There is no such thing as a job for life anymore.
The age of “just in time” production has given rise to “just in time” workers —employees whom a business can hire on a moment’s notice to fill a momentary need, says the U.S. Department of Labour’s “Futurework” report. Although, the report was issued in 1999, it addressed the trends and challenges for work in the 21st century. Today, workers want a greater ability to care for their families while employers want greater flexibility to compete in the global market. Around the globe, contingent employment is on the rise as the desire for flexible workforces increase and technology allows workers to take the office everywhere.
In the U.S., roughly 1 in 10 workers fits into the so-called alternative arrangement and nearly four out of five employers use some form of non-traditional staffing arrangement. America’s alternative workers number 13 million and are a mixed group. The majority (8.5 million) are independent contractors. A growing number (1.3 million) are agency temporary workers.
In Singapore, freelancers and term contract workers numbered 368,800 in 2012 and in 2011, outsourced workers formed 3.3% of the workforce in private establishments, according to local media reports. While contract work used to be the domain of low-skilled workers, professionals, managers, executives and technicians (PMETs) are increasingly being hired on contracts. Some 70,000 PMETs were hired on term contracts in 2012, noted Channel NewsAsia, up from 67,000 in 2011.
Hiring independent contractors enhances flexibility. In recessions, work arrangements with contractors can be terminated more easily than employees. Conversely, in expansions, contractors can be hired relatively quicker than permanent staff. As new industries and careers emerge at a rapid rate, more tasks are being automated. Organisations that will thrive in this market of constant change and innovation are the ones that are equipped with staff that could adapt quickly.
In Asia, many small businesses have been turning to independent contractors because they are able to hire specialists at a reasonable cost. For many, taking on contract workers provides a way to tap skills that the company would otherwise be unable to access. Small and medium enterprises typically have more difficulty than multinational companies in attracting and retaining talent. Another reason for turning to contractors is to control benefits costs, which have been rising rapidly in Singapore in recent years.
However, with the popularity of contingent employment, governments, enforcement agencies, unions and international labour organizations are increasingly scrutinizing such work arrangements. The EU Agency Worker Directive, agreed in November 2008, is now widely adopted by many governments. In 2013, China implemented regulations limiting the use of dispatch employees. The regulations, which were an amendment to the Employment Contract Law, ensured that workers hired through contracting agents are offered the same benefits and pay as full-time employees.
Contracting agencies have taken off since the Contract Law took effect in 2008. The law stipulates that employers must pay workers’ health insurance and social security benefits and makes firing very difficult. Employers, seeking to reduce costs, had hired contractors to avoid paying the benefits.
In Singapore, the Ministry of Manpower is in the process of its second phase of reviews of the Employment Act and the Employment of Foreign Manpower Act to better protect workers under what it termed non-traditional work arrangements. These arrangements include short-term contract workers, outsourced workers and freelancers. The aim is to ensure that labour legislation remains relevant, with a focus on further protecting the well-being of vulnerable workers, it had said.
In the UK, clauses forbidding employees on so-called “zero hour contracts” from looking for additional work elsewhere are being outlawed. “Zero-hour” contracts give the employer the discretion to vary the employee’s working hours and employees are often subject to exploitation as they may be denied work at any time for any reason.
Globally, the trend of adopting a contingent workforce is seen likely to gain momentum, which will lead to increased local regulations, tax rules and workers’ rights. At CXC, contractors have their paperwork, rights and compliance issues taken care of, enabling them to focus on their jobs.