The gig economy is in full swing. Comprising short-term contract workers or freelancers over the usual permanent position jobs, more and more successful companies are accepting this up and rising trend of contract workers. With the gig economy rising in size, there are more opportunities for companies to jump on this train.
But why should companies do so? What advantages can this gig economy confer over to companies?
Benefits Of Contract Employment as A Workforce Management Solution
Provides a simple cost-saving measures
Firstly, let us talk about dollars and cents. This is one of the best metrics when it comes to business performance - how much we are making, what is our profit margins, how can we cut down on expenditure. Employing of contract workers seeks to address the cost-saving measures of a company. As contract workers are not considered full-time workers, the company’s HR need not provide for any additional costs like annual bonuses or comprehensive full-time staff entitlements. In a study conducted by MIT, for an employee drawing in a $50,000 annual salary, the value of the average benefit is estimated to be between $62,500 - $70,000. So for companies who are looking to fill in short-term roles but cannot afford the overhead and costs that typically accompany a full-timer, contract roles may suit you better.
Contract work could be less "hassle" for HR Managers
In a similar vein, the HR of a company that employs contract workers do not need to concern themselves with too many rules and regulations. Compared to a contract worker, permanent staff members have access to rights and protections that contract workers do not, like the aforementioned benefits. Not only is this a cost-saving measure, but it also saves the HR the trouble of dotting the I’s and crossing the T’s of the legalities surrounding contract workers.
It helps businesses to flexibly scale
Another benefit that comes with contract work is that companies would gain access to workers in a shorter time frame. If a company is embarking on a project that requires highly skilled employees but does not possess the resources to train employees or hire any full-time staff, contract work would allow them to gain the knowledge and skill sets of the qualified workers for the duration of said project. In addition, companies use contracts to satisfy seasonal demands and projects in their business cycle. For example, during the Chinese New Year period, many F&B outlets may require a bigger service force to sufficiently meet consumer demands.
If you work closely with a recruitment agency to quickly source for contract workers to fill up these positions, and you would soon find your company in a position where you are able to scale quickly depending on the demands of the market - naturally becoming a flexible workforce. Contract workers may sometimes work outside the normal operating hours, such as late into the night or on the weekends, thus conferring even more flexibility on the company’s side.
Network and test-drive potential full-time employees
Contrary to what you might believe, contract work requires you to build up relationships with a set of contract workers to fully reap the benefits of it. By repeatedly hiring the same few contract workers for multiple projects, you would end up establishing relationships with them. You would then build up a dependable network of skilled contract workers that can fill in the manpower gap, when the need arises. These contract workers typically come from varying backgrounds and bring to the table a diverse set of skills that can greatly benefit the company, be it in providing a different perspective to issues or generating more creative ideas for the company’s betterment.
Provided that these contract workers perform exceptionally well, and on a regular basis, there might be a window of opportunity for a full-time conversion. By repeatedly engaging the same few contract workers for projects, you are essentially training and acclimatising them for a potential permanent job. These contract workers may be an alternative to hiring permanent staff members for the company. (Keep in mind that not all contract workers may be interested in a full-time job… Yet)
How Should I Get Started?
While reading the article, you might be interested in hopping on this train. How can you do so?
First, examine your business
One of the ways you can do this is to have a discussion with your HR and reexamine your business structure. Examine your company's financials and see if you are in need of cost-saving methods. Identify any potential within your company for contract workers, such as new projects in the pipeline.
Get the help of recruitment or manpower outsourcing services
If you or your HR are experiencing any trouble with these steps, you can consider taking on the help of a well-renown recruitment agency.
The HR specialists in recruitment firms would be able to help examine your company’s position and walk you through any issues you are facing and give appropriate human resource solutions for your company. They would also be able to aid in the recruitment of these contract workers as they would have access to a wide array of potential workers from their candidate database. They would be able to quickly fill your contract roles with the appropriate candidates.
BGC Group has more than a decade of experience in providing contract recruitment outsourcing in Singapore. We are able to source for the right people with our extensive active candidate database.
Some Parting Advice on Hiring Contract Employees
Contract employment should may not a silver bullet that is the best HR solution for your company. Everything must be viewed in your respective business context and situation. Take time to look through your company’s needs and standing before making a decision about the employment types that best fits your company.
Looking to hop on the gig economy wave in Singapore? Look no further than here. As a recruitment and outsourcing agency in Singapore, BGC Group has the expertise to help you out with ease. Contact us now to find out more.
Recommended Reads for HR: