Singapore sees continuing demand for contract hires

Summary:Strong momentum for contract work in country as flexibility remains key attraction for both companies and candidates, recruiters observe.

Demand for contract hires in Singapore has not lost its momentum since the end of the last economic recession, as companies continue to employ IT professionals on contract to ensure an appropriately skilled workforce for projects, and candidates seek out assignments that offer flexibility and exposure. However, employees on contract point out the lack of stability that a permanent position can offer.

The contract job market for IT professionals in Singapore has "matured tremendously" over the last five years, both from a candidate and employer's perspectives, said Niharika Chaturvedi, manager of IT contract division at recruitment firm Robert Walters Singapore.

During the 2008-2009 economic downturn, companies turned to employing IT staff on a contract basis to overcome hiring freeze and restrictions for important projects. Today, businesses continue to perceive contract hiring as a faster way to sign on new staff, in comparison to permanent headcounts which typically need longer timeline to be approved, Chaturvedi told ZDNet Asia in an e-mail interview.

In general, employers look to contract hiring as a way to grow teams and add skills as well as headcount to their organizations, she said.

IT professionals are also "happy and willing" to take up contract work to gain exposure to advanced technologies and key projects, particularly when it comes to multinational corporations (MNCs) that set up their IT teams or run IT projects in Singapore. Chaturvedi noted that such roles enable candidates to add value to their profiles.

According to Robert Walters Salary Survey 2011, salaries and contract jobs here were on the rise as candidates looked to gain more varied experience and exposure.

Flexibility, cost-efficiency for enterprises
Melissa Norman, managing director of recruitment firm Kelly Services Singapore and Malaysia, said growing interest from organizations toward contract IT staff stems from having the flexibility to hire according to their needs without taking on additional permanent headcount.

This is particularly ideal for short-term projects and ensures efficiency in managing costs and keeping operational costs at its optimum level, Norman said.

As the IT industry moves at a rapid pace and technology constantly evolves, new skillsets are constantly required. This means permanent staff will need regular training which requires investment in time and resources, she noted.

She added that many enterprises choose to employ contract staff so as to hire in tandem to the needs of the business at any given time, enabling them to have the required workforce already equipped with the appropriate and necessary skillsets to perform the job at hand.

Matthew Kovac, regional director of marketing and corporate communications at Wincor Nixdorf, said: "Complementing our permanent teams with contract IT staff definitely has its advantages in managing budgets for particular projects. Hiring staff on contract basis has also given us some flexibility in terms of manpower planning, utilization rates per employee and enhanced productivity."

A specialist in retail banking technology, Wincor Nixdorf offers contract IT positions in order to recruit people for project-based implementations that have a specific duration period, Kovac told ZDNet Asia. Contract hires also help relieve additional workload of permanent employees during major projects, or can stand in as temporary replacements for key staff on extended leave of absence such as illness or maternity, he said.

Asked if contract hiring at the company increased post-recession, the executive replied: "Contract work has and will continue to be quite common in our business due to the variable nature of customer installations for retailers and banks across the region, and we will continue to have a mix of contract and full-time employees."

Flexible hours main draw for contract staff
Kelly Services' Norman noted that the benefit of flexibility also suits many IT professionals, who are then able to work for selected periods of time and take time between contracts. In addition, such flexible work arrangement offers them better work-life balance, she said.

This option is especially appealing to Generation Y workers who expect their work to accommodate their personal life, not vice versa, she said, referring to findings from a Kelly Services report on Gen Ys in the workplace.

Gibson Tang, 35, started taking on contract jobs in 2007, after working full-time for three years as a programmer at an IT company, due to the flexible hours. "I was bit jaded of the long working hours in my previous job," he told ZDNet Asia in an e-mail.

Tang's contract-based work encompassed mobile app and Web site development as well as database consultancy until mid-2008 when he started his own company Azukisoft, which develops mobile applications.

He pointed to flexible hours and the "chance to gain more exposure and try something new" as the top benefits of contract work.

In fact, the high demand for contract work led Tang to set up Azukisoft and hire more developers to handle "the feast of contract work that was coming in" as the Apple iPhone gained popularity.

He added that when he started taking on contract work around 2007, there were not many contract workers in the market, but this changed during the 2008 recession. "A lot of people realized that job security is fading into something of a myth, and [started] trying their hands at contract work."

Although there is more competition now in the contract market, the terms are better compared to the past as more companies recognize contract work as a good alternative to hiring permanent staff, he added.

To retain contract staff, Robert Walters' Chaturvedi advised companies to offer attractive remuneration and acknowledgement of good work, which prevent these workers from being lured to permanent roles elsewhere.

She noted that contract salaries and rates had increased by about 20 percent over the last few years. "It is important for employers to realize that candidates who take up contract work are giving up on variable and fixed bonuses, benefits for family and other allowances. A contract offer should thus be competitive," she suggested.

Lack of stability main drawback
Despite the attractiveness of contract jobs, Tang said the downside is that there are typically "feast and famine periods" due to the lack of stability with such employment. There may also not be any staff benefits and bonuses, he added.

While he encouraged IT professionals to "try out contract work for a while" as it would help build up non-IT skills such as business networking, negotiation and project management, he said contract work might not be suitable for everyone.

"Quite a few IT professionals are open to the idea compared to when I started a few years ago, but these tend to be from the younger crowd as once a person gets older, they have more responsibilities and contract work may not seem so attractive compared to a permanent job," Tang said.

Philip Soriano, 27, a former contract IT professional, held similar sentiments. After working as a contract software support specialist for Wincor Nixdorf since April 2010, he took on a permanent position as a software engineer within the company in May this year.

"Contract work can provide a great deal of variety by working for different companies, but the benefit of a permanent position is to help build a business over the long-term and grow professionally with the company," Soriano told ZDNet Asia.

Topics: IT Employment, CXO

About

Jamie Yap covers the compelling and sometimes convoluted cross-section of IT and homo sapiens, which really refers to technology careers, startups, Internet, social media, mobile tech, and privacy stickles. She has interviewed suit-wearing C-level executives from major corporations as well as jeans-wearing entrepreneurs of startups. Prior... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.