Short-term employment looks set to become a long-term staffing solution in Hong Kong, says Pallavi Anand, head of recruitment firm Robert Half. Despite the increase of multinational offices in the city, global economic uncertainty is prompting organisations to hold back on permanent headcount.
The increase in the number of multinational corporations (MNCs) opening up offices in Hong Kong does not necessarily translate to increase in headcount, says Anand. 'Hong Kong's proximity to the mainland will make [it] a goldmine of contract employees. Hence, contracting will be the number one recruitment tool and hiring strategy.'
A recent survey by Robert Half shows that one in five or 20 per cent of local finance and accounting hiring managers are hiring, or considering hiring, contract or temporary staff to address their skills shortages.
Kelly Services Hong Kong, which outsources workers mainly for information technology positions, recorded a 62 per cent jump in contracting this year versus last year, with growth in banking and finance, government and utilities.
Market players say contract and temp staff are useful during periods of excessive work, such as the end of the financial year or during special projects.
'Contingent hiring allows companies to acquire talent to reach business goals without committing to long-term headcount,' says Lancy Chui, managing director of ManpowerGroup for Hong Kong, Macau and Vietnam. 'It's a solution that helps organisations scale back quickly and easily.'
In the West, contingent staffing is a mature industry, often rewarding employees with higher remuneration than permanent staffing, so many opt to build careers on contingent work.
A study conducted in Britain by The Freelancer and Contractor Services Association this March showed that one in every 20 workers in Britain is a contractor. Meanwhile, about 25 per cent of the United States workforce is estimated to be contingent workers.
Asia, however, has been slow to key into the contingent solution. A study by Manpower released in late 2009 - covering 454 Hong Kong employers - showed that 55 per cent of local employers think contingent employment is not an important part of their staffing plan.
Nevertheless, there has been an upward trend in the practice over 2010 and 2011. 'We are seeing both MNCs and local SMEs [small and medium-sized enterprises] hiring cautiously for permanent positions,' says Chui. 'Meanwhile, the pace of hiring has been healthy for contract hires, especially for front-line, client servicing and revenue-generating roles.'
For employers, contract employment is an effective recruitment tool, to see whether a person can do the things they say that they can, and to see how the candidate fits with the organisational culture.
'Asia's security-driven employment culture makes contracting an unpopular option for job seekers,' says Anand, adding that it nevertheless has benefits, such as the employees being able to evaluate the job, organisation and industry, to break into niche markets, or to return to employment after a break.
But in terms of remuneration, Asia's contingent workers earn less than their Western counterparts. 'In mature markets, contract staff are paid better than permanent staff,' says Anand. 'In Asia, they aren't, though Asia's contract workers get annual leave, sick leave and public holidays.'
In terms of remuneration, Asian temps are paid 15 per cent less than permanent staff, but this is changing, especially at senior level, she adds.
Anand says that 2012 will be the year of contract staffing.