The noise around the sharing economy is deafening. Rules are getting broken, industries are getting disrupted and unicorns are being born. Cars, hotels and office space industries have already experienced the winds of change, and now the professional recruitment and talent management industry is undergoing a radical shift. According to the 2016 Hays Asia Salary Guide, 85% of employers expect to increase or maintain their use of temporary/contract staff in the next 12 months. Organisations can leverage business skills ‘on demand’ to bridge the pervasive talent gaps and save costs at the same time. While the gig economy has marked its arrival in Singapore with the rise in alternate modes of employment, there is little clarity on the various ways in which organizations can access the contingent workforce.
At Flexing It, we help more than 1600 organizations across South and South East Asia reap the benefits of the ‘gig economy’. In this post, I aim to share our experiences with these companies and expand on the different models companies are adopting to leverage the ‘on demand’ workforce.
1. Business Freelancing or working on fixed term ‘contract’ refers to an employment arrangement where the association of the employee and the employer is time bound – typically in the range 3-24 months. As per Robert Walters 2016 salary survey report, while contracting has not been seen as a viable career option in Singapore historically, we are now seeing highly qualified professionals becoming ‘career contractors’ in search of a better work-life balance. Approximately 10% of the resident working population in Singapore was doing contractual work in 2015 as per the Ministry of Manpower.
Globally, companies spent $300 billion on contract work in 2015: Accenture report
This type of arrangement is typically used to fill in short-term resource needs in case of special projects, maternity leaves and sabbaticals. Some examples include project managers for company-wide initiatives, talent acquisition specialists and sales managers for a company entering into a new geography. With uncertain economic conditions and more professionals seeking to balance work with personal commitments the demand for contractual work is bound to increase.
2. Independent consulting – The worldwide consulting industry is estimated to be valued at $ 450 billion, with South East Asia as one of the fastest growing regions in the world. The sharing economy is creating a dent on this traditional industry with new models to ‘democratize’ access via smaller delivering units i.e. individual consultants, boutique firms and crowdsourced teams. These new models have immense potential in catering to consulting needs of the largely unserved sections of SMEs and start-ups.
In 2015, 20% of the consulting work was delivered by individuals and boutique firms. This is slated to go up to 40% by 2020 according to Plunkett Research estimates.
In addition, even large corporates are engaging with these consultants to carry out assignments that do not warrant a full scale consulting team with a million dollar budget. These ripples have even forced traditional consulting firms to employ independent consultants to solve key business problems and add flexible capacity to their existing teams in order to be cost competitive. The benefits of getting readymade expertise on an as-needed basis to help expand business or spruce up resources just cannot be ignored.
Earlier this year, PwC launched a talent exchange to hire freelancers for its client projects globally
3. Expert Networks – These connect organisations to subject matter expertise over a short call or a workshop. Traditionally, the users have been big consulting & investment firms and experts being CXO’s and senior F500 executives. However, we are now seeing a larger industry taking shape – where online models are getting introduced to help other segments of users as well – namely start-ups, SMEs. Whether you are a start-up founder who wants advice on go-to-market strategy in a new region or a small industry owner, who wants to understand tax considerations while exporting your products, expert networks are an organized way to find a perfect match. In addition, this model is also getting adopted in mentoring, career counselling fields for sourcing expertise on demand.
Globally, leveraging on-demand expertise is a large and rapidly growing market. According to recent industry estimates, expertise-on-demand is already a $400 million worth market in the US.
It is evident from these evolving employment models that flexible and independent working goes much beyond working remotely or the downmarket ‘part time job’. Niche independent consultants, advisory and boutique consultants with specific domain expertise, temporary experienced faculty at universities are but a few roles that are part of this ever-growing segment of the new high-end freelancers. With an organized contract work market and multiple platforms to source short-term resources for organizations, Singapore leads the race as compared to other Asian countries. However, our adoption of the various models of the gig economy is still in its nascent stage as we lag behind our western counterparts. In the US, for instance, 34% of the working population freelances in comparison to about 10% in Singapore. As more and more professionals decide to go on the path of solo-preneurship, organizations would need to think hard about integrating them with the full time workforce. And as companies become more adaptable in order to stay competitive and people demand more from their lives, the need for flexible working will only intensify in the years to come.