Asia's rising ‘gig’ economy is creating a challenge for HR

Lack of legal guidelines adds complexity to managing the growing contingent workforce

HR managers and politicians are increasingly recognising the need to adapt human capital policies to manage contingent workers. But are they moving fast enough?

In Singapore, the government is putting plans in place to retrain citizens, as well as frameworks to deal with the various aspects of freelance working arrangements.

Roffey Park Asia Pacific researcher Saradevi Gopal Prabhakaran said several government agencies in Singapore have adopted guidelines for organisations hiring contract workers, entitling them to statutory leave benefits, with more plans in the pipeline.

“Contract workers make up about 11 per cent of the resident workforce, so the fact that the government is moving to provide some form of protection for them is a good sign,” she said.

Singapore University of Technology and Design's (SUTD) professor of media and communication, Dr Lim Sun Sun, said there has been considerable government investment in adult education so that people can learn new skills as the workplace transforms and as industries change in response to digital disruption.

One example is Singapore's SkillsFuture programme, where government agencies offer training for citizens to learn new skills for contract work or short-term projects demanded by multiple clients.

And with more people wanting to be gig workers or freelancers, Dr Lim said HR professionals would have to be proactive about managing change within organisations.

“Those who don't have the disposition to adapt quickly to this kind of rapid industry transformation will unfortunately be left out.

“But those who are able to be more adaptable will probably require support from the HR department in terms of preparing people for change, and making the workplace much more conducive to it,” said Dr Lim.

Cost-cutting measures, retrenchments and a slowdown in both regional and global economies have contributed to the rise of professionals opting for part-time arrangements, often not through choice.

Sam Haggag, ManpowerGroup country manager in Malaysia and Indonesia, said other factors lending to the ‘gig economy’ phenomenon include a large number of millennials in the workforce, new technology and lengthy commuting times due to congestion or poor infrastructure.

He cited the company's Global Candidate Preferences Survey, where results showed candidates ranking flexibility as an important factor in career decisions.

“In many countries, this factor has risen between 20 to 30 per cent in importance in just one year,” he said.

The pool of contingent workers is definitely growing too, said Helma Kusuma, communications director for Freelancer.com. She said her organisation recorded six million users in 2012, rising to 15 million users three years later.

The latest figures show that Freelancer.com has just hit 25 million users with 12.8 million jobs posted on its site.

“When Freelancer.com first started out, employers came from developed countries like the US, United Kingdom and Australia, while freelancers were commonly from developing ones like India, Philippines, Indonesia, Pakistan and Bangladesh.

“However, through the years, we are seeing employers from developing countries who are looking to hire freelancers, and they employ freelancers from every part of the world, including their own countries,” she said.

Accelerated by technological advancements, the rise of a diverse workforce has led to a host of new challenges for HR managers.

Among them are the lack of clarity in job scope and the amount of flexibility available to workers, as well as trust issues when managing confidential information, said Saradevi.

She added that it was also difficult to find the right talent to lead and manage a diverse group of people.

“Contract work can mean employees not necessarily being physically present all the time and this adds to managers’ challenges,” she said.

Talent retention could also be an issue for organisations. Kusuma explained that many of Freelancer.com's users, despite not enjoying full-time benefits, have become entrepreneurs themselves by setting up their own companies.

But for SUTD senior HR director Dr Jaclyn Lee, adaptability is the winning formula at the university. She said the organisation has the agility to manage a variety of workers, from post-doctoral researchers to freelancers, as well as structured workers running the back-end operations of the organisation.

“SUTD has a work-from-home scheme, particularly for the full-timers, so that they enjoy the flexibility of working from home as well as being paid full time,” she said.

And while being nimble is now increasingly being sought after, there is a lack of clear regulation when it comes to protecting the rights of this new type of worker and the company they work for.

In Malaysia, Haggag said there were no acts to govern freelance activities, such as the ‘Freelance Isn't Free Act’, introduced in New York last year.

Instead, contract law governs the relationship between employers and freelancers in Malaysia.

Haggag said current practices show that technology facilitates the interaction between employers and freelancers and ensures fair exchange of payments and services.

“As such, the interaction between freelancers and employers through Freelancer.com, or any other similar platform, is set out within the site’s terms of use,” he said.

At SUTD, Dr Lee said it was all about working out a fair rate for the gig or a freelancer rate, while a more comprehensive package was offered for the full-timer that includes a wider range of benefits and annual leave.

Flexible working hours are an attractive prospect to the modern worker, but Haggag noted that while it was unlikely that labour markets would become completely freelancer-centric, the methods for getting work done were becoming more diverse.

“We will still have full-time employees, however their share of the job market will shrink,” he said.

Haggag also said exclusivity of work would disappear, meaning that an individual would be able to work for multiple employers at the same time, allowing for compensation on a hourly or milestone basis.

And, despite Freelancer.com's surge in membership, Kusuma said businesses still need full-time employees to achieve long-term goals.

“Workforce for their core business will remain in-house but non-core businesses (especially those with short-term purposes) will continue to be, in an increasing way, awarded to talented freelancers,” she said.

Dr Lim said some of her students had joined start-ups and companies that are liberal about the amount of ‘face time’ employees needed to put in.

“The nine-to-five working day situation has changed a fair bit particularly in newer industries where they don't have that sort of history or tradition,” she said.

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