The term “job losses” seems to have entrenched itself in the business lexicon these days. With the economic fallout from the Covid-19 pandemic dealing a crippling blow to industries such as retail, hospitality and F&B, many businesses globally are executing painful salary cuts and job cuts. Some are on the brink of folding.

However, both local and international experts have also commented that this, in fact, is the best time to rethink business models and prepare for recovery to build more robust and sustainable enterprises.

At PeopleSearch, among our clients, we are seeing a rise in hiring in sectors such as healthcare, IT and e-commerce. This doesn’t come as a surprise considering how the effects of the pandemic are reframing humanity’s demands.

But amid the increased hiring, we are seeing a refreshing trend emerge. Many of these enterprises are choosing to exercise flexible staffing options to hire specialists. Others, even in industries that are not doing as well, are doing the same as part of their preparations for recovery.

They cite a common reason that demonstrates long-term strategic planning.

RIGIDITY HAS BEEN PROVEN DANGEROUS

The traditional employment model calls for calibrating your headcount based on business opportunities and growth.

However, we’ve seen how this model can ignite a disruptive rhythm of hiring and retrenchments, and hiring again when the economy recovers.

Rehiring and training when the economy picks up can be costly. The Society for Human Resource Management states that generally, it could cost about 50 per cent of an employee’s annual salary to find a direct replacement.

As such, among our client pool, more are working to develop a hybrid model of full-time employees and skilled contract professionals. This approach allows firms of various sizes in any industry to “upsize” or “downsize” based on dynamic demands.

Some are concerned that this implies contract professionals would be the first to go when companies need to downsize.

We recommend a nuanced approach to downsizing. Is the contract professional’s contribution key to sustaining your business through a downturn, taking you to recovery or helping you ride the wave when recovery takes place? Companies should hang on to such talent even during a crisis.

The larger objective is to optimise talent acquisition and management in order to build an enduring business model.

THE NEW INEVITABLE NORM

According to research cited by the Civil Service College, Singapore, “traditional permanent employment globally is fracturing.” Contract-based employment is increasing in the US, Europe and Asia.

It would seem that this shift has been involuntary as the research says, “these trends are partly attributable to domestic labour market conditions, where a lack of viable permanent alternatives following the global financial crisis has resulted in elevated unemployment rates.”

But after several economic crises, we have to consider that this might be the new, more viable norm.

As such, while businesses employ a more dynamic model, contract workers’ rights need to be protected as well. For instance, in Singapore, Tripartite Guidelines on the Employment of Term Contract Employees were issued in recent years.

In our experience, many job seekers traditionally turn down contract employment, choosing to hold out for something long-term that may or may not come. But among the candidates we manage, up to 40 per cent on short-term contracts end up being offered contract extensions or permanent contracts, whether within the same company or other companies, within a month.

This should be a source of comfort.

If your company is looking into flexible staffing, or if you’re a jobseeker considering contract-based employment to improve your agility, here are some advantages to consider:

 Employers:

1. Save money on fixed personnel costs to pay only for the talent you need at the appropriate and optimal times.

2. Acquire skilled talent even during a hiring freeze as you won’t have to be constrained by headcount quotas.

3. Acquire specialists more nimbly if a new project entails having specialised knowledge or skills that are absent within your organisation.

4. Try out candidates you’re not sure about hiring permanently. The contract period allows you to assess their suitability for your medium to long-term needs.

5. Channel full-time employees to other key tasks. When you have specialists or temporary staff  helping with the workload, your full-time employees can be freed up to deal with other strategic priorities.

6. Improve your competitive edge overall as a result of greater nimbleness and agility.

 Employees/Job seekers:

1. Higher base salaries are possible when you’re a contract-based employee as many employers realise you will not be receiving large bonuses that they might pay to permanent employees. It is common for them to channel some of those savings into your base salary.

2. The ability to work on short-term assignments and earn an income while looking for a permanent position if one isn’t available immediately.

3. The ability to gain varied work experiences and develop new skills.

4. The ability to showcase your experience and skills to strengthen your professional reputation and network.

5. The flexibility to try out and assess if the job or workplace culture is suitable for you. If it isn’t, a short-term contract allows you to exit gracefully when the contract comes to an end.

6. If the contract comes with flexible work hours, you can capitalise on it by using your free time to acquire other skills, experiences and income streams.

There is one caveat – contracts should be fair to both parties. With governments more acutely addressing terms for contract workers through employment guidelines and legislation, employers need to exercise initiative in meeting and even exceeding mandatory requirements in order to be able attract a steady stream of high-performing contract professionals.

For assistance in getting the flexibility you need, get in touch now.

E-mail us at contactSG@peoplesearch.jobs.