Firms set to hire more contract workers

High-level jobs such as legal counsel at international banks and senior IT managers were once almost invariably permanent roles, but cost-conscious firms are increasingly signing up contract workers instead.

Contract workers - in these high-powered posts as well as those further down the job ladder - have been in the spotlight since the Manpower Ministry, along with the labour movement and the Singapore National Employers Federation, issued guidelines on them last month.

They stated that contract workers who have been employed at the same firm for three months or more are entitled to statutory leave benefits.

The guidelines also encourage employers to give sufficient notice to contract workers - and vice versa - before a contract's expiry date.

In all, some 202,400 Singaporeans and permanent residents were employed on term contracts last year, making up a hefty 11.3 per cent of the resident workforce.

The number of people employed on contracts has held steady for the past decade, but recruiters say companies are hiring more this year.

Ms Kirsty Luce, director of human resources firm Page Personnel, said she has seen an almost 60 per cent jump in contract positions put out this year compared with last year.

She added that the growth in permanent roles has been flat with more companies focusing on filling contract roles.

Ms Luce said the jump may be due to a subdued economic climate and rising acceptance of contract work.

"With any downturn in the market, you will see an increase in contractors and I think it's twofold.

"Some companies may be more vigilant and want to test things before committing to the headcount. Secondly, contracting has become more popular in Singapore and more candidates are open to it."

The traditional contract jobs in demand are in IT and financial services, but she notes an increased demand for accounting, secretariat, and sales and marketing roles now.

On government job sites, contract positions on offer included junior executive roles to more senior jobs, such as a deputy director position at the National Arts Council and head of the aviation weather service at the National Environment Agency.

On the job sites of banks and IT firms, senior project managerial and HR roles were advertised as contract jobs, along with entry and mid-level business analyst and corporate communications roles.

Mr David Ngoh, managing director of business solutions firm RMA Group, reported a 10 per cent to 20 per cent rise in hiring of contract workers this year over last year.

"We foresee that this trend will increase for at least the next three years," he said, noting that the trend was to "approach work from a project management angle".

"This approach results in companies keeping smaller core teams, giving them greater flexibility to react to market forces," he added.

Recruitment consultants say the proportion of contract workers in a company can vary according to the firm's growth strategy.

Deloitte Singapore said under 1 per cent of its workforce is made up of contract workers, while Ms Sylvia Koh, chief people officer at CrimsonLogic, said 30 per cent of its staff are contractors, mostly working in programming, coding and testing.

Mr Trillion So, human capital leader at PwC Singapore, said about 5 per cent of its workforce is made up of contractors, and it is looking to hire more. He said: "We are looking to increase this proportion to ensure we maintain our cost competitiveness and agility in dealing with increasingly volatile and complex economic conditions."

The professionalisation of the contract employee has been in the works for the last few years, said Ms Luce, attributing the trend to the growing acceptance of contracting here by companies and candidates.

A Page Personnel study last month found 56 per cent of contract workers here have more than 10 years of professional experience, while 70 per cent have at least a relevant bachelor's degree.

Unlike in the past, contract jobs these days pay on a par with permanent roles and may even pay better or come with bonuses on completion of the project, Ms Luce said.

Even creative companies are jumping on the bandwagon.

Mr Jackson Tan, creative director of branding and design agency Black, said his firm did not feel the heat of a slowing economy but added that instead of hiring two permanent workers a year, he was considering hiring one full-time staff member and another on contract instead.

"Nowadays, in this new economy, it's good to have some core members and a network of freelancers... so you don't have to scale your headcount and overheads when you do bigger projects, because you never know if the project will sustain itself," he said.

"That's the problem with old-school models. Businesses scale up for projects, but when the account leaves, they have to cut headcount to make their balance sheet better. The new way of working is more win-win for everyone."

He said some employees prefer working on a contract for the flexibility it gives them on time while allowing them to feel part of a team.

Banks such as OCBC and Standard Chartered told The Straits Times that they welcomed the new guidelines on contract staff, but others were concerned about the manpower issues the guidelines would pose.

A spokesman at home-grown shipping firm Pacific International Lines said that the company expects hiring of contract workers to remain constant, but added that "extending paid leave for contract staff working between four and six months will strain our manpower".

This article was first published on Jul 12, 2016.
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