Offshore Staffing Glossary
Plain-English definitions for the terms you see when hiring offshore — staff augmentation, EOR, SOW, 1099 vs W-2, attrition, and more. Each entry explains what it means, when it matters, and how it compares to related concepts.
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- BenefitsBenefits are non-wage compensation provided to employees — health insurance, retirement contributions, paid time off, life and disability insurance, stipends, and statutory benefits — typically 20-35% of total compensation cost in the US and wildly variable internationally.
- BPO (Business Process Outsourcing)BPO (Business Process Outsourcing) is the practice of contracting an entire business function — support, payroll, accounting, moderation — to a third-party provider that runs it end-to-end on your behalf.
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- Dedicated TeamA dedicated team is a group of workers (typically offshore) who work exclusively for one client, integrated into that client's tools, processes, and culture — the opposite of shared-pool staffing where the vendor's workers rotate across multiple clients.
- Distributed TeamA distributed team is a group of workers spread across multiple locations — cities, countries, or timezones — collaborating via digital tools rather than a shared physical office.
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- Managed ServicesManaged services is a contracting model where a vendor takes responsibility for an outcome — not just supplying people — and manages the team, process, and delivery against an SLA or scope of work.
- MSA (Master Service Agreement)A Master Service Agreement (MSA) is the umbrella contract that governs the overall legal relationship between a client and a vendor — covering liability, IP, confidentiality, payment, and termination — so individual projects can be signed quickly via SOWs underneath it.
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- NDA (Non-Disclosure Agreement)A Non-Disclosure Agreement (NDA) is a contract that binds one or both parties to keep certain information confidential — used in hiring, vendor relationships, M&A discussions, and anywhere sensitive information has to be shared before a broader agreement is signed.
- NearshoreNearshore means hiring in a country geographically close to your own — for US companies, typically Latin America — with full or near-full timezone overlap, giving you more real-time collaboration than offshore at moderate cost savings.
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- OffshoreOffshore refers to hiring or delegating work to people in a country far from your headquarters, typically with a 6+ hour timezone difference — usually chosen for cost arbitrage and deep talent pools in markets like the Philippines, India, and Vietnam.
- OnboardingOnboarding is the structured process of integrating a new hire into your team — spanning paperwork, tooling setup, role context, relationship building, and ramping to productivity — typically the first 30-90 days of employment and the single biggest determinant of retention and performance.
- OnshoreOnshore means hiring within the same country as your business — for a US company, hiring US-based workers, whether in your own metro, remote across the country, or in lower-cost US regions.
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- PayrollPayroll is the process of calculating and paying employee compensation, withholding and remitting taxes, and administering deductions — along with the legal, regulatory, and reporting obligations that accompany paying workers.
- PEO (Professional Employer Organization)A PEO (Professional Employer Organization) is a US co-employment service that becomes the employer of record for tax and benefits purposes while you retain day-to-day management, giving small businesses access to Fortune-500-grade HR, payroll, and benefits.
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- Recruitment Process Outsourcing (RPO)RPO (Recruitment Process Outsourcing) is an arrangement where a provider operates some or all of your recruiting function as an extension of your team — handling sourcing, screening, coordination, and sometimes onboarding — billed as a retainer or per-hire.
- Remote WorkRemote work is any employment arrangement where workers do their job outside a central office — typically from home, a co-working space, or anywhere with internet access — enabled by digital collaboration tools and async-friendly processes.
- RetentionRetention is the percentage of employees who remain at a company over a given period — the inverse of attrition — and a leading indicator of operational health, hiring quality, and management effectiveness.
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- SOW (Statement of Work)A Statement of Work (SOW) is a document that defines exactly what a vendor will deliver — scope, timeline, deliverables, acceptance criteria, price — usually issued under the umbrella of a master agreement like an MSA.
- Staff AugmentationStaff augmentation is a hiring model where an external provider supplies skilled workers who embed into your existing team and report into your managers — you direct the work, they just supply the people.
- Staffing AgencyA staffing agency is a company that sources, vets, and places workers into client businesses — either temporarily (the agency is the employer of record) or permanently (the agency collects a placement fee and the client takes over employment).
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