Contingent & Global Employment Glossary
Contingent and global employment covers the ways companies engage talent beyond the permanent, on-payroll employee — contractors, staff augmentation, and the Employer-of-Record and PEO models that make cross-border hiring possible. This topic gathers those terms, each defined on its own page.
Two forces drive this vocabulary: flexibility and reach. Contingent models — independent contractors, contract-to-hire, staff augmentation — let organisations scale capacity up and down without permanent headcount. Global-employment models — Employer of Record, professional employer organisations, global employment organisations — let a company legally employ people in countries where it has no entity. Getting the distinctions right matters, because misclassifying a worker or choosing the wrong model carries real legal and tax risk.
For companies building or scaling a presence in India, these models are often the fastest compliant route to talent before a full entity exists. The terms below give talent and operations leaders a shared vocabulary for flexible and cross-border employment.
18 terms in this topic · see all 277 in the A–Z glossary →
Terms 18
1099 Worker A 1099 worker is a US term for an independent contractor who is paid without tax withholding and reports income on a Form 1099 rather than a W-2. They run their own business, control how the work is done, and are not entitled to employee benefits or employment protections. Read Agent of Record AOR An Agent of Record (AOR) is a third party that manages the engagement, contracting, and payment of independent contractors on a company’s behalf, taking on the compliance risk of classifying and paying non-employees correctly. It is the contractor-facing counterpart to an Employer of Record, which handles full-time employees. Read Co-employment Co-employment is an arrangement where two organisations share legal employer responsibilities for the same workers — typically a client that directs the work and a provider that handles payroll, benefits, and compliance. It is the model that underpins Professional Employer Organizations and, in a related form, staffing relationships. Read Contingent Workforce The contingent workforce is the non-permanent portion of an organisation’s talent — contractors, freelancers, consultants, and gig workers — engaged for flexibility and specialist skills without adding permanent headcount. It expands and contracts with demand and sits outside the traditional full-time employment relationship. Read Contract-to-Hire Contract-to-hire is an arrangement in which a worker is engaged on a fixed-term contract with the option for the employer to convert them to a permanent employee later. It lets both sides trial the fit before committing to permanent employment. Read Direct Hire A direct hire is a permanent employee brought onto a company’s own payroll, hired directly into a role rather than engaged through a staffing agency’s payroll, a contract, or a temp-to-perm arrangement. The person becomes a full employee of the organisation from day one, with its benefits, tenure, and obligations. Read Employer of Record EOR An Employer of Record (EOR) is a third party that legally employs workers on a company’s behalf in a country where the company has no legal entity, taking on payroll, tax, benefits, and employment compliance while the client directs the day-to-day work. It lets a company hire in a market quickly without first setting up its own entity. Read Full-Time Equivalent FTE A Full-Time Equivalent (FTE) is a unit that expresses a workforce’s size in terms of full-time workloads, where one FTE equals one person working full-time hours. Two half-time employees together count as one FTE, letting companies compare and plan headcount consistently regardless of part-time or contract mixes. Read Gig Economy The gig economy is a labour market built on short-term, flexible, and freelance work — often mediated by digital platforms — rather than permanent employment. Gig workers are typically engaged as independent contractors, paid per task or project, without the benefits and security of full-time roles. Read Global Employment Organization GEO A Global Employment Organization (GEO) is a provider that enables a company to employ workers across multiple countries compliantly, typically by acting as, or coordinating, the local employer of record in each market. It is the mechanism behind hiring an international workforce without setting up an entity in every country. Read Independent Contractor An independent contractor is a self-employed individual or business that provides services to a client under a contract, controlling how the work is done rather than being directed as an employee. Contractors are paid on invoice, handle their own taxes and benefits, and are not entitled to employee protections. Read Managed Service Provider MSP A Managed Service Provider (MSP) is a company that manages an organisation’s contingent workforce programme end to end — sourcing, engaging, and administering temporary and contract workers across multiple staffing suppliers. It acts as a single point of control for a client’s external labour, usually working through a Vendor Management System (VMS). Read Misclassification Misclassification is treating a worker as an independent contractor when the law considers them an employee (or vice versa), usually to avoid taxes, benefits, and statutory obligations. It exposes the company to back-taxes, penalties, unpaid benefit claims, and reputational damage. Read Professional Employer Organization PEO A Professional Employer Organization (PEO) is a firm that co-employs a company’s staff, sharing employer responsibilities such as payroll, benefits, and HR compliance while the client retains its own legal entity and control over the work. Because it co-employs rather than fully employs, a PEO requires the client to have an entity in the country. Read Staff Augmentation Staff augmentation adds external professionals to an in-house team on a flexible, often contract, basis to meet capacity or skill gaps without adding permanent headcount. The augmented staff work under the client’s direction, integrated into existing teams rather than delivering a separate outsourced scope. Read Statement of Work SOW A Statement of Work (SOW) is a document that defines the specific scope, deliverables, timeline, and payment terms of a project or engagement between a client and a provider. It turns a broad services agreement into a concrete, measurable commitment for a particular piece of work. Read Vendor Management System VMS A Vendor Management System (VMS) is software used by an organisation to manage its contingent workforce and the staffing suppliers that provide it. It centralises requisitions, candidate submissions, timesheets, invoicing, and compliance for temporary and contract labour in one platform. Read W-2 Employee A W-2 employee is a US term for a worker who is formally employed by a company, with income tax and payroll taxes withheld from their pay and reported on a Form W-2 each year. Unlike a 1099 contractor, a W-2 employee is entitled to benefits, employment protections, and employer-paid payroll contributions. ReadFrequently asked questions
What is an Employer of Record (EOR)?
An Employer of Record legally employs workers on a company’s behalf in a country where it has no entity, handling payroll, tax, benefits, and compliance while the client directs the day-to-day work. It lets a company hire abroad without incorporating first.
What is the difference between an EOR and a PEO?
An EOR is the full legal employer in a country where you have no entity. A PEO co-employs staff alongside your existing legal entity, sharing employer responsibilities. You need an entity for a PEO; you do not for an EOR.
What is the difference between staff augmentation and outsourcing?
Staff augmentation adds external people into your team, under your direction, to fill capacity or skill gaps. Outsourcing hands an entire function or deliverable to a vendor who manages it. One extends your team; the other delegates the work.
What is worker misclassification?
Misclassification is wrongly treating an employee as an independent contractor (or vice versa), usually to save on tax and benefits. It carries significant legal and financial penalties, which is why the contractor-versus-employee distinction matters.