How is the growing contingent workforce shaping the future of work?
How is the growing contingent workforce shaping the future of work?
Written by Foo See Yang, Managing Director and Country Head at PERSOLKELLY Singapore
Two years into the pandemic, we have seen how COVID-19 has drastically changed the way of work. To drive business continuity, organisations in Singapore remained flexible in adopting new operation models that might be seemingly unfeasible and out of the norm in the past. While some of these methods like empowering employees to thrive amid remote work are more commonly discussed, others like maintaining a rising contingent workforce are not.
Beyond remote or hybrid working, a major trend that has reshaped business models today is the growing contingent workforce – which includes workers who are on short/fixed-term contractual employment, freelancers, independent contractors, and workers who are outsourced from agencies.
In the past, organisations would view contingent workers as temporary workforce solutions only to be deployed when necessary, such as hiring a maternity cover. Concerns like equal compensation and job security for these temporary roles are some of the common barriers that hindered jobseekers from considering such roles too.
Today, these perceptions are changing. COVID-19 has accelerated the shortages in labour and skills, and the deployment of a contingent workforce is helping organisations gain a competitive edge by closing their talent gap swiftly, flexibly, and more conveniently.
In PERSOLKELLY’s 2022 APAC Workforce Insights Report surveying 1,112 employers from 12 markets across Asia-Pacific, we explored the changing mindsets of a contingent workforce post-COVID-19. Diving into the regional trends and motivations for adopting a contingent workforce, I’ll share more on why a contingent workforce is set to play a big role in shaping the future of work and expound on how organisations in the region can effectively manage such strategies.
The rise of contingent workforce across Asia Pacific
Faced with the pressure to close the widening talent gap in the region, organisations are starting to view the contingent workforce in a new light. Rather than seeing them as temporary solutions, more are recognising the unique benefits of deploying contingent workforce solutions. According to our report, flexibility in workforce planning, the ability to bring in niche skillsets to support short-term projects, the ease of filling roles without disrupting operations and having the extra time for employee evaluation before hiring them permanently are some of the many motivations for organisations to deploy a contingent workforce.
This rise is particularly apparent in Asia Pacific, with more than half of organisations (58%) hiring contingent workforce employees to better manage their workloads. Singapore is one of the countries with the highest adoption rates (60%), alongside Indonesia (67%), Hong Kong (66%) and Malaysia (64%). Moving forward, 40% of local organisations are looking to expand their contingent workforce to 15% and above in the next two years.
As the region’s economy and business outlook improve, I foresee an upward trend in the deployment of contingent workforce solutions as more organisations look to future-proof their workforce.
Remaining competitive with a contingent workforce
In Singapore, the COVID-19 pandemic has accelerated labour shortage challenges across industries, and with a mismatch in job supply and demand, more organisations are turning to contingent workers to fill specialised roles and drive business continuity.
There is a similar trend across the region – 55% of organisations in Asia Pacific cited the flexibility in upsizing and downsizing as the top reason for adopting a contingent workforce.
However, contingent workers offer advantages beyond managing labour shortages and catering to immediate staffing needs. As COVID-19 reshaped consumer needs and necessitated digital transformation across sectors, hiring contingent workers with specialised skills was also a top priority for most organisations. Across the region, we saw that 66% of organisations in Singapore have adopted a contingent workforce to help fill specialised roles as well as means to cope with the industries’ evolving demands.
While the world continues its road to COVID-19 recovery, building and managing a contingent workforce will be crucial in helping organisations remain resilient. This is especially relevant for organisations in the general administration, IT, accounting and finance sectors, as the skillsets across these sectors are among the most popular.
Effectively managing a contingent workforce
If you’re still unconvinced about the popularity of contingent workforce solutions in Singapore, I am sure you’ll be surprised to know that 97% of organisations in Singapore have reported being aware of where and how they can source for contingent workers. Beyond internal hiring, referrals and job advertisements, engaging recruitment agencies was also a popular choice due to the speed and efficiency that comes with sourcing from experts, while allowing organisations to focus on their core activities.
From jobseekers’ perspectives, we understand that there are concerns surrounding temporary job roles’ compensation and benefits. However, with the popularity of contingent workforce solutions comes a growing trend of more equivalent and fair compensation among part-time/contractual and full-time employees. In fact, 23% of local organisations offer better rewards scheme than permanent employees, while 35% offer the same rewards scheme as permanent employees.
With the ongoing war for talent, I urge organisations to reform their compensation and benefits for both its full-time employees and its contingent workforce to attract and retain the top talent.
Evolving mindsets in the way forward
With the changing industry demands accelerated by COVID-19, both job seekers and organisations are starting to recognise the positive benefits of the contingent workforce and are increasingly seeking temporary roles as a career option or sustainable workforce solution.
As the region continues to navigate economic uncertainties, we believe that adopting a contingent workforce will be paramount in helping organisations remain resilient in the way forward. I look forward to seeing more organisations deploy contingent workforce solutions to supplement their talent capabilities and fulfil manpower needs.
For more info on how PERSOLKELLY Singapore can assist you in building and managing your Contingent Workforce, email us at info_sg@persolkelly.com.