How Singapore’s SMEs can benefit from the rise of the gig economy

How Singapore’s SMEs can benefit from the rise of the gig economy

In March 2017, Manpower Minister Lim Swee Say noted that there were 200,000 freelancers in Singapore, accounting for about nine per cent of the workforce.

While most people think of Grab or GoJek drivers, or insurance agents, the pool of these freelancers includes a much wider range of talent. From photographers to web designers and copywriters, this large mix of freelancers can provide vital support elements in the growth of local Small to Medium Enterprises (SMEs).

In particular, the advantages freelancers provide to SMEs include:

  1. Wider talent pool without adding to payroll
  2. Interim measures
  3. Test before hiring
  4. Freelancers can provide wider industry insights

1. Wider talent pool without adding to payroll


Singapore SMEs are benefitting from a wide range of talent without adding to payroll costs, by working with freelancers.A common challenge facing SMEs is manpower. Hiring requires a company to do more than just pay the worker; there is also the issue of healthcare benefits (e.g. group insurance costs or workman’s compensation), CPF contributions, and labour guidelines on off days, annual leave, etc.

An SME that wants to branch out, such as by going digital, may need expertise that its current staff does not have. But at the same time, there may not be room on the payroll. This is where freelancers come in as an ideal solution.

SMEs can hire freelancers that have the right talents, but without having to put them on payroll. Of course, SMEs should still treat them fairly (e.g. pay them on time, not enforce unfair terms like non-compete clauses, and so forth). But for the most part, freelancers see to their own insurance and CPF contributions; and most bring skill sets that are uncommon among regular employees (e.g. social media influencers who specialise in Instagram marketing, or illustrators who specialise in technical drawings of engines).


2. Interim measures

freelancer 2

It’s not feasible for SMEs to try and do everything in-house.
External experts can provide a cost-effective, per-project solutions.

Sometimes, an SME has temporary projects that require a specialised skillset. A common example is web development – an SME may need a developer to create a website for a new trial product, which may or may not be continued.

Another example is an SME that is a tax service, which wants to create a series of educational videos for marketing or internal training.

It would be impractical for these SMEs to permanently hire the talent, as the need is just temporary. Freelancers can fill this need on a project basis, acting as “expertise on demand”.

In addition, note that hiring a freelancer is also cheaper than contracting an entire agency to perform a task. If only a few pages in a brochure need copyediting, for example, it may be more cost-effective to contract a single copywriter than an entire ad agency.

3. Test before hiring

Through initial contract work, SMEs can determine whether a prospect is a good fit before they hire.

In some cases, these freelancers may be contract workers actively seek employment; wherein their time with an SME allows the company to “test before hiring”.

For example, if a freelance delivery driver turns out to be exceptional, a courier company can offer the driver a full-time contract, rather than chancing a new staff member with a job interview.

This is especially helpful if a freelancer has worked with a company for a significant length of time, such as a one-year or two-year project. The SME can then hire someone who is already (somewhat) integrated into the corporate culture, and is proven to be a good worker.

Freelancers looking to transition to full-time workers this way can find help, to increase their prospects. e2i has resources and workshops to help the self-employed, as well as to raise employability for those who want to go full-time.

4. Freelancers can provide wider industry insights

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Want more industry insights? Freelancers have often worked with a wider range of companies than your in-house employees.

SMEs would do well to remember that freelancers – particularly those with several years of experience – have worked with multiple clients in the same industry. For example, a photographer might have worked with dozens of media companies and ad agencies, giving her significant (if unintended) insight on marketing trends.

Most freelancers are happy to share these insights (barring those protected by non-disclosure issues). This can help SMEs to get a sense of the undercurrent in their industry, and on which trends are starting up or dying down.

This differ greatly from asking their own employees, as freelancers have actually been inside the offices of the different companies. Most know more about the processes and strategies of different firms than the average worker.

Ms. Tracy Tan, a career coach from the ICT & Media team at e2i, shared about how some businesses managed to gain the experience of a seasoned Director, without having to make room on the Board:

“I coached an IT Director who recently got retrenched from a large MNC. He already had 20 years of IT experience in big mulit-nationals, and a rewarding career journey. Being in his 50s, he was not keen to work in an IT environment any longer, but rather as a business coach to guide companies in change management or operation excellence. He enjoyed coaching, but in the business context.

I suggested he market himself on the freelance job portals or Linkedin, because I know SMEs could be interested in engaging his services.

SMEs can tap into the services of such experienced professionals, without bearing the cost of taking them on full-time. This can be done to improve their organisation’s processes, for example, on a project basis.”

It’s time for SMEs to think beyond nine-to-five staff when hiring

Keep your company dynamic and flexible. Freelancers can counter common constraints on staffing.

Freelancers can provide SMEs with an unparalleled degree of speed and flexibility. If needed, a freelancer can be contacted to start work almost immediately, with a single phone call. There is no complex onboarding process as with an employee.

This allows SMEs to support their expansion in a cost-effective way, or to try new approaches without needing an in-house team of experts. SME owners will find this to be an edge, in an economy where tech disruptions seem to come faster each year.

Are you a freelancer, or looking to become one? Contact NTUC’s Freelancers and Self-Employed Unit (UFSE) for more resources. UFSE helps freelancers in a range of areas, from skill development to protecting your legal rights.

Businesses needing to tap on freelancing services:

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