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6 Commonly Confused Contingent Workforce Management Terms

Jan 8, 2015 11:42:46 AM

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Fred Astaire and Ginger Rogers famously sung the George and Ira Gershwin song, “Let’s Call the Whole Thing Off” in the 1937 classic film, Shall We Dance. You know the one: “You say ‘tomato’ and I say ‘to-mah-to’ – you say potato and I say ‘po-tah-to’, let’s call the whole thing off.” Not much has changed with respect to confusion about certain terms since 1937, although today, we’re singing about more than tubers and nightshades. Today, the business community, heavily engaged in cutting edge workforce management practices, has a whole lexicon of terms that didn’t even exist when Fred and Ginger taught us how get along nicely while dancing on roller skates. 

The problem with failing to achieve a standard lexicon as an industry is that it makes it more difficult for consumers of workforce management services to compare and contrast the providers offering services. To put it more simply, apples-to-apples comparisons are invalid if one group considers a pear to be another type of apple. To get a grip on this problem, nextSource turns to the most exhaustive list of definitions available and urges others in the space to follow suit.

The Staffing Industry Analysts put together a very comprehensive list of terms and definitions in their Global Lexicon of Contingent Workforce-Related Terms. Their exhaustive document is a fantastic resource and it wouldn’t trouble us at all if it were adopted and embraced by every player in the industry – both on the provider side and customer side. That said, even in spite of the SIA’s efforts, there will likely still be different perspectives on what many industry terms mean, depending on who you talk to.  Here are some of the most frequently misused, debated, or otherwise flexible terms used in the industry today:

Contractor vs. Independent Contractor

The term ‘contractor’ is typically a synonym for a temporary worker. This should not be confused or conflated with ‘independent contractor’ or IC. The IC is a specific designation with regulatory compliance ramifications. Many companies run afoul of the IRS rules when they try to claim regular temp workers/contractors (or other workers) as ICs. 

Payroller vs. Employer of Record

These two terms, often used interchangeably, have a distinct difference. While the payroller typically only handles the compensation portion of the HR process, the EOR is much closer to the Professional Employer Organization or PEO model where the entirety of a company’s HR function – both compensatory and benefits – are outsourced to a provider. In essence, all EORs are payrollers, but not all payrollers are EORs.

Staff Augmentation vs. Staff Supplementation

These two terms are almost always used interchangeably. However, they are not the same thing. Staff augmentation is a strategy used to staff a project and respond to business objectives with the use of contingent labor. Typically, augmentation means evaluating existing staff to identify where skills gaps exist and then filling the gaps. On the other hand, staff supplementation is the practice of providing temporary workers to a client company to supplement the current workforce during peak periods, for special projects, or during planned and unplanned worker absences. 

The above terms are just a few examples of commonly confused and misused terms in the contingent workforce industry. The SIA Lexicon document mentioned above includes hundreds of others, and every practitioner should take the time to review and properly understand the nuances between various terms. After all, we don’t have the luxury of “calling the whole thing off” when it comes to doing business.

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