“Gigs”on Demand

The traditional and stable world of work as we know it is slowly but surely displaced by unambiguity and disruption, characterised by short-term contracts and independent “gigs”. In this special feature, HRM Asia unravels the complexities of the gig economy and investigates it from an HR standpoint.

In between meetings and appointments with clients, Shahanand Naidu, 24, who works in his father’s oil and gas consultancy business, also doubles up as a driver with ride-hailing platform Grab.

Naidu’s reasons for signing up to Grab were straightforward.

“There wasn’t any interview to become a driver and there was no hassle. The company doesn’t force you to work a certain number of hours a day, I work as and when I want and it’s extra income for me,” he says.

Naidu is particularly attracted by this flexibility afforded to him, since he’s frequently engaged in meetings with his consultancy clients.

“I can drive till my meeting and once the appointment is over, I can continue driving again. It’s free and easy, and flexible,” he says.

Breaking down the gig economy

Naidu is among the hundreds of thousands of individuals in Singapore taking up such independent “gigs” as and when their schedules permit, and earning some handy fees for their efforts.

In recent years, fashionable terms such as the “gig” or “sharing economy”, have emerged, epitomising how individuals sign up for short-term job assignments, often through third-party apps linking customers and those who have the skills or resources that they are looking for in real time.

The gig economy in Singapore comprises of many actors.

But each individual gig is considered its own contract for service, as stipulated by the Ministry of Manpower (MOM). The independent contractor, who could be a self-employed person or larger vendor, is engaged to undertake an assignment or project for a given fee.

The ministry says such contracts refer to a client-contractor type of relationship. However, individuals involved are not covered by the Singapore Employment Act and therefore not furnished with statutory benefits such as annual leave, medical leave and insurance coverage. They are not eligible for Central Provident Fund (CPF) contributions from their employer.

Those who perform work by way of independent assignments under contracts for service are considered self-employed persons. Those that don’t employ any other workers are considered freelancers in addition to being self-employed.

In June 2016, there were about 180,000 primary freelancers operating their own business or trade in Singapore. This accounted for around eight percent of working residents.

While those participating in the gig economy are not afforded with any employee benefits, it has to be noted that a significant proportion of them are also engaged in traditional employment relationships. These typically represent the majority of their work and income, with freelance gigs supplementing that.

Differing views

Naidu acknowledges he doesn’t receive benefits and isn’t covered under the Employment Act when driving for Grab.

However, he says that is the “whole point” of freelancing.

“When I thought about being a Grab driver, I was prepared for this and I knew what I was heading into,” he shares.

“If I’m given such freedom to drive as and when I want, I cannot expect them to provide me with benefits enjoyed by regular employees who work for a company.”

Naidu says his friends also engage in freelancing work, and are undaunted at the lack of formal protections. “We are young and daring enough to engage in such work and are ready to go with the flow,” he says.

However, not everyone shares the same sentiments.

Deputy Prime Minister Tharman Shanmugaratnam, for example, has noted he is “not yet a fan” of the gig economy.

He argued that businesses were passing on risks to their contract workers, leaving them exposed when work dries up, or when there are accidents on the job. Such workers in the gig economy were at risk of instability in wages as well as not being equipped for retirement because of the lack of social security contributions, he told the McKinsey Innovation Forum last October.

Ang Hin Kee, Assistant Director-General of the National Trades Union Congress (NTUC), has been one of the most vocal proponents for increased protection of freelancers in Singapore.

He says freelancers can now be classified into two groups, namely: free agent freelancers and “tied” freelancers.

Free agent freelancers own their business, are free to name the prices for the services offered, and can work with many different customers at any one time.

They are also capable of looking after their own medical and retirement needs.

However, the NTUC is keen to focus its attention on the “tied” freelancers.

These workers have no say in the price of services offered and must comply with the buyer’s price. They also do not have statutory benefits, and cannot seek recourse in the Labour Court for any wage or employment-related disputes.

Ang says more freelancers are finding themselves in work situations where their income is heavily dependent on a few major clients or buyers, and have to comply with terms set mostly by them.

He also notes that changes in employment and business models have seen a new intermediary emerge.

“These are the aggregators, mostly operating via apps or websites, where they match buyers and sellers of goods and services,” he says.

“As these buyers are able to exert substantial control over the livelihood of their freelancers, they should co-share the responsibility of ensuring that these working people receive protection in areas such as medical and retirement coverage”.

“At the same time, HR professionals who are seeing these phenomena in their organisations can also play a part by looking at how to take care of these workers,” he says.

HR can take proactive steps to take care of these freelancers by ensuring they are protected by insurance and work in safe environments, and also by promoting CPF contributions among freelancers to encourage them to take charge of their retirement needs.

“All working people – regardless of the nature of their work – should enjoy fair work terms and be able to prepare themselves for retirement.”

Buyers and Sellers

HRM Asia spoke to several business leaders that are part of the gig economy ecosystem.

Rebecca Chiu is the CEO of MyWork Global, a third party mobile app that posts a wide variety of ad-hoc jobs and connects freelancers to businesses requiring manpower.

She says both the jobseekers and the companies involved are given the flexibility to mutually agree on their terms of engagement.

Concurrently, MyWork plays a part to foster mutually beneficial agreements by reminding companies of their commitments to work within MOM’s rules around part-time work arrangements.

The MyWork app clearly details the description of each job posting, which includes hourly rates and gross salary calculation.

“This gives job seekers clarity on the expectation of the job and salary compensated after every shift completion,” says Chiu.

With a liquid workforce, she says participating companies are able to bring down their fixed wage costs and also better allocate tasks to both salaried and freelance staff.

“By redesigning jobs, full timers are able to focus on core business functions, while freelancers can be delegated to perform support specific functions,” she explains. “Businesses, as a result, have the opportunity to become more agile and lean.”

Hiring freelancers through such platforms also means having access to a database of on-demand workers, where the recruitment and selection processes are automated. Chiu says this saves on the time and effort required to manually manage a limited group of part-time workers.

She says workers undertaking gig-style arrangements on independent platforms could face uneven cash-flows.

“Companies issue payments at different times of the month, depending on their individual payment structures. As such, freelancers might encounter inconsistencies in getting paid ‘on time’,” says Chiu.

However, work undertaken through the MyWork app is protected under the MOM Employment Act. This means participating freelancers are guaranteed to be credited within seven days of the salary period. MyWork’s tracking system gives jobseekers a complete and accurate list of completed work.

Michael Tan, CEO of Zap Delivery, says that this particular platform is “informational” and does not directly employ freelancers. As such, it is not governed by employment laws. Zap Delivery matches customers who need delivery services to freelancers who are able to provide them. The “employment” is between those two parties only.

“We provide an alternative channel for people to monetise their spare time and assets to make extra income,” Tan says. “So, the Employment Act and its associated requirements and benefits do not impact us in any way, whether positive or negative.”

Despite having over 3,200 freelancers signed onto the platform, Tan says there are still instances of unfulfilled jobs.

“The demand and supply is dynamic, and as such, it can be unpredictable.

“Sometimes there are many takers for a job and sometimes there are no takers.

“So, for people who want to tap onto the large pool of freelancers, there is still some risk of non-fulfilment of their requirements,” he explains.

Yeo Shiau Chin, Singapore’s country manager for Fuss, a third-party platform that connects house cleaning customers with those willing to undertake such assignments, says there are some regulations for both parties to abide by. This is particularly important since the work being carried out is generally in very personal domains.

Fuss conducts face-to-face interviews before onboarding freelancers onto its platform.

The company conducts police record checks on all of its cleaners, and checks on their knowledge and understanding of house-cleaning skills.

“We do a suitability check and evaluate if they take care of their own personal cleanliness and hygiene. Visible tattoos and dyed hair may not be suitable for such a role, especially when they are going into customers’ homes,” Yeo says.

Those who make the grade are afforded some protections through the platform.

“We have a list of tasks that are strictly prohibited on our site and this is made known to customers and housekeepers. However, we also inform the housekeepers that it is up to their own discretion when it comes to their safety, and they should reject the customers if they feel at danger in any of the tasks they undertake,” Yeo shares.

Freelance housekeepers also have the option of choosing to receive CPF contributions through Fuss, although Yeo says most of them prefer to take their payments as cash.

“Based on the hourly rate that is offered, they have the option, should they choose for us to pay CPF. As such, their take home will be lowered accordingly (80% take home with 20% and additional employer CPF contributions into their CPF accounts), and we will pay the necessary employer portion,” says Yeo.

One drawback for Fuss is that working with freelancers does not give them the full control of housekeepers’ schedules, or enable them to mandate their cleaning styles and methodologies.

Andrew Khoo, Chief Operating Officer at Swensen’s, says the organisation utilises a job portal called JobsOnDemand to access casual labour.

JobsOnDemand allows the restaurant chain to hire freelance workers on extremely short notice periods,  in order to help fill last-minute staff shortages.

The jobs are posted by outlet managers, and interested JobsOnDemand members apply via the mobile app. Once selected, they head straight to the outlet to fulfill the job requirements, whether it is kitchenhand, service, or cleaning duties, and are paid the next working day.

“Our managers have used JobsOnDemand to find casual workers both on a last-minute basis, as well as when they’re planning their weekly rosters,” says Khoo. “It has served us well as these members help ease the work burden from our regular staff”.

“They’re able to help with the menial, time-consuming yet necessary operational duties such as table bussing, food running, dishwashing, hence freeing up our regular staff to dedicate more time and attention to our customers.”

Khoo says Swensen’s and its holding company ABR Holdings were concerned that JobsOnDemand workers would have insurance coverage protecting both parties in the event of any workplace accidents. The platform was able to provide an innovative “pay-as-you-work” insurance policy to cover its members, giving ABR Holdings the confidence to add this type of labour.

“We made a detailed risk assessment of the JobsOnDemand platform prior to coming on board as a partner, ensuring that fundamental areas such as workplace injury compensation and overtime issues were addressed,” Khoo says. “We understood these fundamental areas that protect the workers were not available in a typical freelancer contract for services.”

Khoo says one potential disadvantage of being an employer in the gig economy is that freelancers are not as well-versed in the operational specifics of ABR Holdings’ business or its working culture.

Potential risks

Gloria James-Civetta, Managing Partner of law firm Gloria James-Civetta & Co, is adamant that freelancers should not be afforded the same rights as regular employees.

“They are enjoying the benefits of working as an individual or sole proprietor where they are not governed or restricted by any terms governing their engagement,” she says.

She also notes there is currently no authoritative body implementing safeguards for freelancers in Singapore and suggests a tribunal should be set up to deal with disputes. This would give freelancers a form of recourse that is tailored to their specific needs and the financial risks of freelance work.

Of course, there are risks for organisations hiring freelance labour also. One is that freelancers may be exposed or privy to confidential information in the course of delivering their services.

James-Civetta says each contract for service should include a confidentiality clause. This would prevent freelancers from using proprietary information to gain business for themselves or engage with the company’s clients directly.

Ravi Chandran Assistant Dean of Undergraduate Studies, NUS Business School, agrees.

“Since they are not employees, unless the contract expressly prohibits it – there is a greater chance that the freelancers could also be working for competitors,” he says.

“Freelancers could also affect the image of the company when their service is not on par. Yet it may be more difficult for the organisation to impose controls and supervision on them as compared to regular salaried employees.”

For his part, Naidu believes freelancers and those engaging in independent work in the gig economy need to take responsibility for their own lives.

“If you have the discipline to set aside the money earned for personal savings and CPF contributions, then it shouldn’t be a problem,” he says.

Analysing the Workday advantage

Sandeep Aggarwal, Chief Financial Officer of Aon-Hewitt Asia-Pacific, shares his thoughts on the Workday finance and HR analytics platform. He says the cloud-based system is intuitive and easy-to-use, but still provides powerful insights across the functions.

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