Published : March 4th 2025

Common Challenges When Setting Up an MSP and How to Overcome Them 

Finding the right balance of full-time employees and temporary staff is a key strategic goal for many organizations facing rising demands and growing compliance pressures. As the need for specialized skills intensifies, companies are increasingly turning to Managed Service Provider (MSP) models to streamline their contingent workforce strategies. An MSP can reshape how an organization oversees contingent workers, eliminating inefficiencies and introducing consistent practices across departments.

For many first-generation MSP adopters, the shift moves away from ad-hoc or disconnected staffing methods toward a more structured, technology-driven model. This approach centralizes billing, ensures smoother compliance, and standardizes vendor management, cutting down on hidden fees and resource-heavy processes.

MSP adoption challenges inevitably arise, particularly for those unaccustomed to a managed service framework. Integrating new systems, training employees, and navigating cultural pushback each demand careful attention. This article examines the most common roadblocks—service integration, employee onboarding, and organizational resistance—and offers clear, actionable solutions. The aim is to present a straightforward, independent guide that organizations can use to make setting up an MSP as seamless and effective as possible.

The Value of an MSP for First-Gen Adopters

An MSP handles vendor relationships, streamlines billing, enforces compliance standards, and monitors performance metrics. For companies accustomed to juggling multiple suppliers, disconnected invoices, and minimal workforce data, this unified approach often comes as a welcome relief. Fragmented systems can breed hidden fees and overlooked inefficiencies, especially when operations expand to new regions or deal with seasonal hiring demands. 

One study found that 65% of global leaders plan to expand their use of contingent workers in the next two years, and 80% already employ non-permanent staff in some capacity. Yet 70% admit they struggle to integrate these workers effectively, and 44% cite difficulties in finding contingent talent with the specific skills they need.

Centralizing these elements under one umbrella removes guesswork and shortens cumbersome workflows. With real-time dashboards, standardized invoicing, and clear metrics, leadership gains the transparency needed to allocate resources effectively. This becomes especially pivotal for teams that have outgrown manual processes, where each new hire or location amplifies administrative strain. An MSP does more than tidy up invoicing; it brings sharper oversight, reduced compliance risk, and the flexibility essential for those evolving beyond traditional staffing methods.

Common Challenge #1: Service Integration

Service integration involves bringing billing, scheduling, and compliance under one cohesive system. While this sounds straightforward, pre-existing platforms or departmental silos can block effective data sharing. In organizations with multiple regional or specialized teams, merging everything into a single MSP framework quickly becomes a test of alignment and adaptability.

1. A thorough tech audit should come first, pinpointing compatibility gaps or areas where data may need to be remapped.
2. It also helps to pilot the MSP rollout in a smaller department, refining integration steps and uncovering hidden pitfalls before a full-scale launch.
3. Clear, ongoing communication among IT, HR, procurement, and finance keeps everyone aligned and prevents bottlenecks.
4. Thoughtful, phased implementation ensures that setting up an MSP feels less like a jolt and more like a natural evolution for the entire company.
   

Common Challenge #2: Employee Training and Adoption

An MSP changes day-to-day processes, influencing everything from requisition approvals to timekeeping. Hiring managers and HR teams may have to learn new software and adapt to guidelines they’ve never encountered before. If training is overlooked, employees risk misusing tools or dismissing the system altogether, stalling any potential gains.

Time constraints often stand in the way—staff may see workshops and manuals as an extra burden. Confusion about shifting responsibilities can also cause friction, since the MSP framework might redistribute tasks among departments.

• To overcome these barriers, organizations should roll out concise, role-specific training modules and maintain open support channels like help desks or Q&A sessions.
• Encouraging users to share feedback helps refine approaches and keeps everyone engaged, ensuring MSP best practices become part of the team’s routine rather than a disruptive afterthought.

Common Challenge #3: Resistance to Change

Some departments or suppliers may worry they’ll lose independence or be saddled with extra bureaucracy under an MSP framework. Doubt or mistrust can surface when individuals feel uninformed about how a new system might alter their roles or daily routines, and these concerns can stall progress before the model has a chance to prove itself.

A few underlying factors typically drive such resistance. Change fatigue, job insecurity, and a lack of clear communication often leave teams feeling defensive.

• Involving key stakeholders from the beginning and keeping them updated tends to ease pushback.
• Transparency around MSP goals and the potential for efficiency and MSP cost savings helps everyone see the bigger picture.
• Phasing in the system step by step, then spotlighting early successes—like shorter hiring cycles—builds momentum and reassures skeptics that setting up an MSP is a strategic improvement rather than a disruptive hurdle.

Addressing Cost Concerns

Fees for MSP services may look like an extra expense, especially when budgets are already tight. Yet many legacy staffing models hide untracked supplier markups or compliance-related penalties that can eat into profits. Establishing baseline metrics—like time-to-fill, cost-per-hire, and turnover—before setting up an MSP clarifies how much improvement the organization actually gains over time. Tracking these figures confirms that MSP fees typically pale in comparison to total savings achieved through rate standardization, reduced legal risks, and data-driven decision-making. First-generation MSP adopters often find that the long-term advantages include fewer staffing headaches and more bandwidth for strategic initiatives. Taking a multi-year view of these gains paints a clearer picture of how an MSP contributes to a healthier bottom line.

Industry research indicates that partnering with a Managed Service Provider can reduce overall IT costs by 20–30%, boost productivity by 15–25% through enhanced efficiency and minimized downtime, and diminish the risk of cyberattacks by up to 50%.

Why Workspend Is an Ideal Partner

Workspend delivers end-to-end MSP services, starting with readiness assessments and continuing through post-launch optimization. Our consultative approach maps existing processes into an MSP framework that respects each client’s operational nuances, minimizing disruption. Backed by a proven implementation model and data-driven tools, we steer first-generation MSP adopters through MSP best practices and tailored project milestones, reducing the risk of integration missteps. This comprehensive method highlights potential bottlenecks before they escalate, paving the way for smoother adoption and measurable progress.

Our global footprint means MSP programs align with local rules and cultural considerations, an advantage for businesses eyeing expansions or reorganizations. Partnering with a seasoned provider simplifies the journey, enhancing ROI and ensuring the shift to managed contingent services stays on track.

Overcoming Common Pitfalls

Overlooking compliance can leave organizations exposed to fines or lawsuits, especially if worker classifications or local labor statutes go unmonitored. A well-structured MSP accounts for these regulatory demands through clear guidelines and systematic checks, mitigating legal and financial risks.

Underestimating stakeholder engagement is another frequent stumbling block—departments may remain siloed unless leadership fosters open communication at every level, from executives to frontline staff. Effective governance often involves regular check-ins, performance reviews, and supplier feedback loops. Avoiding a “set it and forget it” mindset is also essential. An MSP model needs periodic evaluations, supplier scorecards, and refinements to adapt to market shifts, ensuring it remains a dynamic and efficient solution over time.

Conclusion

Service integration, employee training, cultural resistance, and managing upfront costs often seem like formidable obstacles for first-generation MSP adopters. Yet these MSP adoption challenges are entirely surmountable with the right planning and phased execution. Thorough audits, targeted training, open communication, and clear ROI metrics each play a critical role in smoothing the transition.

Before setting up an MSP, companies should evaluate their technology, budget, and openness to new processes. Running a pilot program or consulting an experienced MSP partner can help preempt unwelcome surprises. A well-designed MSP framework centralizes contingent workforce management, delivering sharper transparency, agility, and cost-effectiveness—a strategic advantage for businesses determined to operate lean, remain flexible, and outpace the competition.