How Can A Contingent Workforce Help Build Business Agility?

While businesses continue to face economic uncertainty across Asia Pacific, it’s a tremendous relief to see some light at the end of the tunnel. According to Moody’s Analytics, by the end of 2022, all major economies in the region will have achieved real GDP growth exceeding levels measured in 2019’s fourth quarter. The outlook for 2023 is even better.

This long-awaited rebound presents ambitious businesses of all sizes with a wave of opportunities to scale up across Asia Pacific. A recent Microsoft-IDC study suggests companies that used the pandemic to accelerate their digital transformation and rethink their business models will gain the most from this new growth phase.

But forging innovation and modifying strategies at pace brings challenges. In addition, the fluctuation of supply and demand of talents in today’s volatile landscape compels companies to rethink their traditional workforce strategies and embrace fresh hiring approaches to stay competitive. In this dynamic, fast-evolving space, a well-implemented Contingent Workforce strategy can make all the difference to the future of work.

1. Contingent Workforce Grows in Importance

The Contingent Workforce forms a core part of the fast-growing Gig Economy that continues to reshape the world of work. It includes workers who are not on the company payroll but provide similar services to the organisation, such as independent contractors, freelancers, agency hires and other temporary employees.

Our latest Workforce Insights Report reveals that a Contingent Workforce is already a critical part of workforce employment strategies in Asia Pacific, with over 50% of all companies turning to it when experiencing a headcount shortage. Singapore, Malaysia, Hong Kong, and Indonesia are the highest adopters of a Contingent Workforce.

More importantly, our survey revealed that the trend is strengthening across most industries. Over 58% respondents across Asia Pacific said that they are already adopting a Contingent Workforce, while 25% of companies indicated that they will increase their usage over the next two years.

Let’s take a look at what’s driving this growing recruitment practice.

2. How a Contingent Workforce Can Help

Even the best business leaders struggle to predict the future in today’s uncertain times. Finance and operations teams must be ready to repeatedly pivot to keep up with an ever-shifting set of market conditions. Companies also have to deal with workforce gaps created by unforeseen voluntary turnover. For example, evidence shows Gen Z and younger millennials are shifting from full-time employment to the more flexible and less intense world of freelancing. And, of course, sudden spurts of business growth, new short-term projects or seasonal spikes can all bring last-minute calls for urgent staffing.

Our report found that the most common reason businesses adopt a Contingent Workforce is its flexibility for workforce planning, making it easier to upsize or downsize as required. On average, 55% of companies surveyed across the region stated this as their primary motivation, with the highest responses coming from Vietnam and India. The second most popular reason for hiring a Contingent Workforce is to help fill specialised roles without disrupting normal business operations, with the strongest responses coming from Singapore companies.

A Contingent Workforce can also bring in specialised skills on a short-term or project basis lasting anything from a few months up to two years in duration. This fixed-term period can allow time for management to evaluate talent and assess whether they match the company’s needs and culture before hiring permanently. And, in some cases, a Contingent Workforce brings value by building a sales pipeline for start-ups and companies with new product offerings.

Busy, growth-focused companies tend to appreciate expert help when sourcing a Contingent Workforce. 48% of the respondents to our survey engage recruitment agencies for their headcount needs and strategies, especially within the IT/Hi-Tech, Healthcare, Banking/Insurance, Government Agencies, Manufacturing, and Professional Services sectors. There’s also a trend for roles with high attrition rates (such as blue-collar workers and call centre staff) to be outsourced to agencies that know the industry and talent pool landscape better. Using recruitment agencies as part of their talent supply chain can help companies fill staffing gaps at short notice with less fuss and allows Human Resources teams to get on with other high-value tasks.

3. Changing Mindsets

The trend for businesses accepting a Contingent Workforce as part of the mainstream workforce has been a focal topic for a while. The talent crunch and pressures on delivering rapid digital transformation projects have reaffirmed the mindset. Our Report suggests that companies now recognise that a Contingent Workforce forms an essential part of their overall talent strategy.

As a result, the treatment of the Contingent Workforce is improving. In our survey, 74% of Asia Pacific companies say they are likely to reward contingent workers in the same way or better than full-time staff, particularly for the IT/Hi-Tech, Healthcare, Banking/Insurance and Manufacturing sectors. These are sectors where the battle for top talent tends to be most intense, so rewards help to ensure retention and business continuity. The markets most likely to offer contingent workers better rewards than permanent hires include Hong Kong, New Zealand, India, China, Taiwan and Vietnam.

4. Skills in Demand

Southeast Asia’s booming fintech and ecommerce sector has led to a massive demand for tech talent. In Malaysia, for example, the information and communications technology (ICT) sector is expanding at breakneck speed and predicted to contribute 22.6% of the country’s GDP by 2025. At the same time, tech firms across the region need to rapidly scale up in the face of skyrocketing global competition.

A Contingent Workforce can in some instances provide companies with more agility than hiring a full-time workforce. And with the talent crunch showing no signs of easing, it’s no surprise to learn from our Report that Information Technology skills are the second most in demand in Singapore after General Administration and the highest in demand in Malaysia.

5. Supporting Your Contingent Workforce Strategy

Our latest Workforce Insights Report has revealed how a Contingent Workforce will continue to play an even more critical role in the future, offering employers greater workforce management flexibility.

PERSOLKELLY can help businesses successfully navigate this landscape by providing customised solutions for flexible workforce management across Asia Pacific, including Recruitment, Onboarding, Time-attendance tracking, Billing, Reporting and Managing SLAs. We can evaluate how a company’s performance management systems apply to Contingent Workforce hires, for example, and determine whether they will be eligible for the same benefits as their full-time employees.

The survey data from the report will help us build and refine robust Contingent Workforce strategies for our clients as part of our Regional Talent Solutions across Asia Pacific, enabling businesses to unleash the next wave of exciting growth opportunities.

(Optional: Download the 2022 APAC Workforce Insights Report)