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The accounting basis that brings items to account as they are earned or incurred (and not as cash is received or paid) and includes them in financial statements in the related accounting period. Accrualbased accounting can provide improved visibility into a company’s cash flow and financing requirements. For example, companies that “draw down” from purchase orders as services are used can use accrual-based accounting to help understand how that usage is impacting the company’s finances overall.

Administrative Fee

The additional fee charged to a client (subscriber) by a an MSP or a VMS serviceproviding organization to cover selling, general and administrative costs for administering the contingent worker program (defined as “Operating Costs” in Europe) over and above the costs of contingent worker salary, taxes and benefits provided. This fee is usually expressed as a percent of bill rate and often, but not always, passed on to the suppliers within the program.

Administrative Services Organization (ASO)

An ASO is similar to a PEO in that it assumes the risks and rewards of workers’ compensation insurance, and provides healthcare coverage to client employees, but it differs from a PEO in that it does not serve as co-employer of the workers.

Affirmative Action

Legal policy of favoring workers who are members of a disadvantaged group that currently suffers or historically has suffered from discrimination within a culture in securing employment or a promotion. Its intention is to improve their chances in securing employment or a promotion. Used in many countries in one form or another, but most notably in South Africa as a remedy to balance the workplace following many years of apartheid. Known as “positive discrimination” in the UK and “employment equity” in Canada, affirmative action may be used by governments to address issues of inequality relating to race, color, religion, sex or national origin.


A shorthand term that has come to apply to any staffing firm providing temporary or direct hire services. (See also: Employment Agency (Private).)

Agency Contractor

A term used to refer to temporary employees provided by a staffing agency. Often used in contrast to independent contractors. (See also: Temporary Employee.)

Agency Model MSP

Refers to an alternative contractual arrangement for the supply of MSP found in those markets where having the MSP act as Principal is not lawful. In certain markets (i.e. France, Germany and Italy), legislation prevents second tier suppliers from supplying through an intermediary as local agency license requirements determines that the license holder contracts directly with the end user. Under the Agency Model, the MSP sits beside the supply chain rather than in the middle of it providing administrative services. The hirer has to continue to contract directly with individual supplying staffing companies, but the MSP administers those contracts on their behalf. Administrative services provided by the MSP may also include supplier selection, negotiating and standardizing contracts, processing requisitions, management of time reporting, compliance services, and managing invoicing requirements such as consolidated invoicing and invoice tracking. It will not include billing second tier staffing suppliers.(See also: Principal Model MSP and Margin only Model MSP.)

Agency Work

Preferred terminology used by the World Employment Confederation (WEC) and by certain European social partners to describe temporary staffing provided through a staffing company. Hence “Agency Work Business” (AWB) and Agency Worker. There is a contractual relationship between the Agency Worker and the Employment Business and the Agency Worker is paid by the Employment Business. There is no contractual relationship between the Agency Worker and the end user client. Direction and control of the Agency Worker is exclusively the responsibility of the user client.

Agency Worker

A UK legal term used to refer to an individual who is engaged by an Employment Business(see definition) to perform labor for one or more of the Employment Business’ clients. (See also: Agency Work)

Agency Workers Regulations (AWR)

A UK law, effective Oct. 1, 2011, in order that UK legislation complies with the EUI Agency Workers Directive (See: “Agency Workers Directive). The AWR provides temporaries supplied through a staffing agency with entitlement to the same basic employment and working conditions as if they had been recruited directly, if and when they complete a qualifying period of 12 weeks in the same job.(See also: “Qualifying Clock.”). The AWR also grants certain rights to such temporary workers from the first day of their assignment such as access to facilities (i.e. canteen) and information on job vacancies.

Agency Workers’ Directive (AWD)

A European Union Directive agreed upon in November 2008 that seeks to improve the quality of temporary agency work by applying the principle of non-discrimination and to address unnecessary restrictions and prohibitions on the use of temporary agency work in the European Union. Under the Directive, an agency worker will be entitled to equal treatment (at least the basic working and employment conditions that would apply to the workers concerned if they had been recruited directly by that undertaking to occupy the same job. “Equal treatment” relates only to basic working and employment conditions of temporary agency workers (e.g., pay, working time) and does not affect the employment status of temporary workers. As with all EU Directives, the purpose of the AWD is to harmonize the law across the common market. Though it was originally proposed in 2002, the British government and others blocked its enactment until 2008. However, the UK government was successful in negotiating a derogation whereby equal treatment will only apply in the UK after 12 weeks in a given temporary job. All EU member states were obliged to amend laws and regulations to comply with the AWD by Dec. 5, 2011; however, there are examples of non-compliance in certain countries.

Agent of Record

A term used in the US to describe a service whereby the provider acts as a third-party intermediary between a staffing firm or client and one or more independent contractors, administering the back-office functions related to engaging independent contractors, including payroll and government reporting requirements. It is often used in conjunction with ICEC (Independent Contractor Evaluation and Compliance) services.


A business relationship between a supplier and a customer, or among two or more suppliers, usually involving joint product development or joint marketing efforts.

Alternative Staffing

A very imprecise term that describes the gamut of nontraditional work arrangements available to organizations other than regular, direct and full-time employment. Alternative staffing arrangements include temporary help, leased worker arrangements, home-based work and contract employment. Alternative staffing arrangements may be made through a third-party contractor or directly negotiated between an employer and an employee.(See also: Atypical Employment.)

Ancillary HR Services

This includes all other workforce related third-party services not captured elsewhere in the Workforce Solutions Ecosystem. Examples include retirement services, compensation and benefits, employee motivation and engagement, performance management and relocation services to name a few.


An individual seeking employment (with a temporary help firm, technical services firm, through an employment agency or directly with a company). In most countries, after hiring, a temporary worker is regarded as an employee, not an applicant, of the temporary help company.

Applicant Paid Fee (APF)

The applicant pays the fee to the employment agency upon placement in a permanent job. APF business was common in the early years of permanent placement, but now accounts for a very small portion of total placement revenue.(See also: Employer Paid Fee) In most European countries, applicant paid fees are legally forbidden for the assignment of temporary workers, except in case of additional training or for CV-drafting services.

Applicant Tracking System (ATS)

A service segment of the Talent Acquisition Technology Industry. An ATS is a software application that enables the electronic handling of corporate recruitment needs. Most incorporate a company website, enabling companies to post jobs onto their own website, as a way to attract candidates. The ATS solutions store these candidate data inside a database to enable effective searching, filtering and routing of applications. Certain vendors use a different description for ATS software, such as talent management software (TMS), candidate management system (CMS) or recruitment management system (RMS). ATS is often used to underpin a Recruitment Process Outsourcing program. There is a separate type of ATS which acts as a module within a staffing firm front-office software solution, however these products are normally sold by different vendors with functionality to meet the workflow requirements of staffing firms rather than corporate recruiters.

Approved Supplier List (ASL)

A Contingent Workforce Sourcing Model (see definition) in which the provision of a contingent workforce, in whole or in part, is exclusively granted to a limited, but more than one, number of staffing providers, at specified conditions. Also known as a Preferred Supplier List (PSL).

Artificial Intelligence (AI)

Refers to computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making and translation between languages. AI is enabled through cognitive computing which is the simulation of human thought processes in a computerized model. Cognitive computing involves self-learning systems that use data mining, pattern recognition and natural language processing to mimic the way the human brain works. The development of AI alongside complementary technical advances such as robotics and big data is forecast to have a profound development on the future of work with many traditional occupations threatened by AI while, at the same time, new occupations will emerge.


The act of deploying a temporary employee on a specific work-engagement.


A task or duty being performed by a contingent worker (i.e., a requisition for a temp, or each onboarded consultant associated with a consulting engagement). Assignment may also refer to the period of time that a temporary employee is working at an organization’s facility; however, change orders such as extensions, do not count as separate assignments. Assignment length is regulated in many European markets. (See also: Place.)

Atypical Employment

Work that is other than full-time and permanent, including part-time, evening and weekend work, fixed-term work, temporary or sub-contract home-based work, telework (telecommuting in the US) and outwork. (See also: Alternative Staffing.)

AUG (Arbeitnehmerüberlassungsgesetz)

AUG is the German employment agencies law that requires each separately incorporated entity that wishes to lease employees to obtain an AUG license from the appropriate state labor office. Licenses are valid for one year and may be renewed. Many German end user hirers will only contract with foreign agencies that are in possession of an AUG license. However, the provision of independent contractors falls outside the scope of the AUG and a number of foreign staffing firms focus on this area of provision in order to avoid the licensing requirements. Failure to follow the licensing rules correctly exposes the agency to fines and criminal proceedings while end users will find that an employee who works for an unlicensed agency, and not as a true independent contractor, will be deemed to be the hirer’s employee at the point in time they started to work for the hirer.
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