As per latest reports by North Carolina-based procurement intelligence firm Beroe, Inc, the global market for temporary labor is currently valued at $463.1 Bn and is expected to increase until 2020, with “major revenue growth” in places like China, Italy, France, Sweden, and India. Furthermore, this US-based report highlights the APAC region, particularly Singapore and Malaysia, as prime examples of gig economies that are already driving market revenue, buoyed by a need for an increasingly flexible workforce and the growing use of online platforms.
Currently, temporary staffing makes up $382 Bn (89 percent) of the global revenue in this area, with the growing need for IT workers across the world causing an increase in demand. The report found corporations tended to favor temporary staffing because it’s cost-effective and efficient. There is also a strategic benefit to taking on temporary workers, as it allows for a diversity of knowledge and perspectives to circulate throughout the organisation. However, there are a number of differing opinions on how beneficial this temporary labour market actually will be in the long term - both for the workers and the companies who employee them.
APAC leading the way
The Beroe report refers to the gig economy as a growing trend in Southeast Asia, but some may argue it is already an established mode of recruitment in the region. Based on data from the World Bank, 26 percent of Malaysia’s workers are currently freelance, with companies such as Grab, Gojek, Dego Ride and Foodpanda gaining employees at a rapid rate. Similarly, 56.9 percent of Vietnam’s working population are self-employed, and 50.9% in Indonesia.
In an interview with The Malaysian Reserve, Monster.com’s Asia Pacific and Middle East chief marketing officer Anshul Punhani said workers are drawn to freelance or gig work because of the flexibility and freedom. “[Gig work] gives them an opportunity to sometimes work with multiple organisations and explore multiple opportunities at the same time,” he said.
The use of online recruitment platforms such as Human Cloud and VMS has also shown an increase in the gig economy market. These programs allow employers to match temporary workers to positions, compare going rates for salaries and manage overtime. Such programs also allow for the gathering of workforce data, which is a huge advantage when businesses are overseeing large amounts of people in different positions working on a variety of projects.
There are very few obstacles if you want to begin working in the gig economy. You get to be your own boss and choose how you want to work and with whom. From a business standpoint, freelance and gig workers don’t need to be added to the payroll, but bring expertise and knowledge to the organisation that may not already be present in the company. The Beroe report found that, as baby boomers are exiting the market, there was a need to retain their “immense knowledge.” By hiring them as temporary workers, this knowledge can be obtained without imposing the constraints and inflexibility of a long term contract.
Similarly, a recent Robert Half survey of Singapore leaders who are struggling to hire and train staff who are well-versed in new technologies found that hybrid employment models can help alleviate this skills shortage. The survey revealed that most (81 percent) of employers believe the best way to build an “agile workforce” is through a combination of permanent staff and interim workers who provide specializations as and when required.
Pitfalls and Drawbacks
In terms of drawbacks from a business point of view, the Beroe, Inc. report highlighted how even a temporary workforce can require basic tools such as a computer and office space. “Hiring a large pool of temporary laborers results in the expenditure of basic essentials, which could lead to an increase in cost-per-hire,” the report stated.
However, there are more deep-seated potential drawbacks for gig workers than their employers. In a recent article for the Jakarta Post, Shah Suraj, an advisor at the School of Social and Political Sciences of Gadjah Mada University, expressed concerns that a gig economy could stagnate career progression and drive up income inequality in Indonesia. Suraj argues that while the gig economy currently gives a powerful financial injection into the economy, these jobs don’t solve long term problems or “shift the economy to a higher stage of production.” Suraj also makes the point that gig work has the potential to put workers in a “skills trap” that is hard to escape. “A Go-Jek driver, for example, will always be a Go-Jek driver,” Suraj says. “He or she cannot upskill in their craft or take on a management role. They quite simply drive all day.”
He also points to the fact that according to a recent survey of Jakarta’s Go-Jek drivers in Jakarta, Yogyakarta and Banyuwangi by Gadjah Mada University (UGM) almost half (49.74 percent) of respondents were aged 19-30. Whether by choice or necessity, it’s clear from these figures that Indonesia’s skilled young workers are attracted to freelance work, and while Suraj recognises these jobs serve a temporary purpose, he believes it is “crucial that [young people] find jobs that are more likely to offer opportunities for training and upskilling, vital to achieving higher incomes.”
There are also concerns for the mental wellbeing of Southeast Asia’s sizeable number of gig workers. In February of this year, the University of Malaya held a forum entitled ‘The Gig Economy - Disruptive Innovation or Opportunity for Exploitation,’ that looked at some of the potential negative impacts of this new careers ecosystem. The forum revealed that by 2017 the gig economy had increased by 31 percent. One of the forum speakers, Shareen Shariza Abdul Ghani (co-founder and Director of Sourga Ventures S/B as well as former CEO of Talent Corporation) predicted that "in the next five years, 40% [of a company's workforce] will be coming from contingent workers.”
Clearly, the growth of the gig economy in Southeast Asia is inevitable. However, the speakers at the forum expressed fears for the wellbeing of workers in the gig economy, suggesting the erratic hours and precarity of this mode of work that can lead to mental health problems, stress and lack of sleep. There is no paid time-off for freelance workers and very few - if any - of the health benefits offered by traditional 9-to-5 work.
Blue collar work and automation
Lastly, the ever-present threat of automation could also impact the growing gig economy, particularly in blue collar lines of work that rely heavily on a temporary workforce. “Growth in robotics and artificial intelligence could result in automation of jobs,” the report suggested. Even though there has been an increase in temporary workforce in transportation, manufacturing and warehousing, these jobs could be lost to automation before too long.
However, there are positive signs from the APAC region in this area too. In February 2019, Bangkok-based staffing agency startup Helpster raised $5.2 Mn in Series A funding to put towards expansion. The company connects pre-screened workers - many of whom work in blue collar industries - with employers across the region. The company allows workers to choose their own schedule and also goes some way to addressing fears over the mental health and security of workers in the gig economy, as through the app, workers can earn bonuses, health insurance and social security when they work a certain amount of time. Currently, Helpster estimates there are 100M informal workers in Southeast Asia. Their aim is to “help informal workers exercise their right to fair work and better living.”
Back in 2017, Helpster CEO Mathew Ward told Reuters that Helpster is a revolutionary approach to the gig economy, helping out a new type of worker who prefers to utilize modes such as smartphones to find work. “This has opened up the way for technology to improve the way businesses and these workers find and engage with each other,” Ward said.
Examples such as Helpster demonstrate how the gig work market can be operated transparently and fairly, giving informal employees power over their own lives while providing a flexible, dynamic workforce to companies as and when they need them.