📚 2-Minute Outsourcing Glossary for Start-ups

Date updated: September 29, 2025

Navigating outsourcing terms for global hiring, faster.

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✅ Employer of Record (EOR)

A company that legally hires your global team on your behalf. You manage their daily work; the EOR handles contracts, payroll, compliance, and taxes abroad.
Use when: hiring talent overseas fast, without setting up a local entity.
Example: “Our Employer of Record (EOR) in the Philippines got us running in 2 weeks.”

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✅ Staff Leasing / Seat Leasing

A provider hires full-time staff who work only for you, usually seated in their office. You manage daily tasks, they handle HR and payroll.
Use when: you need a dedicated offshore team, without the legal entity setup.
Also called: Dedicated Team Leasing, Offshore Staffing.
Example: “We scaled our support team through seat leasing in Manila.”

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✅ Business Process Outsourcing (BPO)

A vendor owns the whole process and results (not just the staff). You pay for outcomes, not individual employees.
Use when: you want to outsource an entire function (e.g., customer support, data entry).
Example: “Our BPO partner runs our full helpdesk, hitting our CSAT goals.”

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✅ Professional Employer Organization (PEO)

A co-employment model where you and the PEO jointly employ staff in your own country.
Use when: hiring in your home market and sharing HR compliance.
Example: “Our US staff are co-employed through a PEO for local compliance.”

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✅ Staff Augmentation

Hiring external workers (contractors, freelancers, or leased staff) to temporarily expand your team. You manage their daily work.
Use when: you need temporary skills for a project.
Example: “We used staff augmentation to scale our dev team during product launch.”

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✅ Shared Service Center (SSC)

An internal team that supports multiple business units (e.g., finance, HR, IT) from a lower-cost location.
Use when: building in-house capability at lower cost.
Example: “Our SSC in Cebu supports global payroll processing.”

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✅ Managed Services

A vendor owns ongoing delivery and KPIs, not just the people.
Use when: you want them to run the process end-to-end, like BPO but often with tech automation.
Example: “We outsourced payroll as a managed service—fully automated.”

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✅ Outsourcing Model Comparison

The key decision between:

• EOR: fast global hiring, you manage work.

• Staff Leasing: offshore team you direct.

• BPO / Managed Service: vendor owns outcomes.

See our full EOR vs Staff Leasing vs BPO guide ↗

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✅ Global Employment Outsourcing (GEO)

Another term for EOR, often used by HR tech platforms.
Example: “We expanded to SEA using a GEO solution.”

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✅ Offshore vs Nearshore vs Onshore

• Offshore: faraway countries (e.g., US → Philippines).

• Nearshore: nearby regions (e.g., UK → Eastern Europe).

• Onshore: within your own country.

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