Agency — A staffing firm providing temporary, temporary to permanent placement or direct hire services.
Applicant — An individual seeking employment with a temporary help firm through an employment agency.
Assignment — A task or duty being performed by a contingent worker (e.g., a requisition for a temporary employee). The period of time that a temporary employee is working at an organization’s facility; however, extensions do not count as separate assignments.
Bill Rate – The amount the buyer of staffing services is expected to pay the agency inclusive of the pay, other expenses. (Known as agency mark-up)
Candidate — An applicant for a job who has been pre-qualified for temporary or full-time consideration. Also used to distinguish an individual from a pool of unqualified applicants.
Contingency Placement — The practice of charging a fee to either the applicant or the employer only after a successful referral of the applicant to the employer for employment.
Contractor — An individual hired to deliver a specified service as laid out in a contract. In some organizations this term is used interchangeably with “temporary employee” to refer to individuals employed by a temporary staffing firm, typically at a professional level.
Conversion Fee — Compensation fee paid to a temporary staffing firm for the loss of an employee when the staffing firm’s customer hires the temporary employee on a direct-hire basis. (Some full-service firms prefer to charge a “placement fee” rather than a conversion fee when this occurs. Many firms allow the conversion fee to be negotiated over a certain period on the temporary assignment.).
Day Labor — The provision of temporary workers to clients on a daily-pay, daily-availability basis, often on a multiple-worker basis. Day labor offices typically provide unskilled labor such as construction and may include transportation to and from the job site.
Direct Hire — A term commonly used to refer to services provided by a staffing agency related to helping an organization obtain an employee to work on their payroll. Compare this with a temporary staffing relationship, where the employee is typically working on the staffing firm’s payroll.
Fixed Rates – Uniform, fixed candidate staffing agency bill rates are pre-determined for each job title. Generally in conjunction with job title, description and geography.
Full Service — Historically, this refers to the provision of both temporary help and permanent placement by a single staffing agency. It is a complete set of staffing solutions that may also include executive search, career consulting, PEO arrangements, vendor management, on-premise responsibilities, contract employee management, and HR consulting.
Healthcare Staffing Services — Within the temporary help sector, this segment includes supplemental staffing to medical facilities (hospitals, nursing homes and outpatient clinics), as well as the provision of licensed nursing personnel (RNs, LVNs in the United States), trained (medical technologists), and unlicensed staff (home health aides, homemakers, personal assistants, etc.) to home healthcare agencies.
Human Capital — Human capital is the stock of competencies, knowledge, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value. It is an aggregate economic view of the human being acting within economies, which is an attempt to capture the social, biological, cultural and psychological complexity as they interact in explicit and/or economic transactions.
Independent Contractor (IC) — A self-employed individual performing services for a company under contract rather than as an employee, either on- or off-site. (Also referred to as freelancers, consultants, and, in the United States, “1099s,” which is the designation of the IRS form that companies use to report the money paid to independent contractors.) Unlike employees, independent contractors are free to perform their work as they see fit.
Industrial Staffing — The blue-collar segment of temporary help and permanent placement, which includes manufacturing personnel, factory workers, logistics/distribution staff, shipping and receiving clerks, materials handlers, and related occupations. “Light Industrial” often is used to refer to positions not requiring heavy labor, such as electronic assembly.
Information Technology (IT) — A sector of business services that includes IT staffing, IT solutions consulting and IT project management. These are typically high-end programmers, systems engineers and applications experts.
Job Order — Refers to a bona fide request to a staffing firm or employment agency to refer applicants for a specific position. A job order is the specific set of requirements set forth by an employer for an actual position.
Labor Contracting (Labor Leasing) — The provision of labor to a third party, usually providing limited or no benefits to the workers and for a limited time. Most commonly used to describe agricultural and construction contract labor arrangements. Sometimes used more broadly to include employee or staff leasing, temporary help, and other business services such as cleaning and security.
Markup — The percentage added to the temporary employee’s hourly pay rate to reach the bill rate. (For example, a $15.00 bill rate and a $10.00 pay rate would compute to a 50% markup.) The markup percentage includes all selling, recruiting, general, direct payroll and administrative costs associated with providing temporary help services, plus profit. In the temporary staffing industry, markups can vary even for a single supplier depending on the extent of direct recruiting, training, and other costs associated with providing a specific employee for a specific client assignment.
Max Bill Rates – Staffing agency bill rates that are capped at a maximum level by job title, agency, or geography. Candidate pay rates are determined by the agency. Also known as “not to exceed” bill rates.
Operating Margin — Operating margin is a measure of profitability that tells how much of revenue will eventually become profit for a company. The formula for calculating operating margin is Operating Income divided by Revenue. As such, Operating Margin is a measurement of what proportion of a company’s Revenue is left over, before taxes and other indirect costs. It typically excludes interest expense, nonrecurring items (such as accounting adjustments, legal judgments, or one-time transactions), and other income statement items not directly related to a company’s core business operations.
Outsourcing — Use of an outside business services vendor (and its supervised personnel), either on the customer’s premises or off-site at the vendor’s location, to perform a function or run a department that was previously staffed and supervised by the customer directly. (Sometimes, but not necessarily, limited to situations where some or all of the customer’s previous staff performing that function are hired by the outsourcing vendor.)
Partnering — Long-term commitments focusing on “win-win” relationships between customers and suppliers (or among suppliers) that add value to both parties through increased sales, reduced expenses, and/or greater productivity.
Pay Rate – Direct compensation paid by the staffing agency employer to its temporary employee.
Payrolling — As it relates to contingent staffing, payrolling is the provision of longer-term temporary workers to a customer where the workers have been recruited (possibly interviewed, tested and approved) by the customer but become, in effect, employees of the supplier providing the payroll services. This may occur in an instance when only the customer has the proper knowledge and experience to properly evaluate potential workers. Payrolling services are typically billed at significantly lower
markups than traditional temporary staffing because the staffing firm has not incurred any recruiting costs.
Per Diem — Daily living expenses paid to technical, travel nurses, or other skilled temporary or contract employees while they are employed at a distant location requiring housing away from home, or during a period while they are relocating. Can also refer to billing by the day (instead of hourly billing) or shorthand for nurses provided on a daily basis rather than a travel basis.
Perm — Short for permanent, usually permanent placement.
Permanent Placement — The bringing together of a job seeker and a prospective employer for the purpose of effecting a traditional employment relationship, for a fee. Also refers to the process of arranging such a relationship.
Placement — The result of effecting a traditional direct employment relationship, usually used to describe a successful referral by an employment agency. “Placement” generally implies the marketing of applicants to employers, rather than the recruitment of applicants for a specific employer position.
Placement Fee — The fee due to an agency when a referred candidate is hired by a direct employer, typically in the range of 15% to 35% of annual salary. Fee calculations are usually based on salary — one month’s salary, a fixed percentage (e.g., 20% of annual salary), or a percentage that increases with the salary level (e.g., 1% per thousand).
Placement Services — Services provided by a staffing service to an organization to locate a properly skilled employee with the ultimate goal of a traditional direct hire employer-employee relationship with the client; may include “temp-to-perm” services.
Recruiting — The process of locating and screening a candidate or candidates for an employer as part of a search assignment. Also used to describe overall general efforts to bring in temporary employees. “Recruitment” generally implies the search for candidates who meet specific client specifications rather than the marketing of available applicants to employers.
Staffing Company / Staffing Agency / Staffing Firm — A company providing staffing services.
Staffing Industry — A broad grouping of staffing- and employment-related services where a staffing firm, supplier, broker, agent, or consultant provides employment or help supply services to an organization that involves its own employees or the client’s potential or previous employees. Major sectors of the staffing industry include temporary staffing, place and search, PEO/staff leasing and outplacement.
Staffing Services — A generic term that refers to a wide range of employment services, including temporary staffing, employee leasing/PEO services, direct hire/placement services or outplacement.
Temporary Employee (“Temporary”) — An employee who performs work for an organization with the expectation that the work will be for a fixed duration. Temporary employees may be hired directly by the employer or sourced through a staffing company and work fulfilling client assignments. May also refer to temporary workers from an internal pool employed directly by an organization for an intentionally limited time period.
Temporary Placement — A term that is often used to distinguish between the temporary help services of a staffing firm and its “permanent placement” activities. In a legal sense, the term may be used incorrectly, because “placement” refers to affecting an employment relationship, and providing a temporary worker involves the provision of a service by a person already employed by a temporary firm.
Temporary Staffing — A segment of the staffing industry that provides temporary help and related staffing services to businesses and other clients. The temporary staff provided are recruited, screened, possibly trained, and employed by the temporary staffing provider, then assigned to client organizations. Although the customer typically assumes supervisory responsibility for these workers, in certain service arrangements coordination or supervisory functions may be provided by the supplier.
Temporary-to-Permanent (Temp-to-Perm) — Transition of a temporary worker to permanent employment status. This may be on an ad hoc reactive basis where an employer finds that a temporary worker can fulfill a permanent job vacancy or a more formal employment service concept where a client company proactively plans to make a traditional hiring decision during or after a temporary help assignment. In a “temp-to-perm” situation, only temporary workers who are also seeking a similar type of traditional job would be sent on the assignment.