Standard Definitions

A wealth of terminology and acronyms is used in the outsourcing community, from SoW, MSP and CWO to RPO and much more. We often talk about vendor neutral models, 1st and 2nd generation MSPs or Direct Sourcing Programmes. But while this terminology is commonplace for many in the sector it can often mean different things to different providers. As for the end clients it can often be a confusing cloud of varied outsource model descriptions that can sometimes mean different things to different people.

Glossary of Terms

To help you navigate and create a lexicon of the common terms that are used, we’ve developed a Glossary of Terms that our members can use with each other and share with their clients and the wider community to help define key acronyms and outline the main features of the different outsourcing models.

Download the Full Glossary

Term	Definition	Cost Savings	Streamlining	Quality	Transparency	Compliance & Risk
Managed Service Provider (MSP)	A Managed Service Provider is a third-party organization that manages a company's recruitment and contingent workforce needs.
Master Vendor (MV)	A Master Vendor is a staffing firm that becomes the main point of contact for a company's temporary staffing needs. The MV manages and coordinates with multiple secondary suppliers to ensure that the organization receives the best talent in a timely and cost-effective manner. This approach centralizes the recruitment process, streamlining vendor interactions and reducing administrative burdens.
MSP/MV (Hybrid)	Master Vendor embedded in Managed Service Provider
Recruitment Process Outsourcing (RPO)	Recruitment Process Outsourcing (RPO) is a business strategy where an organization transfers all or part of its recruitment activities to an external service provider. This approach allows companies to leverage the expertise and resources of specialized recruitment firms, resulting in more efficient and effective hiring processes. RPO providers take on the responsibility of managing the entire recruitment lifecycle, from sourcing and screening candidates to onboarding new hires. RPOs are exclusive to direct hire processes
End-to End RPO	In an end-to-end RPO model, the provider manages the entire recruitment process from start to finish. This comprehensive approach includes job requisition, sourcing, screening, interviewing, offer management, and onboarding. End-to-end RPO is ideal for organizations seeking a fully outsourced recruitment solution that integrates seamlessly with their internal processes.
Project RPO or RPO on demand	Project RPO is a flexible solution designed for short-term or specific hiring needs, such as launching a new product, entering a new market, or completing a significant project. The provider takes on the recruitment responsibilities for the duration of the project, ensuring that the organization has the necessary talent to achieve its goals. Once the project is completed, the organization can transition back to its regular recruitment processes.
Selective RPO	Selective RPO, also known as partial RPO, involves outsourcing specific components of the recruitment process. This model allows organizations to retain control over certain aspects of hiring while benefiting from the expertise of the RPO provider in areas such as sourcing, screening, or onboarding. Selective RPO is suitable for companies that require support in particular areas but do not need a fully outsourced solution.
Business Process Outsourcing (BPO)	Business Process Outsourcing (BPO) is a strategic practice where organizations delegate specific business operations and responsibilities to external service providers. This approach allows companies to focus on their core competencies while leveraging the expertise, efficiency, and cost-effectiveness of specialized third-party vendors. BPO can encompass a wide range of services, including customer support, human resources, finance and accounting, IT services, and more.
Front-Office-BPO	Front-office BPO involves outsourcing customer-facing services such as customer support, sales, and marketing. These services are critical to maintaining customer satisfaction and driving revenue growth. By partnering with a BPO provider for front-office operations, companies can benefit from advanced technologies, skilled personnel, and scalable solutions that enhance customer interactions and service quality.
Back-Office-BPO	Back-office BPO focuses on internal business functions that support the core operations of an organization. This includes tasks such as payroll processing, data entry, finance and accounting, and supply chain management. Outsourcing back-office functions can lead to significant cost savings, improved accuracy, and increased efficiency by leveraging the specialized capabilities of BPO providers.
Functional Service Provider (FSP)	A Functional Service Provider (FSP) is a third-party organization that offers specialized services or functions to another company, typically in the pharmaceutical, biotechnology, and clinical research sectors. These services can range from clinical trial management, data analysis, and regulatory affairs, to pharmacovigilance. The primary goal of an FSP is to provide expertise and resources that may not be available in-house, allowing the client company to focus on its core competencies while ensuring high-quality performance in the outsourced functions.
Employer of Record (EOR)	An Employer of Record (EOR) is a third-party organization that takes on the legal responsibilities of employing workers on behalf of a company, including handling payroll, taxes, benefits, and compliance with labour laws. This allows companies to hire employees in different locations without establishing a legal entity there, while still having supervision over their work.
Agent of Record (AOR)	An Agent of Record (AOR) is a third-party organization that takes on the responsibilities of contracting independent contractors or gig workers on behalf of a company, in a compliant way. Mostly used for fixed-term projects or as "fire extinguishers" for important ad-hoc projects.

Technology

Term	Definition
Vendor Management System (VMS)	A Vendor Management System is designed to facilitate the entire process of managing external workforce suppliers. It provides a centralized platform that automates procurement, engagement, and management of third-party vendors. The primary purpose of a VMS is to improve transparency, control costs, ensure compliance, and enhance the quality of services provided by vendors. The most used and known VMS tools are SAP Fieldglass, Beeline, Nétive, VDNLY, but also local or regional VMS tools are used depending on the requirements of the client.
Applicant Tracking System (ATS)	Applicant Tracking System (ATS): A software application designed to help an organization manage its recruitment process, including posting job openings, collecting resumes, and tracking candidates throughout the hiring process. It streamlines the recruiting workflow, making it easier to organize and evaluate applicants.
Time Tracking Tool (TTT)	Time Tracking Tool: A time tracking tool is a software application or system designed to monitor and record the amount of time an individual or team spends on various tasks and activities. It is commonly used for project management, employee productivity analysis, and accurate billing of clients. These tools often include features such as timers, timesheets, reporting, and integration with other project management or accounting systems.
Artificial Intelligence (AI)	Artificial Intelligence (AI) is a branch of computer science that involves creating machines or software capable of performing tasks that typically require human intelligence. These tasks include learning, reasoning, problem-solving, perception, language understanding, and adaptation. AI systems can range from simple, rule-based systems to complex, self-learning neural networks.

Definitions

Term	Definition
Vendor Neutral	Vendor Neutral: A term used to describe products, services, or solutions that are not dependent on or biased towards a specific vendor or manufacturer. This allows for greater flexibility and compatibility across different systems and platforms.
xx- Generation Program	First generation refers to an end user customer who has not outsourced their recruitment before. Second generation etc refers to the number of times an end user customer has either changed provider or renegotiated a contract term with their existing provider.
Supplier funded program	Program is funded by suppliers, meaning that they have to pay a MV or and MSP fee.
Client funded program	Client is financing the program.
Offsite	An offsite team is a group of employees who work remotely from locations outside the company's primary office. These teams often utilize various communication and collaboration tools to stay connected and productive. Offsite teams can include people working from home, co-working spaces, or other remote locations, providing flexibility and often leading to increased job satisfaction and efficiency.
Onsite	Onsite refers to activities or work performed at a specific location, typically the primary place of a business, project, or event. It often implies physical presence at the designated site, as opposed to remote or offsite work.
Umbrella Company	An umbrella company is a business that employs contractors working on temporary contracts, often through recruitment agencies. It handles administrative functions such as payroll, tax deductions, and compliance with employment laws, allowing contractors to focus on their work without worrying about these details.
Vendor Management	The MSP oversees the performance and compliance of multiple staffing vendors, ensuring that they meet the organization's standards and requirements. By managing these relationships, the MSP helps to streamline communications and improve the quality of hires.
Consolidate Invoicing	One of the significant advantages of utilizing an MSP is the consolidation of invoices from various suppliers. This simplifies the billing process, reduces administrative burden, and ensures more efficient financial management.
Statement of Work (SOW)	A Statement of Work (SOW) is a comprehensive document that outlines the specific tasks, deliverables, timelines, and expectations for a project or contract. It serves as a formal agreement between parties, detailing what is to be done, how it will be accomplished, and the criteria for success. An SOW helps ensure clarity and alignment, reducing misunderstandings and setting a foundation for measuring progress and performance.
Total Talent Management (TTM)	Total Talent Management (TTM) is an integrated approach to managing an organization's entire workforce, encompassing both permanent employees and contingent workers such as freelancers, contractors, and temporary staff. This holistic strategy aims to optimize talent acquisition, development, and retention while aligning workforce capabilities with the organization's strategic goals.
Direct Sourcing	Direct sourcing, also known as self-sourcing, is a procurement strategy where a company directly engages with potential candidates or suppliers without the involvement of third-party intermediaries such as staffing agencies or recruitment firms. This method allows organizations to build their own talent pools or supplier networks, often leading to more cost-effective and efficient hiring or procurement processes.
Preferred Supplier List (PSL)	As PSL we understand the total by the client approved supply chain with all it's vendors. In general in an outsourced solution, the PSL will be consolidated this rersults in fewer suppliers and guarantees an increase in quality and engagement.
Tiering	In many programs the client request a so called "tiering process" in which on a quaterly basis the performance of the cuppliers is monitored and a ranking (Tier 1, Tier 2, etc) is applied. Tiering can result that exceptional perfoming suppliers will have an advantage, as they receive open position earlier and exclusive for a specific time.
Compliance	Compliance refers to the act of conforming to a rule, standard, law, or regulation. It involves adhering to a set of guidelines or directives established by a governing body to ensure appropriate behavior and practices within an organization or society. Compliance is essential in various fields, including business, healthcare, and finance, to maintain legal and ethical standards and to protect the rights and safety of individuals and organizations.
Risk Mitigation	Risk Mitigation is the process of identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability and impact of unfortunate events. It involves implementing strategies to reduce the adverse effects and potential losses from risks.

Definition Contingent Workforce

Category	Description	Risk
Employee	Full-time or part-time workers hired by the company	Employer, performance, lack of flexibility
Temporary Worker	Agency temps, staff augmentation, payrollees, retirees, interns, and company alumni	Indemnification and co-employment
Freelancer	Non-agency workers engaged for task-specific or piece work	Misclassification, co-employment, and delivery
Independent Contractor	Qualified independent contractors and small service providers	Misclassification, co-employment, delivery, and indemnification
Consultant	Boutique, specialized service providers, and large consulting firms	Delivery, misclassification