The workers of this generation are completely different from the last. They demand greater control over their career path and how their work life integrates with their personal lives. Since these workers are also the ones with the skills required to handle the new technologies and innovations of the Industrial Revolution 4.0, businesses can ill-afford to let these workers slip from their grasps.
Unfortunately, the work ethic of these new workers combined with the slow rate by which high-end talent is being developed means that there simply just aren’t enough of these skilled workers to go around. As such, businesses are turning towards freelancers, gig-workers, temporary employees, independent contractors, or free agents to fill their vacancies. This creates a ‘gig economy’ that is defined by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.
A majority of hiring managers are using freelancers in their departments primarily to save on costs. Though in addition, freelancers can drive innovation by bringing in new ideas and perspectives and help keep a competitive advantage. According to a 2018 report by KellyOCG, a talent outsourcing and consultancy group, 65 per cent of global hiring managers said the gig economy is rapidly becoming the new norm for how businesses organise workflow.
In the APAC region, the report states the up to 84 per cent of hiring managers outsource work to freelancers. It also stated that 43 per cent of global organisations who engage with free agents have saved at least 20 per cent in worker costs. This is particularly important for new SMEs and startups that want to try avoiding breaking the bank.
Apart from saving on costs, companies that leverage the skills of free agents can often expect to gain better access to niche skill sets. Without the restraints and bureaucracy of traditional employment, organisations can be more innovative and competitive.
There are a number of downsides to working in the gig economy however. Although it affords freelancers with flexibility, surviving in the gig economy also requires competency in specific skill sets, which can get very competitive. In Southeast Asia, the gig economy is unregulated, making freelancers easy targets for exploitation either by being overworked or underpaid.
The 2018 study by PayPal revealed that 58 per cent of freelancers in four Southeast Asian markets have experienced not being paid. The key reason for this is that freelancers are not being taken seriously by clients.
Rahul Shingal, managing director of PayPal Southeast Asia said, “We are seeing more young people choosing to freelance,” adding that “as they become integral to the global economy, it is critical for them to be accorded the same respect that other professionals receive. We should do more to elevate the standing of freelancers as a community and empower them in their autonomy.”