Glossary of Common Terms within the Placement Industry
Within the recruitment or staffing industry, we commonly use some terms that may be new to companies who are recruiting people using our services for the first time. Knowingly or unknowingly, we frequently use these term with our clients. For the convenience of our clients, we list below the most frequently used term within the placement industry by recruiters:[efaccordion id=”01″] [efitems title=”Contingency Recruiting (Search)” text=”Contingency Recruiting generally refers to senior or top level recruitment. It also includes executive level search mostly undertaken by a placement agency. The placement agency undertakes the responsibility to initially recruit, screen and interview with payment of either or all of the fees contingent to the hiring of the desired candidate within the job description provided by the client (Also see: Retained Search).”] [efitems title=”Contingency Placement” text=”(See: ‘Contingency Recruiting‘ also) ‘Contingency Placement‘ refers to the usual practice of charging a fee to the employer after a successful referral of an applicant to the client for placement within their organization (Also see: ‘Retained Search‘).”] [efitems title=”Contingent Work or Contingent Worker” text=”A term which is used to describe a work agreement (work agreements) that usually differ from regular or permanent and direct salary and wage employments. ‘Contingent Workers‘ mostly comprise of temporary employees provided by a staffing / placement agency or independent consultants / contractors. ‘Contingent Workers’ also include temp (temporary) workers from an internal pool of job seekers, or others (such as interns) employed by a company for a limited time period. They do not include part-time regular employees and are mainly distinguished by a fixed and explicit tenure.
Workers with ‘Professional Employment Agency‘ (see definition below) agreements are not considered ‘Contingent Workers’. Their relationship is usually ongoing. Outsourcing is also out of the purview of the ‘Contingent Work‘ definition. Outsourcing is generally a vendor-to-supplier relationship and not an employer-to-worker relationship.
The ‘Contingent Worker’ term applies to all kinds of workers with any skill set or experience levels who fall under the above definition. Included are professionals, officers, executives, blue-collar, clerical staff etc.”] [efitems title=”Contractor” text=”A ‘Contractor‘ is any Individual or Firm who is hired to deliver a service or set of services laid out within a contract. Many companies interchange this term with a ‘temporary employee‘ to refer to them as individuals employed (provided by a staffing firm) mostly at a professional level.”] [efitems title=”Direct Hire” text=”‘Direct Hire‘ is a term coined to refer to services provided by a placement / staffing agency in order to help the organization obtain employees to work within their company (on their payroll) as against ‘temporary staffing‘ wherein the employee usually works on the staffing companies’ payroll (Also see: Placement / Permanent Placement).”] [efitems title=”Executive Search” text=”‘Executive Search‘ (also known as ‘headhunting‘) refers to recruitment services commonly used for sourcing candidates for senior (top level), executives or similar specialized high positions in companies. (Also visit: Our Executive Search page).”] [efitems title=”Managed Services / Managed Staffing” text=”‘Managed Staffing Services‘ is usually used to describe services including facilities support management and outsourcing staffing services. It generally refers to on-site supervision or management of functions or departments at a client(s) site. It is mostly on an ongoing basis & generally for an indefinite time (unless otherwise agreed upon). In the world of staffing, these kinds of service providers are also called ‘Managed Service Providers‘ or ‘MSPs‘. All these terms are used interchangeably.”] [efitems title=”Managed Service Providers (MSPs)” text=”‘Managed Service Providers‘ are companies who undertake on themselves the primary responsibility of managing a client’s contingent workforce requirement. Typically, the responsibilities of MSPs include overall program management; reporting; tracking; supplier selection; supplier management; order distribution; and, consolidated billing. Many of the MSPs nowadays provide their clients with a ‘Vendor Management System (VMS)‘ and usually have their physical presence within the client’s premises. MSPs can be totally independent of staffing suppliers.”] [efitems title=”Master Supplier” text=”A ‘Master Supplier‘ is an individual / organization who is a staffing supplier and who undertakes the overall responsibility to provide clients with temporary staffing for their staffing needs. When an organization appoints a ‘Master Supplier’, all their staffing orders first go to the ‘Master Supplier’ who then can either fill their staffing requirements on their own or may appoint ‘Secondary Supplier(s)’ to fulfill them. Many-a-times, the ‘Master Supplier’ will not only fulfill the complete temporary staffing requirements of the employer, they may also help manage the employers’ contingent workforce programs. Such a staffing supplier is also called: A ‘Master Vendor‘ (Also see:Vendor on Premises).”] [efitems title=”On-boarding” text=”‘On-boarding‘ is the process that is followed to bring a worker into a position (within the organization) with a purpose of providing the necessary tools to become productive at the earliest. ‘On-boarding’ applies to both permanent hiring as well as for ‘Contingent Workers’. The ‘On-boarding’ process may include induction training, seat assignment, fulfilling equipment requirements etc. Most ATSs and VMSs include the ‘On-boarding’ functions.”] [efitems title=”On-Site” text=”‘On-Site‘ refers to the placement services provided to clients via staffing provider located at the clients’ premises.”] [efitems title=”On-Site Management” text=”‘On-Site Management‘ relates to the management of a function or department by the placement service provider at the client’s premise (Also see:Managed Services).”] [efitems title=”On-Site Supervision” text=”‘On-Site Supervision’ is the supervision by the staffing service provider (supplier) at the client’s premises.”] [efitems title=”Partnering” text=”‘Partnering‘ long-term commitment focused on a ‘Win-Win’ relationship in between the customer and the placement consultant. Generally, such a partnering adds value and benefits both parties through increased sales, reduced costs, and greater productivity.”] [efitems title=”Payrolling” text=”‘Payrolling‘ is mostly in relation to ‘Contingent Staffing‘, payrolling refers to the provisioning of long-term temporary workers to a customer wherein the workers have been recruited (interviewed, tested and approved) by the customer, however, in reality, are employees of the supplier providing the payroll services.
There may be occurrences wherein only the customer has the right information and experience to evaluate the potential workers. Mostly, payrolling arrangements are temporary in nature and they involve a specific client function or position. Payrolling services are usually billed at comparatively lower markups than traditional temporary staffing. This is primary because most of the time the staffing firm does not incur major recruitment costs.”] [efitems title=”Per Diem” text=”‘Per Diem refers to the daily living expenses which is paid to technical, medical, or any skilled contractual employees when they are deployed at distant locations requiring housing (away from home) or if they are relocating to a new location.
Per Diem may also refer to charging by the day (instead of normal hourly billing) or shorthand for nurses staffed on a daily basis as against on travel basis.”] [efitems title=”Perm” text=”‘Perm‘ is usually the short form for permanent, used mostly as a prefix with placement.”] [efitems title=”Permanent Placement” text=”‘Permanent Placement‘ usually refers to the bringing together of a prospective long-term employer with a long-term job seeker for the purpose of a traditional employment relationship. Permanent Placement refers to the process of arranging such a relationship. However, nowadays the word ‘Permanent’ is falling out of place as generally the use of the word connotes a guarantee of employment and misleads typical ‘at-will’ employees (Also see:Direct Hire).”] [efitems title=”Placement Agency” text=”A ‘Placement Agency‘ simply explained, is an employment agency that seeks to refer job seekers (applicants seeking employment) to companies (employers seeking employees). A fee is charged generally to the employer after a successful referral.”] [efitems title=”Placement Fee” text=”‘Placement Fee‘ is the fee due to an agency whenever a referred candidate is successfully placed under the employment of the direct employer. The placement fee can typically be in the range of 15-35% of the annual package of the employee. Further, fee calculations are also sometimes based on monthly salary or a fixed percentage (e.g., 2 months salary or 20% of annual salary). In some cases, it can be a percentage that increases with the salary level. All placement fees are usually previously decided upon based either on mutual understanding or on the going rate for the industry.”] [efitems title=”Placement Services” text=”‘Placement Services‘ refers to services in terms of staffing or placement that are provided by an agency to an organization in order to locate a skilled employee with an aim to achieve a traditional direct hire employer / employee relationship between them. Placement Services may also include ‘temp-to-perm’ services as well.”] [efitems title=”Planned Staffing” text=”Some companies have seasonal requirements. They may have peaks and troughs for their products or services. Such companies usually benefit a lot by using ‘Planned Staffing’ services of a placement agency. They thus get into a contract for the regular use of temporaries to handle peak periods, seasonal activities or special projects that occur seasonally. The difference between ‘Planned Staffing’ and ‘Facilities Staffing‘ is mainly that planned staffing is more of a cyclical / intermittent need. Facilities staffing, on the other hand, involves the process of planning turnover in a continuous manner. Sometimes you may find these two terms being used interchangeably.”] [efitems title=”Professional Staffing” text=”‘Professional Staffing‘ refers to a segment of temp (temporary) staffing which includes workers in life sciences (healthcare, biotech, pharmaceutical, medical devices), legal, food and beverage / CPG industries among others. This segment comprises of commercial (traditional) staffing. There is consensus on how highest and lowest skilled workers are categorized, there is quite some confusion in categorizing for medium skilled and middle management roles. Within this category lie professionals such as sales, marketing, nursing, social care and HR to name a few. Many people refer to this category as professional staffing and others call it commercial staffing. These variations amongst the categories are used by different staffing associations to calculate or estimate the size and growth of their markets (Also see: Specialist Staffing).”] [efitems title=”Recruitment Process Outsourcing” text=”‘RPO‘ as it commonly called; is a category of resource outsourcing specifically in recruitment matters. The process involves selecting an organization who would then undertake the responsibility of an organization’s (all or most part) recruitment process to directly hire employees.”] [efitems title=”Retained Search” text=”‘Retained Search‘ is a service provided by an executive search company to find a candidate for a position within a client’s company. Fee for such a service is payable whether or not an employee is hired (Also see: Contingency Recruiting).”] [efitems title=”Specialist Staffing/Specialty Staffing” text=”‘Specialist staffing or specialty staffing‘ is mostly used alternatively for Professional Staffing. i.e., a temporary staffing segment which includes workers in Medical Devices, Pharmaceuticals, Life Sciences, Biotech, and Legal among others (Also see: ‘Professional Staffing‘).”] [efitems title=”Statement of Work” text=”‘SOW‘ (Statement of Work) is a document that contains the work (products/services) including the work activities and deliverable(s) that need to be supplied within a contract or, as a part of a project timeline. Contrasting with a typical contingent work arrangement which may be billed on time worked. SOW agreements usually are billed based on either on fixed price deliverable(s) or on hitting specific milestones. Sometimes they may also be billed based on time. Arrangements wherein there is a time-based billing which may be capped to a ‘not to exceed’ time level and material (Also see: SOW Consultant).”] [efitems title=”Statement of Work Consultant” text=”SOW (Statement of Work) Consultant is any recruitment consultant who executes work on any project or assignment within a ‘statement of work agreement’. As compared to consultant agencies, SOW agencies are usually given a consistent salary by their employer. Also, they continue to receive such salaries even when they are not on project assignments. Whereas SOW agencies / agents are mostly employed by other consultancy firms, many of the technology, medical devices, life science, pharmaceutical and other staffing firms have also ventured into the solutions space due to greater premium margins. Usually, you are paying them for better chemistry and proven methodology used by them. Many-a-times, ‘rogue’ agencies use SOW agreements in order to avoid restrictions that they may face while using temporary workers or consultant agencies (Also see: Statement of Work).”] [efitems title=”Strategic Staffing” text=”SS (Strategic Staffing) is referred to as a pre-planned usage of varying and flexible staffing strategies by customers. It may include using temp-to-perm hiring, planned temp-staffing for peaks in work cycles or payrolling within the pharma, biotech, med devices, CPG industries, for example.”] [efitems title=”Structured Tiers” text=”‘STs’ (Structured Tiers) is a term used for a section of multiple suppliers utilized in a specific priority. This priority may be set based on pricing levels, size and capacity or any other parameter as the employer deems fit.”] [efitems title=”Supplemental Staffing” text=”For a cyclical business or when faced with staffing needs for special projects, employers usually use ‘Supplemental Staffing‘ to handle their temporary staffing needs. Supplemental staffing refers to the provision of a temporary workforce to any employer to supplement their current workforce. Supplemental staffing may be needed to counter peak loads, special projects, planned and unplanned worker absences. Supplemental staffing may also be used for contractual health care staff in a hospital and other medical or life sciences institution settings.”] [efitems title=”Temporary Staffing” text=”There is a segment of the staffing industry that provides temporary help to employers. These kinds of placement companies are usually referred to as ‘Temporary Staffing‘ consultants. The temporary staffing providers provide personnel who are recruited, screened, trained and employed by the staffing service provider. Such temporary staff then get assigned to clients or organizations as needed by them on a temporary basis. The final employer (the client) may only assume supervisory responsibilities for the workers. The may also be some service arrangements wherein even the co-ordination or supervisory services may be provided by the temporary staffing provider.”] [efitems title=”Temp-to-Direct” text=”See ‘Temporary-to-Permanent‘ (Temp-to-Perm).”] [efitems title=”Temp-to-Hire” text=”See ‘Temporary-to-Permanent‘ (Temp-to-Perm).”] [efitems title=”Temporary-to-Permanent (Temp-to-Perm)” text=”‘Temporary-to-Permanent‘ as the term indicates is used for workers status transition from temporary employment status to permanent employment status. A Temp-to-Perm change in employment status usually happens when an employer feels that a temporary worker can fulfill a permanent job vacancy or may happen within a more formal employment service concept wherein a client proactively makes a traditional hiring decision during or after a temporary help assignment. Placement agencies would select only such candidate who may also be seeking traditional jobs to such temporary assignments in order for smooth transitions. Typically, fees for such temp-to-perm services are lesser as compared to standard placement fees. The placement agency may have a mutually agreed upon additional fee for such temp-to-perm shifts in status (some other terms used to describe the temp-to-perm process include: temp-to-direct, try-before-hire, temp-to-hire etc.).”] [efitems title=”Vendor Management / Supplier Management” text=”‘Vendor Management or Supplier Management‘ are terms used to describe a comprehensive approach by an organization for managing its relationship with various goods or services suppliers associated with them. In general, Vendor Management term comprises of both business practices and software that an organization may use to effectively manage the processes involved in handling their vendors. Thus, Vendor Management strives to streamline and regularize the interactions and processes involved between the stakeholders within the supply chain.”] [efitems title=”Vendor Management System (VMS)” text=”All companies big or small employ vendors. Thus, at a certain point, there is a need to streamline the interactions and processes between the vendor and the company. Thus, companies use a ‘Vendor Management System’ to regularize such interactions. Previously (before the advent of technology), companies used to have manual vendor management systems. However, nowadays, there are Internet-based or Web-based applications that can aid in the vendor management function. When it comes to staffing services, there are applications that a client may use to streamline their interactions with staffing vendors. These applications help the company procure staffing services (temporary as well as permanent placement). Generally automated vendor management systems today include order distribution, consolidated billing and automated reports generation facilities to aid vendor management.”] [efitems title=”Vendor on Premises (VOP)” text=”‘Vendor on Premise‘ term is used to refer to a placement agency or staffing company that is located within the premises of the employer. It’s only possible when there is an exclusive long-term contractual relationship between them. A vendor on premise usually also undertakes a supervisory role (if agreed on between the parties). A vendor on premise may also enter into a sub-contracting relationship(s) with other temporary help suppliers to fulfill the client’s needs. However, such relationships may be specified to the customer in advance.”] [/efaccordion]