# Recruitment & staffing glossary — LAUNCH. Source: https://launch-rec.com/glossary Plain-English definitions of the terms recruitment and staffing founders meet in their first year. ## Advance rate Category: Funding. Market: US and UK. The percentage of an invoice a funder releases immediately. The remainder is held back as a reserve until the client pays. Full definition: https://launch-rec.com/glossary/advance-rate ## Bad debt Category: Funding. Market: US and UK. Invoiced revenue that will never be collected. In contract staffing it is doubly painful because the contractor has already been paid. Full definition: https://launch-rec.com/glossary/bad-debt ## Bill rate Category: Commercials. Market: US and UK. The hourly rate an agency charges its client for a contractor. It has to cover the pay rate, employment burden, funding cost and the agency's margin. Full definition: https://launch-rec.com/glossary/bill-rate ## Cash conversion cycle Category: Funding. Market: US and UK. The total time between paying a contractor and collecting the matching client payment. In contract staffing it is commonly around 52 days. Full definition: https://launch-rec.com/glossary/cash-conversion-cycle ## Co-employment Category: Compliance. Market: US. A situation where both the staffing agency and the client are treated as employers of the same worker, sharing legal obligations and liabilities. Full definition: https://launch-rec.com/glossary/co-employment ## Compliance pack Category: Operations. Market: US and UK. The bundle of documents proving a worker is eligible, vetted and insured: right to work, references, certifications, insurance and signed terms. Full definition: https://launch-rec.com/glossary/compliance-pack ## Concentration limit Category: Funding. Market: US and UK. A cap on how much of your funded ledger can sit with one client, commonly 25% to 35%. Invoices above the cap are funded at a lower rate or not at all. Full definition: https://launch-rec.com/glossary/concentration-limit ## Credentialing Category: Operations. Market: US. Verifying and maintaining a clinician's licences, certifications, immunisations and background checks so they can legally work a facility shift. Full definition: https://launch-rec.com/glossary/credentialing ## DSO Category: Funding. Market: US and UK. Days sales outstanding: the average number of days between invoicing a client and being paid. Every extra day is cash you have to fund. Full definition: https://launch-rec.com/glossary/dso ## Earn-out Category: Ownership. Market: US and UK. Part of a sale price paid later, conditional on the business hitting agreed performance targets after completion. Full definition: https://launch-rec.com/glossary/earn-out ## Employment burden Category: Commercials. Market: US and UK. Every employer cost on top of the pay rate: payroll taxes, workers' compensation, holiday accrual and benefits. Typically 12% to 16% in the US. Full definition: https://launch-rec.com/glossary/employment-burden ## EOR Category: Compliance. Market: US and UK. An employer of record legally employs a worker on your behalf in a jurisdiction where you have no entity, handling payroll, tax and compliance. Full definition: https://launch-rec.com/glossary/eor ## Equity stake Category: Ownership. Market: US and UK. The share of a launch business owned by each party. In a backed recruitment launch it defines control, exit proceeds and who decides what. Full definition: https://launch-rec.com/glossary/equity-stake ## Fill rate Category: Operations. Market: US and UK. The percentage of client requisitions you actually fill. It is the single metric that decides whether you keep a contract at renewal. Full definition: https://launch-rec.com/glossary/fill-rate ## Gross margin Category: Commercials. Market: US and UK. The share of the bill rate left after paying the contractor and their employment burden. It is the money the agency actually runs on. Full definition: https://launch-rec.com/glossary/gross-margin ## Invoice factoring Category: Funding. Market: US and UK. Selling your unpaid invoices to a funder at a discount for immediate cash. The funder advances most of the invoice value, then pays the balance on settlement. Full definition: https://launch-rec.com/glossary/invoice-factoring ## IR35 Category: Compliance. Market: UK. UK off-payroll working rules that decide whether a contractor working through their own company should be taxed as an employee. Full definition: https://launch-rec.com/glossary/ir35 ## Markup Category: Commercials. Market: US and UK. The percentage added to a contractor's pay rate to reach the bill rate. Clients negotiate in markup; funders and investors think in margin. Full definition: https://launch-rec.com/glossary/markup ## MSP Category: Operations. Market: US and UK. A managed service provider runs a client's contingent workforce programme and sits between the client and its supply chain of staffing agencies. Full definition: https://launch-rec.com/glossary/msp ## Nurse staffing licence Category: Compliance. Market: US. A state-issued licence or registration required to supply nursing and allied healthcare staff. Rules, fees and bonding requirements differ by state. Full definition: https://launch-rec.com/glossary/nurse-staffing-licence ## Pay rate Category: Commercials. Market: US and UK. The hourly rate paid to the contractor before employer taxes and insurance. It is the input to every bill rate calculation, not the cost of employing them. Full definition: https://launch-rec.com/glossary/pay-rate ## PAYE Category: Compliance. Market: UK. Pay As You Earn: the UK system for deducting income tax and National Insurance at source. The default for agency temps employed directly. Full definition: https://launch-rec.com/glossary/paye ## Payroll funding Category: Funding. Market: US and UK. A facility that pays your contractors each week and is repaid when your client settles the invoice, removing the cash gap from the agency's balance sheet. Full definition: https://launch-rec.com/glossary/payroll-funding ## PEO Category: Compliance. Market: US. A professional employer organisation co-employs your internal staff, providing payroll, benefits and HR infrastructure under a shared-employment model. Full definition: https://launch-rec.com/glossary/peo ## Permanent fee Category: Commercials. Market: US and UK. A one-off fee for a permanent hire, usually 15% to 25% of first-year salary, billed on start date and subject to a rebate period. Full definition: https://launch-rec.com/glossary/perm-fee ## Rebate period Category: Commercials. Market: US and UK. The window after a permanent placement in which you refund part of the fee if the hire leaves, commonly tapering over eight to twelve weeks. Full definition: https://launch-rec.com/glossary/rebate-period ## Recourse Category: Funding. Market: US and UK. Who carries the loss when a client does not pay. Under recourse funding the agency buys the debt back; under non-recourse the funder absorbs approved credit losses. Full definition: https://launch-rec.com/glossary/recourse ## Redeployment rate Category: Operations. Market: US and UK. The share of contractors you place again when an assignment ends. It is the cheapest growth lever a contract desk has. Full definition: https://launch-rec.com/glossary/redeployment-rate ## Shareholders' agreement Category: Ownership. Market: US and UK. The contract between owners setting out control, decision rights, share transfers and what happens when someone leaves or the business is sold. Full definition: https://launch-rec.com/glossary/shareholders-agreement ## Spread Category: Commercials. Market: US and UK. The cash difference between bill rate and burdened pay rate, quoted in currency per hour rather than as a percentage. Full definition: https://launch-rec.com/glossary/spread ## State registration Category: Compliance. Market: US. Registering with a state to withhold payroll taxes and, in some states, to operate as a staffing agency. Required where your worker performs the work. Full definition: https://launch-rec.com/glossary/state-registration ## Time to fill Category: Operations. Market: US and UK. Elapsed days from a client raising a requisition to a candidate starting. In contract staffing the winning window is often hours, not days. Full definition: https://launch-rec.com/glossary/time-to-fill ## Umbrella company Category: Compliance. Market: UK. A UK payroll intermediary that employs contractors and processes PAYE on their behalf, used widely for inside-IR35 assignments. Full definition: https://launch-rec.com/glossary/umbrella-company ## Valuation multiple Category: Ownership. Market: US and UK. The figure applied to profit to value a recruitment business — typically 4x to 7x EBIT, higher for contract-heavy, recurring books. Full definition: https://launch-rec.com/glossary/valuation-multiple ## Vesting Category: Ownership. Market: US and UK. Earning equity over time rather than receiving it all on day one, usually across three or four years with a one-year cliff. Full definition: https://launch-rec.com/glossary/vesting ## VMS Category: Operations. Market: US and UK. The software an MSP or enterprise client uses to distribute requisitions, collect timesheets and process agency invoices. Full definition: https://launch-rec.com/glossary/vms ## Worker classification Category: Compliance. Market: US and UK. Whether a worker is an employee or an independent contractor in law. Getting it wrong creates back taxes, penalties and client indemnity claims. Full definition: https://launch-rec.com/glossary/worker-classification ## Workers' compensation Category: Compliance. Market: US. Mandatory insurance covering workplace injury. Premiums are set by state and job class code, and form a large part of employment burden in manual niches. Full definition: https://launch-rec.com/glossary/workers-compensation ## Working capital Category: Funding. Market: US and UK. The cash an agency must hold to pay contractors before clients pay invoices. It is the real startup cost of a contract staffing business. Full definition: https://launch-rec.com/glossary/working-capital