Navigating staffing and workforce management definitions can be complex. With terms like MSP, EOR, RPO and VMS used interchangeably (and sometimes incorrectly), it’s easy to get lost in industry jargon, especially when trying to compare solutions or evaluate providers. This guide offers clear, concise definitions for the most common terminology you’ll encounter when managing contingent labor, full-time hires, compliance, payroll or vendor relationships.
Whether you’re a procurement lead, HR professional, or workforce strategy consultant, this glossary will help you speak the same language as your providers and make more informed decisions.
Staffing and Workforce Management Terms
MSP – Managed Service Provider
A third-party organization that manages all or part of a company’s contingent workforce program, including supplier relationships, compliance, reporting and performance tracking. MSPs often oversee staffing vendors, use a Vendor Management System (VMS) and may offer strategic guidance.
Example: A large enterprise with dozens of temporary staffing vendors brings on an MSP to streamline costs and improve fill rates.
VMS – Vendor Management System
A cloud-based software platform used to manage the sourcing, engagement, and administration of contingent workers. It centralizes job requisitions, supplier communications, time tracking and invoicing.
Example: A European company hires U.S. staff through an EOR to manage local payroll and compliance without opening a U.S. entity.
EOR – Employer of Record
A company that legally employs a worker on behalf of another business. The EOR handles payroll, taxes, benefits and compliance, while the client manages day-to-day work.
Example: A tech company wants to hire a developer but doesn’t have the resources to . They use an EOR like Suna’s Flex EOR™.
RPO – Recruitment Process Outsourcing
A model where an external provider manages all or part of a company’s permanent hiring. RPOs can act as an extension of your internal HR team, managing requisitions, sourcing, screening, interviewing and reporting.
Example: A fast-scaling startup uses an RPO to support rapid, high-volume hiring without building a large internal TA team.
PEO – Professional Employer Organization
A co-employment model where the PEO shares employer responsibilities with the client. PEOs typically provide payroll, benefits, HR administration and compliance support for small-to-mid-sized businesses.
PEO vs EOR: PEOs require a shared employment relationship, while EORs take full legal responsibility.
VOP – Vendor On Premise / Vendor On Site
A staffing vendor or partner physically located at the client site to oversee the contingent workforce. VOPs provide real-time support, onboarding, issue resolution and engagement tracking.
Example: A warehouse hires hundreds of temp workers. A vendor on site manages daily check-ins, scheduling and replacements.
Vendor Neutral vs. Vendor Preferred
Vendor Neutral: All staffing suppliers are treated equally and compete for roles without favoritism.
Vendor Preferred: Certain vendors are prioritized for roles based on performance, tenure or specialization.
DH – Direct Hire
Refers to a candidate who is hired directly onto a company’s payroll, not as a contractor. Staffing firms can support direct hire searches, typically for critical, high-impact or hard-to-fill roles.
TTH – Temp to Hire (Temporary to Hire)
A model where an employee starts as a temporary worker with the possibility of converting to a permanent role based on performance and business needs.
IC – Independent Contractor
A self-employed individual who provides services to a business under a contract. ICs are not employees and are responsible for their own taxes, insurance and legal compliance.
Payrolling / Payroll Services
The process of placing pre-identified candidates onto a staffing partner’s payroll. Often used to reduce internal HR burdens while still accessing workers the company sourced directly.
Example: An employer finds a freelancer but doesn’t want to handle compliance, they outsource payrolling to a provider.
Co-Employment
An arrangement where two parties (ex. the client and a staffing firm or PEO) share responsibilities for the same worker. Typically applies in temp staffing or PEO models.
Contingent Workforce
A labor pool composed of non-permanent workers, including contractors, freelancers, temps, consultants and gig workers.
SLAs – Service Level Agreements
Performance benchmarks and commitments included in contracts with staffing vendors or MSPs. SLAs can include time-to-fill, quality of hire, compliance rates, etc.
SOW – Statement of Work
A contract that outlines the scope, deliverables, timelines and payment terms for a project or service engagement. Often used for consultants or project-based talent.
Why This Glossary Matters
Understanding staffing and workforce management definitions helps you:
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Choose the right partners (MSP vs. PEO vs. EOR)
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Evaluate RFPs and vendor proposals
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Ensure compliance (especially with ICs or international workers)
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Navigate software (VMS) effectively
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Align procurement, HR and finance teams
The business world is full of staffing and workforce management definitions and getting clarity is key to running efficient, compliant and cost-effective workforce programs. Whether you’re looking to partner with a Managed Service Provider (MSP), adopt an Employer of Record (EOR) model or just streamline your direct hire processes, knowing these terms gives you a leg up.