Terminology

While most service delivery model language is well understood within parts of the industry, the reality is that it can mean different things to different providers.

For employers, HR and procurement teams, it can quickly become a confusing mix of labels and definitions that aren’t always used consistently - even when they’re describing similar approaches.

To help you navigate and create a lexicon of the common terms that are used, we’ve developed a Service Delivery Model 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.

Term	Definition
Managed Service Provider (MSP)	A Managed Service Provider is a third-party organisation 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 organisation receives the best talent in a timely and cost-effective manner. This approach centralises 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 organisation transfers all or part of its recruitment activities to an external service provider. This approach allows companies to leverage the expertise and resources of specialised 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 organisations 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 organisation 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 organisations 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 organisations 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 specialised 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 organisation. 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 specialised capabilities of BPO providers.
Functional Service Provider (FSP)	A Functional Service Provider (FSP) is a third-party organisation that offers specialised 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 organisation 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.
Contractor Management/Contractor Payroll Solutions	A Contractor management 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.
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.