Companies around the world continue to struggle to stay ahead in the race for skilled talent. Talent acquisition remains a priority for organisations great and small. After all, high-performing employees continue to be one of the greatest assets that companies can rely on to spearhead growth and innovation. One of the most effective ways that businesses can address the shortage of skilled workers is tapping into the contingent workforce, also commonly known as the contractor workforce. A recent study showed 58% of companies in Asia Pacific are looking to hire contingent workforce employees to alleviate headcount shortages. Contingent workforce adoption was highest in countries like Singapore, Indonesia, Hong Kong and Malaysia. Why is the integration of contingent workers into business’ talent strategy growing in popularity in Asia Pacific (and the world)?
The most common reason for businesses hire contractors is the flexibility that it allows them. On average, 55% of companies surveyed across the region stated this as their top reason for hiring contractors as it makes it easier for companies to upsize or downsize as deemed necessary. This is particularly true for companies in Vietnam (67%) and India (63%).
Close the Skills Gaps
Another big reason companies adopt contingent workers is because it allows them to close the skills gap and help fill specialised roles that require skilled talent. Enlisting the help of contractors fills skills gaps and ensures that there is no disruption to the business or overall operations. On average, 51% of companies stated this as their reason for engaging contingent workers, with the highest responses in Singapore (66%) and Vietnam (63%). In Malaysia, some 64% of companies use a contractor workforce when experiencing a headcount shortage.
Access a Larger Talent Pool
Companies that adopt contingent workers also gain access to in-demand, top-quality, skilled workers that would not otherwise be available to them. Companies also have the option to hire workers on a part-time basis for ad hoc projects. Gaining access to a much larger external pool of talent that your company could not afford full-time, or attracting workers that are not actively looking for jobs as well, is a huge benefit for companies in need of skilled workers to perform specialised roles.
The Rise of the Contingent Workforce
The contingent workforce has been steadily growing over the years across the globe, taking root in Asia Pacific as well. Much of this can be attributed to the growing need for specialised skills such as digital skills. Many organisations look to overseas talent to engage workers that have the skillsets they seek. With remote work growing in popularity, businesses are in an even better position to leverage on overseas talent.
It’s not just companies that benefit from the contingent workforce. Many younger workers are actively seeking to be part of the contingent workforce because of the many benefits it offers; from flexible working hours and the option to work from anywhere, to creating their own path for professional growth.
If companies offer attractive packages for their contract workers, this can be a mutually beneficial arrangement that keeps both employers and employees happy and is a strong talent attraction strategy that companies can adopt.
What is the Best Way to Manage Your Contractors?
While some businesses may choose to manage their contractors into their usual HR systems and practices, many also choose to outsource contractor management (also known as Employee of Record (EOR) services). Engaging contingent workers can help organisations run key strategic projects but managing a contingent workforce can come with considerable legal and administrative burden. Outsourcing engagement, payrolling, administration, compliance and more can help save money and time while also minimising compliance breaches.
Outsourcing contractor management also gives the client access to IT expertise and solutions that a contractor management organisation can deploy, building a seamless engagement experience for contractors. From a smooth onboarding and timesheet system to payroll financing, outsourcing can really make a difference when engaging contingent workers, increasing the efficiency of the onboarding process and mitigating the risk of misclassification throughout an assignment.
Interested to learn more about contingent workforce management and trends? Get in touch with us today at [email protected].