Singapore’s Growing Gig Economy: Why More Workers Are Turning to Freelancing

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By Kalyan Kumar

The gig economy, or freelance economy, is growing fast in Singapore. This emerging global trend is driven by the digital age, which has enabled the decoupling of job and location.

For freelancers, the growing gig economy is a blessing as it removes the tedium of working for a single employer for a long time. It also offers more choice, freedom, rest and scope for better earnings.

Big Boom in Singapore

According to Minister of Manpower Mr Lim Swee Say, as of 2016 Singapore has approximately 200,000 freelancing workers – some 9 percent of Singaporean working population. Of this group, 85 percent, or 167,000 workers are primary freelancers, who freelance as their main source of income. They include professionals such as insurance agents, private car drivers, hawkers and private tutors.

About 1.5 percent of working residents are secondary freelancers. These are part-timers including students, retirees, and housewives who take up side jobs to earn additional income.

How do we know the freelance economy is burgeoning in Singapore? According to a Maybank Kim Eng report, the soaring number of private-hire car registrants is one source of proof.

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As of July 2017, the Land Transport Authority received 50,600 applications for the Private Hire Car Driver’s Vocational Licence – five times more than the 10,500 recorded in the August 2015 and July 2016 period.

The report also noted that increasing numbers of young graduates and millennials are entering the freelance market.

Approximately 47 percent of Institute of Technical Education, 35 percent of polytechnic and 10 percent of university graduates entered the part-time, freelance job market in 2016. This represents a two-fold increase compared to a decade ago.

“Singapore’s gig workforce is likely to continue rising in the near term, as more start-ups venture into new business and companies try to manage costs,” stated the Maybank Kim Eng report.

Transforming the Labour Market

Experts say that the gig economy’s expansion in Singapore has helped offset the softening labour market, by providing retrenched and unemployed personnel with alternate sources of income.

In addition, businesses are increasingly leaning toward hiring freelancers, as it helps cut costs in staff benefits, office space and training.

While freelancing was limited to handymen, photographers, and musicians in the past, the trend has now engulfed many sectors. These include food delivery services like Deliveroo and Foodpanda, transport services like Uber and Grab, and home rental services like Airbnb.

Credit: Food Panda

On most accounts, the number of freelancers in each sector is growing. Since entering the Singapore market five years ago, Uber and Grab have already amassed a combined fleet of 41,300 private-hire cars, which outnumbers the number of taxis by 1.5 times.

In the food delivery sector, Foodpanda saw its delivery fleet surge by 2,500 riders in 2016, of which 90 percent are freelancers.

Challenges of Freelancing

While self-employed persons (SEPs) have greater flexibility in their working hours and job scope, they also face real issues such as poor job stability, the absence of fixed salary, leave, or medical benefits, and little protection under labour laws.

These basic rights are covered in the Singapore Employment Act, which protects workers on a contract of service with an employer. However, the Act does not cover SEPs, or independent contractors engaged for a fee to carry out an assignment or project.

Deputy Prime Minister Tharman Shanmugaratnam touched upon these factors while addressing the McKinsey Innovation Forum in October 2016. Saying he is “no fan of the gig economy”, Mr Shanmugaratnam noted that some of these freelancers are forced into the gig economy as they cannot find a full-time job.

To address these problems, the Singapore government recently accepted a slew of recommendations by the Tripartite Workgroup (TWG) on the challenges faced by SEPs.

These recommendations, which were addressed at a recent parliamentary debate on March 5, include a Tripartite Standard that requires standard written contracts between SEPs and businesses engaging their services; making insurance products for SEPs in the event of prolonged illness or injury; and extending mediation services to SEPs in the setting of payment disputes.

Singapore Companies Looking for Temps

With more companies in Singapore engaging professionals on contract, the opportunities for specialist short-term roles are growing.

In the setting of Singapore’s volatile business market, contracting allows businesses greater flexibility in meeting acute demands for employees. It also allows businesses to “test out” their contracting professionals before converting them to permanent hires.

Hiring companies are also realising they need to provide competitive incentives to attract the right talent. “We are now seeing contracting professionals being offered completion bonuses, flexible-benefits and other benefits associated with permanent employment,” notes Mellissa Mayne, associate director of Page Personnel Singapore.

At only 9 percent, freelancers still make up a minority of the working population in Singapore, as compared to Europe and the US where freelancers account for 30 percent of the working population.

However, experts agree that an active and thriving freelance population is an advantage to the country’s economy. Empowering SEPs and ensuring they have the resources to overcome their challenges is thus important to us all.


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