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The Procurement Guide to MSP Cost Models

Why your MSP cost model matters A Managed Service Programme (MSP) can transform how you manage your contingent workforce, but only if you get the commercials right. An accurate MSP cost model is the foundation of any successful MSP procurement; it helps you compare bids on a like-for-like basis, build a credible business case for your executive board, and avoid unexpected costs once the contract begins. Yet, many procurement teams still find cost modelling a sticking point. Data gaps, inconsistent supplier quotes, and unclear pricing structures can quickly derail your evaluation process. As a leading MSP solution provider for critical infrastructure businesses, we’ve supported procurement teams from leading nuclear organisations to nationwide utilities providers with their MSP pricing models. Our deep domain experience means we can balance regulatory compliance, operational resilience, and cost efficiency, helping you get work done without compromising. We’ve created this guide to break down how to create a clear and commercially sound MSP cost model that enables effective comparisons of potential suppliers so you can make decisions with confidence and ensure contingent workforce cost savings. Things to consider with MSP Cost Models How much does an MSP in recruitment typically cost? How much money can you save with a managed service programme? How to compare managed service provider cost models Final checklist for your procurement cost-saving strategies Book a cost-model review session How much does an MSP in recruitment typically cost? The MSP pricing models will vary depending on scope, workforce size, sector, and delivery model. MSP providers will usually charge through one of three pricing models: Management fee: a percentage of total spend under management (often 1–3% of contingent workforce spend) Supplier-funded model: the MSP is funded via a small margin agreed with the agency, meaning no direct fee for the client Hybrid pricing models: a blend of client fees and supplier contributions, particularly where niche or high-demand skills are involved What’s an MSP margin? In recruitment, an MSP margin is the percentage added by a Managed Service Provider (MSP) on top of a contractor’s pay rate. It covers the MSP’s management costs and profit for overseeing the contingent workforce. For example: If a contractor earns £400 per day and the MSP charges a 15% margin, the client pays £460 per day. That £60 difference is the MSP’s margin. MSP delivery model Delivery models will also directly influence cost and supplier relationships: Master Vendor: the MSP supplies most workers directly, reducing costs but limiting supplier variety Neutral Vendor: the MSP manages a wide network of agencies, ensuring breadth of choice but often at higher supplier margins Hybrid Delivery: a tailored mix of direct fulfilment and agency supply, balancing cost efficiency with niche expertise For a deeper dive into these models and why they matter, check out our full breakdown of MSP delivery models. How much money can you save with a managed service programme? Depending on how mature their current model is, UK companies that use a recruitment MSP typically save 10–20% in the first year. Most of the time, these savings come from: Lower agency margins through managing suppliers in one place Clear reporting making it easier to see and control costs Lower risk of compliance and IR35, which means no expensive fines Better operations because of standardised processes and quicker hiring How to compare managed service provider cost models With these ten steps, you’ll be able to compare MSP costs and evaluate bids on a like-for-like basis, giving you full visibility of potential contingent workforce cost savings. 1. Start with accurate baseline data Before you think about future savings, you need to know exactly what you’re spending today. Without a reliable starting point, you can’t measure savings, compare MSP suppliers fairly, or spot inflated costs. Gather data on: Your current contingent workforce headcount Pay rates and charge rates by role Agency fees and mark-ups Statutory costs (holiday pay, NI, pension, apprenticeship levy) Screening, testing, and compliance costs Technology/VMS fees Any other pass-through costs In our experience, the most common reason an MSP cost model fails in procurement is missing or incomplete baseline data. We regularly work with clients to fill these gaps before they go to market. Ask your current MSP, Preferred Supplier List (PSL), or ad-hoc supply chain to provide this in writing. If you’re met with resistance, that’s already a red flag for your procurement cost-saving strategy. 2. Understand your contingent workforce profile Your worker population profile affects almost every pricing variable in an MSP bid. Key metrics to capture: Size of contingent workforce and active assignments Assignment duration and start dates Direct fulfilment % vs. 2nd tier suppliers (The percentage of workers hired directly by the MSP versus through other agencies). Worker source breakdown (MSP-sourced vs client-sourced/payrolled) Location and line manager Pay and statutory costs per role This detail allows you to evaluate pricing models accurately. For example, if most of your workers are payrolled rather than sourced, an MSP supplier with a lower payroll rate may be more cost-effective than one with a slightly lower sourcing rate. 3. Build the business case Once you have baseline data and workforce insights, you can start building your business case. Your MSP cost model should: Be simple enough to present to your executive board Clearly show total projected savings for each bid Allow scenario modelling, e.g., impact of different direct fulfilment rates, tenure discounts, or tech costs Example:Supplier A charges a lower direct fulfilment rate but commits to only 70% direct hires. Supplier B charges slightly more but commits to 90%. Over time, Supplier B could be more cost-effective due to reduced reliance on 2nd-tier suppliers with higher mark-ups, resulting in procurement cost savings. See this in action within our E.ON MSP partnership and explore how a direct fulfilment model can reduce reliance on second-tier suppliers, improve accountability, and deliver faster, higher-quality hiring. 4. Keep the pricing spreadsheet simple Complex spreadsheets lead to inconsistent evaluations. Procurement teams benefit most from a pricing model that captures the essentials without over-engineering. Recommended inclusions: Direct fulfilment mark-up Payroll mark-up (for client-sourced workers) Tenure-based discounts 2nd tier supplier mark-up Tech/Vendor Management System (VMS) costs (priced separately) Separating VMS costs lets you compare technology spend accurately and assess the true value of different bids. It also keeps the option open to own your own platform, giving you more flexibility and making it easier to switch MSPs in the future. 5. Clarify Mark-Up vs Margin It’s surprising how often terminology causes confusion in MSP tenders. A 7% mark-up is not the same as a 7% margin. Why? Margins cost you more. Mark-up: % added to the worker’s pay rate + statutory costs Margin: % of the total charge rate In simple terms, margins are calculated as a percentage of the total amount you pay (including fees and statutory costs) so you end up paying more than you would with the same percentage mark-up. Agree upfront on which you’re using and define exactly how it will be applied to avoid confusion and unexpected costs. 6. Common pitfalls in MSP cost modelling Even the most experienced procurement teams can run into challenges when comparing MSP bids. A few small oversights at this stage can lead to big discrepancies later, either during supplier evaluation or once delivery begins. Here are the most common pitfalls to avoid: Unclear or inconsistent pay rate assumptions Hidden tech or implementation fees Overstated migration savings Delivery model impact overlooked Overcomplicated pricing templates 7. Factor in contractual terms and migration costs Migrating workers between MSP providers can appear to deliver big upfront savings but only if your contractual terms allow it. These are important to check: Worker transfer clauses and associated fees Restrictions in existing worker contracts Realistic migration percentages Treat migration savings as a one-off line item in your MSP cost model rather than building them into your ongoing projections. This avoids creating an inflated view of savings that won’t recur year after year. Always run a separate “business as usual” cost comparison without migration savings so you can see the true long-term cost picture and make more informed procurement decisions. 8. Consider temp-to-perm and permanent hire pricing Even if your MSP engagement focuses on contingent workers, include: Temp-to-perm fees (broken down by tenure, e.g., 0–13 weeks, 13–26 weeks, 26+ weeks) Ad-hoc permanent hire fees These can become decision-making tiebreakers if two bids are otherwise close in contingent workforce cost savings. 9. Balance MSP pricing with capability Price matters, but it should never be the only deciding factor. An MSP provider that charges slightly more but delivers consistently high service quality, exceptional compliance standards, and faster time-to-hire will almost always outperform a cheaper alternative in real commercial terms. We typically see procurement teams achieve better long-term value when their procurement cost-saving strategy prioritises capability and reliability over the lowest upfront cost. A cheaper MSP who can’t deliver on speed, compliance, or quality will cost more in the long run through overtime, missed deadlines, and project delays. To ensure you’re balancing both cost savings and ability, include a technical capability evaluation alongside your cost model to ensure the supplier has the following: Talent pool depth and relevance Implementation timelines Technology fit and scalability Compliance records Our service quality consistently ranks among the best in the industry, supported by some of the highest Net Promoter Scores in the MSP market. This means our clients not only get an MSP supplier who can deliver on paper; they work with a consultative partner who will protect their brand and maintain the standards your business depends on. Check out a case study where we partnered with Northumbrian Water Group (NWG) to deliver a compliant, high-performing managed service programme with 100% fulfilment and real-time cost visibility, all while meeting strict regulatory deadlines. 10. Present your MSP cost model for decision-makers Your output should be: A clear side-by-side supplier cost comparison Highlighting contractual commitments (direct fulfilment %, tech costs, temp-to-perm fees). Linked to business case outcomes and not just line-by-line cost. Many leadership boards respond best to visual data. Converting cost models into simple charts can make savings and differences between MSP suppliers instantly clear. Final checklist for your procurement cost-saving strategies Before you finalise and sign off your MSP cost model, take a step back and make sure you have addressed every key element. This is your last opportunity to confirm that your assumptions are sound and your comparisons are fair, so your board will have all the information they need to make a confident decision. Baseline data complete and verified Workforce profile documented Mark-up vs margin clarified Tech costs separated Migration savings separated from BAU costs Temp-to-perm and permanent hire pricing included Technical evaluation criteria set A well-built MSP cost model isn’t just a procurement exercise, it’ll safeguard value over the life of your MSP contract. By combining accurate data, clear pricing comparisons, and a balanced view of capability alongside cost, you’ll be able to make confident, evidence-based decisions. Your organisation can secure an MSP partnership that delivers both contingent workforce cost savings and long-term quality. Book a cost-model review session Get a personalised review of your MSP cost model and benchmark it against industry best practice to uncover hidden savings and unlock your full potential. Read other MSP insights Explore our full library of MSP resources for procurement teams navigating MSP tenders.

The Hidden System Keeping Britain’s Rail Workforce on Track

Screening on the Right Track: Rail, Sentinel and the Human Difference When you ask Diane Ravenscroft how long she’s been at Rullion, she smiles: “Twenty-six years.” In that time, rail has transformed - from laminated cards and manual calls to smartcards, live databases and mobile apps. One thing hasn’t changed: safety comes first. “Our job is to make sure everything’s safe and everything’s in place before someone goes trackside,” says Diane. First things first: what is Sentinel? If you work on or near the UK rail infrastructure, you’ll know Sentinel. It’s the rail industry’s Authority to Work system, a smartcard linked to a secure database and app that lets duty holders verify a worker’s competence and fitness to work in real time. Put simply: Sentinel is the passport to work trackside, owned and operated by Network Rail for the industry. Supported by the Sentinel Scheme Rules, every supplier working within the rail infrastructure must follow and adhere to these standards - effectively a contract outlining the responsibilities of sponsors, custodians, and cardholders. As Rullion is a Primary Sponsor to its rail workers, its role is to safeguard each candidate and ensure they are fully safe and compliant before stepping onto the network. As Sibel Akel, Marketing Director, asks Diane in the interview: “So what is Sentinel, in simple terms?” Diane responds, “It’s how the industry checks competence and fitness in near real time, the last mile of assurance before someone steps onto the track.” Part of that responsibility includes ordering and recording PPE (personal protective equipment), ensuring it’s correctly issued and evidenced, and making sure every worker receives their unique Sentinel card – similar to a driving licence, complete with a chip linking all their credentials, medical fitness, and competencies. It’s the record that allows each worker to move safely around site. Why it matters Rail is one of Britain’s safest transport systems. It is a result of relentless focus on standards, competence and verification. In 2023/24, RSSB (Rail Safety and Standards Board) recorded zero passenger and workforce fatalities in train accidents, a headline that reflects systemic improvements in assurance and risk controls. At the same time, the risk landscape on Britain’s railways remains very real. The ORR’s 2025 report notes that while overall train accident risk stayed “broadly consistent” with recent years, serious events continue - including 29 high-potential incidents, most of which occurred at level crossing. For those responsible for screening and workforce readiness, it’s a clear reminder: compliance, competence, and site verification via systems like Sentinel remain critical. Even with a strong safety record, there is little margin for error. How Sentinel works (and where screening fits) Sentinel sets out the rules, roles, and responsibilities for sponsors, card holders, and custodians. It underpins competence (such as PTS) and fitness-to-work checks, enabling on-site verification by scanning a card or app to confirm a worker’s authority to be there. This is where Rullion comes in. Through pre-employment screening Rullion ensures workers are fully cleared and ready to be added into client workflows and shift plans. That includes Right to Work checks, identity verification, criminal record checks (where required), employment history, and role-specific evidence. In rail, speed without accuracy is risky and accuracy without communication is slow. “The difference is the human touch,” Diane explains. “Candidates know who’s looking after them. We talk them through what to prepare, what documents we need - and we keep them updated.” A 6-step simple, rail-ready process that removes friction 1) Welcome call (the golden five minutes) Before any links go out, a Rullion advisor calls the candidate to explain the journey and exactly what to prepare; passport, proof of address, full employment history with contacts, and training evidence. For rail, we also set expectations around Sentinel competencies (e.g. PTS) and what will be verified on site. This first call prevents the stop-start delays that can derail onboarding. 2) Smart digital journey Candidates submit their details through a secure portal while Rullion completes the Right to Work check, DBS (if required), employment references, and any role-specific verifications. Where some providers rely entirely on automation, Rullion’s advisors follow up personally - calling when it’s faster, emailing when it’s enough - to keep each case moving. 3) Competencies and specialist checks Depending on their role, candidates may also need competencies such as COSS (Controller of Site Safety) or OLEC (Overhead Line Electrification Construction). Each competency has specific training and evidence requirements that must be verified before booking, and every record links back to the candidate’s Sentinel profile. 4) Fatigue management and wellbeing Rullion also manages fatigue as part of its duty of care. The team tracks every worker’s shift patterns, start and finish times, travel, and breaks to ensure no one exceeds the rail industry’s safety limits. Each worker must have a minimum 12-hour rest between shifts and a maximum 14-hour ‘door-to-door’ working day, including travel. This proactive fatigue management protects both workers and projects and is managed closely in collaboration with Rullion’s Health and Safety team. 5) Sentinel-aware handover Once cleared, Rullion delivers a complete file, not an amber traffic light the client must finish. For rail, that means sponsors and hiring teams can move confidently into Sentinel card and competence steps knowing screening is complete and compliant. 6) Weekly client reviews Short cadence calls surface issues early (non-responsive candidates, missing documents, training bookings) so the plan stays on track. Sentinel: How to get the best from it What works brilliantly Real-time authority checks: Scan the card/app and confirm competence + fitness instantly - essential for safety-critical shifts. Industry-wide standard: Because it’s Network Rail’s system, suppliers and projects share a common language for competence and assurance. Common challenges (and fixes) Data completeness: Sentinel confirms authority to work; it doesn’t collect your pre-employment data for you. If screening is incomplete or messy, everything slows. Fix: lead with a human welcome call and a clear document checklist. Edge-case confusion: New to rail? Acronyms like PTS, COSS, OLEC, competence codes and fatigue rules can overwhelm candidates. Fix: explain rail-specific requirements in plain English at the start; use email templates + one named advisor. Sponsor responsibilities: The Scheme Rules place duties on Sponsors (e.g., registration, managing breaches, maintaining primary sponsorship). Fix: give hiring managers a one-page “Sponsor 101” crib sheet with key rules and escalation paths. Why the human touch still wins in rail Safety-critical environments reward clarity and confidence. A mistyped email or missing proof of address can stall a start date; a five-minute call can remove weeks of delay. And when the stakes are high, candidates value reassurance - knowing what to expect at their medical, what a PTS induction involves, and how on-site Sentinel scans actually work. We explore more on the power of human-led screening in Pre-employment screening mistakes to avoid. Automation has improved efficiency, but human oversight still ensures the data means something. Rullion’s digital systems has its benefits, for example, it tracks when competencies are due to expire, automatically flagging renewals before they lapse, a small but vital evolution that keeps compliance strong and safety seamless. Action points for rail employers and recruiters Make Sentinel everyone’s business: Share a one-pager: what it is, how scanning works, who the Sponsor is, and how to report concerns/breaches. Front-load candidate guidance: Use a welcome call and checklist to prevent rework (Right to Work check items, DBS documentation, full employment history with contacts). Insist on complete files: Don’t accept “amber” returns you have to finish internally. In rail, partial screening equals operational delay. Measure what matters: Track average time to clear and % cleared first time with no rework. Celebrate teams that hit both speed and accuracy. For organisations selecting a rail recruitment or background screening partner for the first time, experience and evidence should come first. It’s essential to choose a provider that is regularly audited, holds the right accreditations, and can clearly demonstrate how it manages workforce safety and compliance. Understanding the Sentinel Scheme Rules takes time and expertise, so working with an experienced partner ensures the process is done right from the start. Or, as Sibel summarises: “Whoever you go with, make sure they understand the Sentinel way of working - because that’s what keeps people safe.” The power of experience and teamwork Managing the Sentinel process isn’t something that can be picked up overnight. It takes time, training, and experience to understand what’s set out in the Sentinel Scheme Rules and why each part matters. The work is subject to rigorous annual audits, supported by Rullion’s Health and Safety team, to ensure every step of the process remains compliant, consistent, and watertight. Rullion’s track record speaks for itself. “We’ve passed every audit I’ve been involved in for the last five or six years - and that’s because everyone plays their part,” says Diane. “It’s a team effort across Candidate Services, Front of House, and Health and Safety.” At Rullion, teamwork is at the heart of everything we do. Within Candidate Services, experience runs deep, (team members like Kelly Smith and Susan Good, both Senior Candidate Services Advisors, share more than 45 years at Rullion between them). That collective expertise means challenges are solved quickly, standards remain consistent, and candidates always have someone they can trust. Even as a remote team, collaboration has never been stronger. Daily communication, shared systems, and a culture built on mutual support keep everyone connected and focused on one shared goal: helping clients and candidates get work done.

How to Support Mental Health in Critical Infrastructure Jobs

Every time a train leaves a station, a reactor stays stable, or the lights come on in your home, there’s someone behind the scenes carrying that responsibility. Rail, nuclear, energy, and utilities don’t run on systems alone – they run on people. But the reality is that those who keep the lights on for millions often run the risk of burning out themselves. And it’s not a marginal issue. According to the Burnout Report 2025, 91% of UK adults experienced high or extreme stress over the past year, with one in three saying they felt that way “often” or “always.” In critical infrastructure, where the pressure is magnified by safety and responsibility, the impact can be even greater. So, how do we better support the wellbeing of those working in some of the UK’s most demanding, safety-critical roles? The hidden weight of responsibility Take energy and utilities for example. It’s 3am and there’s a shift team working against the clock to restore power to thousands of homes after a sudden outage. For them, there’s no margin for error. And power’s restored before most of us even realise it failed. Across the critical infrastructure sectors, many professionals face similar realities: Shift fatigue – poorly designed shift work in terms of timing, duration, breaks, and rotation leads to worsening fatigue when left unchecked, which is associated with stress, errors, and health risks. High-stakes environments – nuclear and energy roles operate under “zero-error expectations”, where even small oversights can carry serious consequences. Isolation – remote sites and small operational teams can leave workers cut off from daily support networks. The weight of purpose – knowing that mistakes don’t just affect your team but entire communities. According to the RSSB’s latest report on rail’s mental health trends, mental health consistently ranks among the top five reasons for sickness and occupational health absences. Towards a Healthier Workforce Encouragingly, positive shifts are happening: Rail - The Railway Mental Health Charter relaunched in 2024, is helping operators build structured wellbeing programmes. Utilities - organisations such as Wales & West Utilities now include fatigue risk assessments in their HSE policies. Energy - in 2025, Energy UK strengthened support for its Mental Health First Aiders, embedding wellbeing into workforce practices. At an individual level, even small changes matter: Micro-recoveries – a few minutes between tasks to reset can reduce stress build-up when longer breaks aren't possible. Buddy systems – regular check-ins with colleagues to reduce isolation and spot early warning signs. Reframing support – viewing professional help not as weakness, but as performance maintenance. For professionals in these critical infrastructure sectors, wellbeing can’t be an afterthought. It needs to be part of your working environment. Built into how shifts are managed, how teams support each other, and how leaders value their people. People are priceless This belief shapes how we look after our teams, as well as the candidates and clients we support. That’s why wellbeing is something we embed into our daily work. Our trained Mental Health First Aiders are always available to provide confidential support, advice, and guidance, because when we care for our people, they’re better equipped to care for you too. Recruitment, for us, is about connecting you with organisations where you can thrive both professionally and personally in the right working environment. It's not just matching skills to vacancies. Because in safety-critical sectors, your health isn’t just personal; it’s what makes long, sustainable careers possible.