Contingent Workforce Glossary Of Terms

Managing the contingent workforce has become a strategic imperative—but many enterprise leaders are being handed the responsibility without the roadmap.

This glossary is designed to help. Whether you're building a new program, refining an existing model, or sitting at the decision-making table for the first time, this resource demystifies the most common terms and models shaping contingent workforce strategy today.

Think of it as your translation tool—a way to cut through jargon, join conversations confidently, and make better-informed decisions about how to structure, scale, and evolve your workforce.

We’re seeing a growing trend:

• Talent acquisition teams, well-versed in permanent hiring, are now being asked to design and oversee contingent workforce programs.

• Procurement leaders are given cost-cutting KPIs—but not always the context to evaluate suppliers beyond pricing.

• HR, finance, and business unit leaders are expected to collaborate across unfamiliar territory—often without a shared language or clear governance model.

The result? Good intentions, but fragmented strategies—and missed opportunities.

This glossary supports the insights in our Comparative Guide to Contingent Workforce Management Models—a resource designed to help enterprise leaders understand the key models, challenge legacy thinking, and choose a model that’s fit for the future.

You can also view ourcomplete framework here: Contingent Workforce Programme Strategy & Management guide.

Glossary of Terms For Contingent Workforce Leaders

Applicant Tracking System (ATS): Software used to manage the recruitment process for permanent employees, sometimes adapted for contingent workers.

Change Management:
A structured approach to transitioning individuals, teams, and organisations from a current state to a desired future state. Essential when implementing new workforce models or technology systems to ensure adoption and minimise disruption.

Contingent Workforce: Non-permanent employees brought in to meet short-term or project-based needs, including contractors, freelancers, and statement of work professionals.

Contractor Management Outsourcing (CMO): A service where a third-party provider manages the administrative aspects of engaging contractors, including compliance, onboarding, and payroll.

Direct Sourcing: A talent acquisition strategy where organisations leverage their own brand and networks to attract contingent workers directly, rather than through staffing agencies.

Employer of Record (EOR): A third-party organisation that takes on the legal responsibilities of employing workers on behalf of another company, handling payroll, benefits, taxes, and compliance.

Freelance Management System (FMS): A technology platform designed to manage freelancers and independent contractors, often including functionality for sourcing, onboarding, work management, and payment.

Gig Economy: An economic environment where temporary, flexible jobs are commonplace, and organisations contract with independent workers for short-term engagements.

Governance Framework:
The policies, procedures, and controls that define how contingent workforce programs are managed, ensuring compliance, accountability, and strategic alignment.

Hybrid Programs: Contingent workforce models that combine elements of different approaches (such as MSP and Direct Sourcing) to create a customised solution.

Independent Contractor:
A self-employed individual who provides services to a business under terms specified in a contract. Unlike employees, they are not on payroll and manage their own tax and super obligations.

Labour Classification Compliance:
The process of correctly identifying workers as employees, contractors, or freelancers to ensure adherence to tax, employment, and legal requirements. Misclassification can lead to significant legal and financial penalties.

Managed Service Provider (MSP): A third-party organisation that manages a company's contingent workforce program, handling supplier management, order distribution, reporting, and consolidated billing.

Payrolling Services:
Third-party services that handle the administrative tasks of payroll, tax withholding, superannuation, and compliance for contingent workers, particularly when hired directly by the client.

Prime Contractor Model: A vendor-neutral approach where a single entity manages the entire contingent workforce program while allowing access to a diverse supplier ecosystem.

Procurement: The department or function responsible for obtaining goods and services for an organisation, often involved in contingent workforce acquisition.

Recruitment Process Outsourcing (RPO): A form of business process outsourcing where an employer transfers all or part of its recruitment activities to an external service provider.

Service Level Agreement (SLA):
A contractual agreement between a service provider and a client that defines the expected level of service, performance benchmarks, and penalties for non-compliance.

Statement of Work (SoW): A document that defines project-specific activities, deliverables, timelines, and payment terms for work to be performed by a contractor or service provider.

Talent Acquisition: The process of identifying, attracting, and onboarding skilled workers to meet organisational needs.

Talent Ecosystem:
A broader view of all the sources of talent available to an organisation—internal employees, alumni, freelancers, gig workers, contractors, and vendors—seen as interconnected rather than siloed.

Talent Marketplace:
A digital platform that connects employers directly with freelance or contingent talent, often powered by AI-based matching, ratings, and reviews (e.g. Upwork, Fiverr, or enterprise-grade versions like Toptal).

Total Talent Management: An integrated approach to workforce management that considers all types of workers (permanent, contingent, etc.) as part of a unified talent strategy.

Vendor Management System (VMS): Software that helps organisations manage and procure staffing services and contingent workers, automating processes like job distribution, candidate selection, time tracking, and billing.

Vendor Neutral: An approach where a service provider has no financial interest in which vendors or suppliers are used, ensuring unbiased selection based solely on performance and suitability.

Worker Classification:
The process of determining whether a worker should be considered an employee, contractor, or other classification under local labor laws and internal policies.

Workforce Agility:
The ability of an organisation to quickly adapt workforce capacity, skills, and structure in response to market demands or strategic shifts—often a key goal of contingent workforce programs.

Workforce Analytics: The use of data analysis techniques to understand and optimise workforce-related activities, processes, and trends.

Workforce Visibility: The ability to see and understand the composition, costs, and performance of all worker types across an organisation.