“Gig Economy”is "a labour market characterized by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs"i.
Hong Kong is seen embracing the free agent trend the most in APAC, with 55% respondents agreeing that most people are looking for a flexible-contract based role than a traditional permanent full-time roleii. We have seen many multinational companies extensively increasing their hiring of contract workers to complement and gap bridging the skills of their existing workforce. A recent survey indicated that 54% of employers in Hong Kong have indicated that they have hired contingent staff in the past yeariii.
Three reasons why the gig economy post a positive effect in a company's growth
1. Diversity and Inclusion (DNI)
Workplace diversity and inclusion is understanding, accepting, valuing differences regardless of employee’s background, gender, race, language, religion, etc., and providing an environment where employees feel valued and supported to participate and contribute.
Gig economy allows companies to recruit from a diverse pool of candidates specifically for projects or on a contractual basis. As such, employers can recruit candidates specifically based on their prior work/project experiences, caliber, expertise and talents. This forms a diversified workforce with different backgrounds and perspectives that are qualified to work on projects and arrive at winning business solutions when working as a team.
This facilitates the promotion of DNI, which in turn also:
- Provides a bigger talent pool as it attracts a wider range of qualified candidates
- Increases vitality of employees, i.e. workers' efficiency and creating a competitive advantage for the company
- Promotes innovation and fosters a creative and innovative workplace
- Includes more diversified sets of skills, which means new business opportunities
- Improves the company's business reputation
And, the final result will be increasing business opportunities and profitability for the company.
2. Agile and Flexible Hiring Model
In the past, work tasks were very operational-oriented. Each employee had a certain amount of tasks to accomplish every day, routine and repetitive, and doing the same thing throughout his/her entire employment or career. However, amidst changes as business environment and market evolves, updates on regulation and compliance requirements, automation and digitalization trends, etc., employees' jobs are no longer operational (most of them are now automated or outsourced), but instead more strategic and project-oriented.
Companies that do not have sufficient resources or talents to cater for such changes tend to hire workers with more diversified skills set and expertise to bring in value and best practices to their existing team. This, therefore promotes the rising trend of the gig economy.
The gig economy does not only offer the flexibility of employment on demand, it also helps bringing in talents to bridge the resources and talent gaps via the supply of experienced giggers (independent workers who are used to work on short-to-medium term projects/engagements on a non-permanent basis).
These giggers will have accumulated a diversified range and/or some specific knowledge and experience from working on different projects in different types of companies and/or organizations in different industries. Such experiences and knowledge will be of great value to the hiring companies as the giggers are able to share past experiences and give examples of good practices, which in turn will enhance the company's skills, enriching the team's knowledge and helping them to overcome/prevent project-related hurdles.
This agile and flexible hiring model also helps companies to lower their sink-in costs as the gig economy facilitates quicker decision making. It is easy for companies to discontinue the working relationship with a gigger if worker is not performing well, and they can also consider changing the gigger to a permanent staff if worker is a good performer without additional talent searching costs.
3. Cost, Cost, Cost
Maintenance Cost
For hiring giggers, companies are not required nor legally obliged to pay orientation costs, benefits costs such as paid study, annual, sick and/or maternity/paternity leaves etc., nor provide any ongoing trainings and continued professional developments. There will also be no future obligations in providing longer term benefits, such as long service leave entitlements and/or severance related expenditures.
It is also important to highlight that giggers are not expecting to receive these types of benefits from the hiring companies as they are seeking for a different set of values that flexible and agile work can provide.
Lower Fixed Costs
The new resourcing model in the gig economy will inevitably help companies to lower their fixed costs. For example, with rental, companies can operate in a smaller office area suitable to the size of their core workforce.
Giggers will report duties only when companies have resourcing needs or projects, and therefore companies can consider having a service office or additional work space just for the duration of the giggers' employments, instead of committing to rent a large office space permanently. This also allows the company to be more resilient to economic and business changes as they are not tied down to overwhelming fixed costs.
Cost Efficiency
Gig economy allows companies to hire at value-for-money, as they are able to pay workers based on the market price, and not subjected to expectations of consistent salary increments from permanent and long serviced employees. Most of the time, salary increments for permanent staff is due to the length of service time, but not based on the employees' contributions at work.
While the gig economy does not take into consideration factors such as employee loyalty towards their companies, and past contributions, but focusing purely on a cost perspective, companies can pay market rates based on the candidate's experiences, capabilities and/or expertise.
How can BDO help?
Gig economy posts a challenge on effective matching between the giggers and those Corporations that have demands for talents/resources on an acute and timely manner. So, how to find the right candidate for your business?
BDO Hong Kong's Professional Resources Solutions (“PRS”) acts as a dock and provides a platform that bridges the supplies and demands in the Gig Economy. We have been diligently servicing clients with significant demands for professional resources and talents over the last half decade.
As a professional firm, we differentiate ourselves by adopting a consultative and advisory model in the provision of our “Match Making” services. For all cases, we will meet with our clients to obtain a good and thorough understanding of their needs and/or problems, as well as looking into their expectations of caliber, skill-set and etc..
The members of our PRS team are all seasoned professionals and advisors whom have the experiences in diagnosing the problems and issues that the clients are facing. They will then work with the talent acquisition team to identify one or a team of potential consultant(s) to work on the client's projects. In addition to experiences and skill set, we will also take note of whether the potential candidate will fit into the client company's culture and other aspects, such as language capabilities and other expertise. Our mission is to bridge or even close the expectation gap between our clients and potential candidates to create a “Perfect Match”.
PRS is not about executive search/recruitment service, despite we do provide such services for our existing clients. Our main focus is on professional secondment and advisory, where we will be deploying consultants under the employment of BDO onto clients' projects on a short-to-medium term basis. In addition, since we are a full fledge accounting and advisory firm, we are able to provide comprehensive business solutions to best fit our clients' needs. Our clients can benefit from PRS by releasing from the pressure of human resource and talent shortages, which in turn allows them to become more focus on business developments and the strategic growth of their businesses.
Further benefits that you will gain from BDO is our comprehensive and close—knitted international network. With presences in more than 160 countries globally, we are basically “Where you wanted us to be”. We solemnly believe that we are your ideal business partner to work with on resourcing related solutions around the globe.
i https://www.bbc.com/news/business-38930048
ii 'Gig Economy: How Free Agents are Redefining Work’ survey published in 2018 by PERSOLKELLY, the regional headquarters of Kelly Services HK.
iii 2016 Hays Asia Salary Guide