In the FTE model, you hire Full-Time Employees who work for 8.5 hours a day for 5/6 days a week and are entitled to benefits such as PF, Gratuity, and mediclaim coverage. These benefits might not be available to part-time or contract employees.
In a BPO, you may hire target-based employees who will work for a few hours at your office premises. Most companies hire full-time employees as they have to abide by the Data Protection Act. Hence, they maintain high standards for quality and data protection. They allow an employee to work with the client only when the employee has successfully completed all the training programs and is certified by the Code of Conduct and DPA assessments.
Hope this answers your questions.
Regards,