Contingent Workforce Management Terms: Your Complete Glossary

1099 Employee 

A worker classified as an independent contractor for tax purposes; they receive a 1099 form to report income on their tax return. 

Alternative Staffing 

Alternative staffing is a generic term that refers to the hiring of individuals on a part-time or as-needed basis. The term pretty much refers to any worker that doesn’t fall under the regular, direct and full-time employment. Alternative staffing arrangements typically refer to those working under short-term contracts.

Applicant Tracking System (ATS) 

A software application that enables the electronic handling of recruitment needs. 

Background  Checks 

The process of verifying that an individual is who they claim to be, which may include checking criminal records, education, employment history, and other activities from the past. 

Assignment

Assignment refers to either the period of time a contingent worker is working with a business, or the task or duty that is being performed. Once the assignment is finished, their contract with an organization is up. 

Bench 

The group of contingent workers who are currently not on an assignment but are available for work. 

Bill Rate 

The rate a staffing agency charges to a client for the services of each temporary worker. 

Co-Employment Risk 

The risk that a client company and staffing agency become viewed as joint employers of a contingent worker, thereby sharing legal responsibilities and liabilities. 

Co-Sourcing 

A staffing model where a portion of the service is outsourced to an external service provider, while some strategic control remains with the internal team. 

Compliance 

Adherence to laws and regulations governing contingent workforce engagements, including classification of workers, tax implications, and labor laws. 

Compliance Tracking 

Monitoring and recording compliance with industry regulations and labor laws. 

Contingent RPO (Recruitment Process Outsourcing) 

A form of business process outsourcing where an employer transfers all or part of its recruitment processes to an external service provider, but only for contingent labor. 

Contingent Workforce 

A labor pool consisting of individuals hired by an organization on a non-permanent basis, such as freelancers, independent contractors, consultants, and temporary contract workers.

Contingent Workforce Consulting 

Professional services provided by experts to help organizations develop strategies and practices for effectively managing their contingent workforce. 

Contingent Workforce Outsourcing (CWO) 

The practice of using an external organization to manage all or part of the processes and activities associated with the contingent workforce. 

Contingent Workforce Program (CWP) 

An organizational program that manages all aspects of a company's contingent labor, including staffing, procurement, and compliance. 

Contingent Workforce Strategy 

A business's approach to managing and optimizing the use of contingent labor. 

Contract-to-Hire 

A type of employment arrangement where a worker is initially hired on a temporary contract with the potential to become a permanent employee. 

Cost Per Hire 

The total cost associated with the recruitment of new employees, including advertising expenses, recruiter fees, and staff time. 

Direct Sourcing 

The strategy of sourcing candidates directly rather than through third-party staffing agencies or search firms. 

Employer of Record (EOR) 

A service that acts as the official employer for tax purposes while the employee performs work at a different company. 

Engagement Manager 

A role that involves the day-to-day management of contingent workers, ensuring that they are effectively integrated into the team and productive. 

Flex-Staffing 

An employment arrangement that allows workers to have variable schedules and workloads based on employer needs. 

Freelancer 

An individual who works as a self-employed person, offering services to multiple clients at a time. 

Full-Time  Equivalent (FTE) 

A unit that indicates the workload of an employed person in a way that makes workloads comparable across various contexts. 

Gig Economy 

The segment of the economy that operates on short-term contracts or freelance work as opposed to permanent jobs. 

Human Capital Management (HCM) 

The set of practices related to people resource management, specifically in the categories of workforce acquisition, management, and optimization. 

Human Resource Outsourcing (HRO) 

Contracting out various HR tasks, such as payroll and benefits administration, to a third-party provider. 

Independent Consultant 

A professional who provides expert advice in a particular area and operates independently, not as an employee of a company. 

Independent Contractor 

An individual in business for themselves who provides services to another entity as a non-employee. Deemed a 1099 in the United States 

Job Bidding 

The process in which potential employees, including contingent workers, bid on tasks or projects by proposing their qualifications and rate for the job. 

Labor Categories 

Classifications of jobs that have similar knowledge, skills, and abilities that are used to standardize contract labor qualifications. 

Managed Service Provider (MSP) 

A third-party company that manages a client's contingent workforce program. MSPs are responsible for the end-to-end management of the contingent workforce, including selection, engagement, management, and analysis of workforce spending. 

Margin 

The difference between the bill rate and the pay rate measured as a percentage of the Bill Rate. Example: John gets paid $100 perm hour and the staffing agency adds $50 to the rate making the bill rate $150. The margin is calculated as (150-100)/150 = 33% Margin. This is often confused with the term markup which is calculated off of the pay rate. 

Market Rate 

The average price and range of pricing in the staffing industry for contingent worker services. 

Markup 

The difference between the bill rate and the pay rate measured as a percentage of the pay rate. Example: John gets paid $100 per hour and the staffing agency adds $50 to the rate making the bill rate $150. The markup is calculated as (150-100)/100 = 50% Markup. This is often confused with the term margin which is calculated off of the bill rate. 

Master Service Agreement (MSA) 

A contract reached between parties, in which the parties agree to most of the terms that will govern future transactions or future agreements. 

Master Vendor

A master vendor is where a single staffing agency assumes full responsibility for all of a company’s staffing needs. They will fill the roles themselves, or if they cannot fulfill the roles they will outsource them to other staffing agencies.

Merger & Acquisition (M&A) Talent 

The practice of hiring or utilizing existing contingent workers to support the transition and integration processes during a merger or acquisition. 

MSP Fee 

The fee that the MSP charges for the services it provides. Often based on a percentage of the supplier invoices.  

Non Employee

A non-employee is any worker who is not an employee of any organization. This could be anyone in the contingent workforce, such as a freelancer, consultant, independent contractor or temp.

Non-Compete Agreement (NCA) 

A contract between a worker and an employer that restricts the worker from entering into competition with the employer after the employment period is over. 

Non-Disclosure Agreement (NDA) 

A legally binding contract that establishes a confidential relationship between the employer and the worker. 

Offboarding 

The procedure for transitioning a contingent worker out of the company at the end of their contract. 

On-Demand Talent 

Highly skilled professionals who are available to work on a flexible basis, often remotely, and can be engaged quickly to meet business requirements. 

Onboarding 

The process of integrating a new worker into an organization, including training and orientation. 

Pay Rate 

The amount of money a contingent worker receives, which is often different from the bill rate due to markups by staffing agencies. 

Performance Management 

The assessment and improvement of work performance and the provision of feedback to contingent workers. 

Professional Employer Organization (PEO) 

An outsourcing firm that provides services such as employee benefits, payroll, and workers' compensation, often for small businesses. 

Project-Based Hiring 

A recruitment approach that focuses on acquiring talent for a specific project rather than for an ongoing role. 

Quality of Hire 

A metric used to evaluate the value a new hire adds to a company, in terms of performance and tenure. 

Ramp Up Time 

The time it takes for a contingent worker to become fully productive in their new role. 

Rate Card 

A document containing the prices and descriptions for the various services a company provides, which can be used as a negotiating tool between the company and its clients. 

Resource  Allocation 

The process of assigning and managing assets in a manner that supports an organization's strategic goals. 

Rogue Spend

Rogue spend is spending that occurs on sourcing, engaging and hiring contingent workers in scenarios that are not accounted for, not approved, and have not followed a strategic approach. This typically occurs when spreadsheets are used over vendor management software. 

Learn more about rogue spend and how to prevent it.                                    What is Rogue Spend in Non-employee Workforce Management?

Service Delivery Manager 

A professional who oversees the delivery of services or service technology to a company's clients or customers. 

Skill Gap 

The difference between the skills required for a job and the actual skills possessed by the employees. 

Skills Inventory 

 A database or list that an organization maintains of the skills, qualifications, and interests of its current and potential employees, including contingent workers. 

Service level agreement (SLA)

A SLA is a document that describes the minimum levels of service quality a supplier should comply with. This typically involves key performance indicators such as time-to-submit and time-to-fill. 

Staffing Agency 

An organization that recruits employees for businesses that need to fill positions on a temporary, seasonal, or permanent basis.  

Statement of Work (SOW) 

 A formal document that captures and defines the work activities, deliverables, and timeline a vendor must execute in performance of specified work for a client. 

T4 Employee 

Talent Acquisition 

 The process of finding and acquiring skilled human labor for organizational needs and to meet any labor requirement. 

Talent Broker 

 An individual or organization that matches freelance professionals with companies that need their skills. 

Talent Community 

A network of candidates interested in working for an organization who may engage with the company through various channels and keep updated with new job opportunities and company news. 

Talent Pool 

A database where recruiters and HR professionals keep all of their top job candidates. 

Temporary  Worker

A temporary worker, also known as a temp, is a worker who is employed by a staffing agency that sends them to work for a different company for short periods of time. They are usually used by companies to meet seasonal demand, fill temporary positions or to scale up rapidly. 

Time-to-Fill 

A metric that refers to the number of days between publishing a job opening and hiring someone to fill it. 

Time-to-Hire

Time-to-hire is the time it takes to fill a position once a staffing agency has made contact with a potential candidate, rather than from the time the position is opened up like time-to-fill. 

Time-to-Submit

The time it takes for a staffing agency to submit its first candidate against an open requirement. 

Total Talent Management (TTM) 

An integrated strategy to manage and optimize the use of all types of workers, including permanent hires, part-timers, and contingent workers, to achieve business goals. 

Turnover Rate 

The rate at which contingent workers leave the workforce and are replaced. 

Vendor

A vendor is a person or company offering a service or product for sale. In the contingent workforce, a vendor refers to a staffing agency who fills job requests.

Vendor Management System (VMS) 

A software application that enables businesses to manage and procure staffing services as well as to manage contingent workforce vendor relationships. 

Read more about What is a Vendor Management System? 

W2 Employee 

Worker Classification 

The process of determining whether a worker is an independent contractor or an employee for purposes of taxation and compliance. 

Workforce  Analytics 

The use of data analysis techniques to understand, improve, and optimize the management of the workforce. 

Workforce  Diversity 

The inclusion of a wide variety of people of different races, genders, ages, religions, disabilities, ethnicities, sexual orientations, and education levels within a workforce. 

Workforce Mobilization 

The ability of an organization to rapidly move workers from one assignment to another to meet changing market demands and project needs. 

Workforce  Planning 

The analytical process for anticipating and managing the needs of the business regarding the talent acquisition.