CONTRACT STAFF : THE FUTURE OF WORK IN SINGAPORE

Resident employees working as contract staff, freelancers or term contracts are on the rise. According to data from the Ministry of Manpower (MOM), residents working as contract staff increased almost 9 per cent from 2010 to 2015, about 202,400, or 11 per cent of the resident workforce in 2015. In March 2017, Manpower Minister Lim Swee Say noted that there were 200,000 freelancers in Singapore, again reconfirming that they make up about 9 per cent of the workforce. Of these, about 167,000 workers were “primary” freelancers – workers who freelance as their main job. These include insurance agents, private-hire car drivers, hawkers or stallholders, and private tutors. The remainder were “secondary” freelancers, representing about 1.5 per cent of resident employment. These workers freelance part-time alongside other jobs and would include students, housewives or retirees who take on side jobs for additional income.

Freelancing or Contract Staffing has and will increasingly become a trend in the future workplace. Most of the contract staff arrangement are also being done via an outsourced contract staff arrangement with third party contractors or employment agencies. These agencies are also known as professional employer organization (PEO) and the candidates are placed with these agencies as Employer on Record (EOR). Industries such as IT, financial services, engineering, pharmaceuticals, and oil and gas, where businesses are structured heavily around projects, have the greatest propensity to use contract staff. But there is also increasing demand for contractors in blue collar professions as can be seen from the data above.

According to 2014 PwC survey, almost all employers expect that at least a fifth of their workforce will be made up of contractors or temporary workers by 2022. The COVID 19 pandemic in 2020 has accelerated this process further. The work from home experience during the pandemic over the past couple of years have shown that productivity is not necessarily affected when employees work from home. In fact, many employers are considering making work from home a permanent feature of the work arrangements.

While older employees may view working in the office as natural order of things, the younger employees view operating remotely as completely normal since the pandemic hit. For certain industries and job roles such as those in creative development and production, face-to-face collaboration is essential. In other industries such as technology and media, working flexibly and from home may be more acceptable.

As organisations become increasingly aware of the benefits of contracting, and candidates become more open to the concept of professional contract work, initiatives to protect the rights and benefits will become increasingly pertinent.

Generally, employees on term contracts miss out on benefits which permanent staff are entitled to, such as increment, insurance benefits, bonuses and union support. However, many employers do consider contract staff with the same status as their permanent counterparts. Many contract staff enjoy the same employment benefits as their permanent counterparts. Nevertheless, contract staffing arrangements are often seen or perceived as inferior compared to permanent arrangements. Unlike mature contract markets like in Europe or US, the pay for contract staff in Singapore is at most on par with permanent employees, making the employment arrangement a less attractive option.

Beyond material benefits and financial remuneration, contract and transient employees will be increasingly cognisant of professional development opportunities within these roles.

The biggest drawbacks from contracting, due to the shorter nature of the work, revolve around the lack of being able to influence big changes and ideas within the company and its business, something that could impact the strength of the candidate’s resume in the long run.

Supported by the technology and social media as well as the rise of the portfolio career, more and more workers come to realise that they could enjoy more flexibility and varied challenges by working freelance or as a contractor for multiple companies.