According to the recent CXC and Ardent Partners Asia report, 43% of the global workforce is considered ‘contingent’ or ‘non-employee’, while in the Asian market that figure is 26%. Asia’s contingent workforce penetration rate is lower than the rest of the global market. Reasons for this include the level of market maturity, cultural differences across countries in Asia, as well as the regulatory forces shaping talent pools and labour markets. Labour laws and regulations vary across Asia; hence, some countries, such as the Philippines, are very pro-employee, while others, such as Singapore, are very pro-employer. Generally, the perceptions of the contingent workforce are changing as new generations of workers enter the labour market. Today, the contingent workers are no longer seen as a B-class workforce – but a strategic, knowledge-driven, and highly flexible workforce.
CONTINGENT WORKERS IN ASIA
In Asia, there is no talent pool of specific contingent labour; the market is offering the same types of roles to both permanent and contingent workers. However, generational change and the COVID-19 pandemic forced businesses to shift to more flexible workforce arrangements. In the next two years, we will see a significant increase in contingent workforce numbers all over the world. As businesses seek to become more agile and recover quickly from the pandemic, the contingent workforce will assume a more important, and equal role, within a company’s overall workforce strategy. Businesses are accelerating their digital transformation initiatives – resulting in a rapid increase in project work, especially in IT – leading to increased numbers and greater acceptance of contingent workers.
Furthermore, businesses are increasingly shifting their focus to outsourcing HR programs outside of their base-country and thereby bringing these programs back in house. By having these programs centralised, with full visibility and access to specially curated talent pools, businesses have been able to rapidly mobilise to deliver business as usual. Those able to react dynamically – in real time and in an on-demand manner – are thriving and achieving sustainable and significant competitive advantages.
THE COMPETITIVE EDGE
Recently, most of the global market began to pivot away from cost reductions and savings as the top reason to harness contingent labour; prioritizing agility, productivity, and the skillset-driven advantages of non-employee talent. Though cost efficiency is still a priority outside of Asia (and within traditional contingent workforce programs that are procurement-led), most businesses are actively prioritising other areas (aligning projects and available workers, talent pool curation, etc.). In Asia the focus on Contingent Labour balances savings and access to skills (65% vs. 59%). With skillsets and expertise now top-of-mind, Asian businesses are beginning to prioritise these strategic needs more.
With the current COVID 19 pandemic more businesses in Asia are realising they should have totality of compliance top-of-mind. However, the majority of enterprises in this region self-report only weak-to-average controls and capabilities for managing compliance within their contingent workforce programs. Thus, there are two critical points all Asian businesses need to understand in 2020:
- Traditional compliance and risk mitigation measures must always remain top-of mind.
- The current COVID-19 pandemic has served to emphasise other compliance issues, such as worker health and safety. What are the conditions in which individuals are working? Can the organisation effectively track and monitor how potential health issues may impact the workforce or current projects?
THE FUTURE IS NOW
Businesses are accelerating contingent workforce take-up in Asia, and globally, as they seek a rapid return to normal productivity levels, especially if workers had been made redundant during the crisis. There is no doubt flexible work arrangements will become the norm:” The unemployment from the coronavirus disruption has changed how companies will hire, likely meaning fewer full-time hires and more contingent workforce engagements.”