay components for the contingent workers. Some of these pay items are mandatory at the country level while others could be varied by city and by role of the contingent workers. The frequency of payment is also different depending on the pay items that we refer to. If we were unable to configure the related VMS modules right, it will create many post-launch issues and result in compliance risk. Japan is another good example. We understand that companies there are using VMS tools mainly for requisition and assignment management. The rest of the components, after the contingent worker begins working, like time capture, expense claims, invoicing management, etc., are often managed manually by the onsite service delivery team or supported by separate local systems. There are not many VMS tools available that fully turn on the procure-to-pay functionalities. Owing to the constraints imposed by the local legislations, in some occasions there are not many options available but to let some traditionally VMS-enabled activities be managed outside the tool. While there are certainly some providers that are able to set up these additional requirements, it doesn’t necessarily mean that the fully localized VMS tools are widely available in the market.

Language is another consideration in deploying VMS tools. While VMS tools are often set up in multiple languages, it’s not an issue with which languages the VMS tool can support, but instead about what languages the VMS providers can speak in the region. If VMS providers could invest with more local language resources or multi-lingual persons, they can quickly and efficiently understand the business and legislative requirements, streamline the due diligence process with the stakeholders involved and speed up implementation.

Cheron Fan, Global Program Engagement Lead at ManpowerGroup Solutions’ TAPFIN, joined the TAPFIN team in April 2013 after 8 years within the ManpowerGroup organization. She has worked throughout Asia-Pacific in many roles, with her former engagement as Solutions Architect of Global sales, and her current role under the Global Process Excellence of TAPFIN.