Cost pressure isn’t new. What is new is how quickly traditional MSP savings models start to break down.

For years, the formula has been simple: consolidate suppliers, renegotiate margins, deliver upfront savings. And it works. Initially.

But when another year passes and another, and the same lever is pulled again and again. Eventually, something gives.

The problem with margin-led savings

Reducing supplier margins is often the fastest way to show impact because it’s measurable, immediate, and makes for a compelling first-year story. However, it’s also finite.

As Cameron Robinson, Head of Enterprise Solutions here at Solve explains:

“If your savings model depends on squeezing supplier margins year after year, it’s only a matter of time before quality or speed suffers. Sustainable programs reduce dependency instead of just renegotiating it.”

When margins are continually tightened, suppliers adjust, service levels change, candidate quality can decline, response times stretch, and relationships strain. You really start to put any possible ‘priority client’ status at risk.

While the savings may still appear in the spreadsheet, the hidden costs will start surfacing elsewhere.

From margin reduction to channel optimisation

True year-on-year savings comes from taking two fundamental actions:

1. Controlling demand in the first place
2. Directing demand to lower cost sourcing channels

The first requires a considered investment in workforce planning, leader education and ways of working evolution.

The second is something you can make progress on today.

It’s possible to protect quality at the same time as improving commercial outcomes by reducing reliance on expensive channels and gradually shifting towards:

• Direct sourcing under the client brand
• Owned and nurtured talent pools
• Referrals and redeployments
• Repeat engagement of proven contractors

As Cameron puts it:

“The most effective MSP programs don’t chase savings through pressure. They build savings structurally by designing smarter access to talent.”

Why this matters across the business

For Procurement, you can consistently achieve significantly greater savings for less time and resource investment. You can also have confidence that the supply strategy is sustainable, with channels diversified and service delivery protected.

For Talent Acquisition, access to quality candidates is more than safeguarded, it’s elevated. Same goes for your employer brand; you’re sustainably building your own reputation in the market, rather than relying on the reputation of your agencies.

For HR and workforce strategy leaders, you can reduce fragility. The organisation isn’t overexposed to a single sourcing model or external market volatility. You would confidence in reliable access to the skills and capabilities the organisation needs to achieve its goals.

When cost strategy aligns with workforce strategy, value compounds rather than erodes.

What sustainable savings actually look like

Sustainable MSP savings are achieved through:

• Higher fill rates via lower-cost channels
• Improved redeployment and retention
• Reduced repeat onboarding costs
• Stronger direct engagement with known talent

Access to talent improves, the quality stabilises, cost becomes predictable, and the business avoids the disruption that comes with aggressive supplier resets.

Long-term value is built through intentional workforce design. Whether you have an MSP or manage your contingent workforce internally, if your cost-saving strategy just depends on supplier renegotiation, it might be time to rethink the model.