November 4, 2011 / 6:54 AM / 6 years ago

Asia job hunters choosing temp work over permanence

6 Min Read

HONG KONG (Reuters) - Cary Lam quit the security of a permanent job in the IT industry after eight years for a better opportunity that until recently, was a rarity across most of Asia: a temporary one-year contract offer.

With the move, Lam, 37, joined the growing ranks of workers in Asia willing to turn their backs on the stability of a permanent "iron rice bowl" post for the uncertainty of contract employment -- with the added bonus of more exhilarating work and a chance to build their careers.

"In my mind, there's not much of a difference between permanent and contract jobs. It's not about security, it's about the overhead in changing jobs," said Lam, an HSBC project manager, adding that his job decision hinged on the nature of the position and the company, rather than its shelf life.

Contract employment in the professional sector is growing across Asia, and recruiters from Beijing to Singapore say that a more eager workforce paired with mounting demand from employers for short term labor is giving companies and workers in the region an increasingly competitive edge in the global professional job scene.

Temporary jobs in East Asia cities are starting to attract more candidates for more project-based offers, sweetened by the esteem of working for big multinational names.

"There's a cultural cringe that is slowing it down ... but over time, it will become accepted," said Andrew Banks, founder and chairman of HR and recruitment firm Talent2.

According to Korea Labor Institute statistics as of August 2010, the amount of non-regular workers in South Korea has nearly doubled since 2002, accounting for 33.4 percent of the country's 17.05 million workers, up from 27.4 percent.

Available numbers for the professional sector show there is still a low temporary to permanent jobs ratio in Asia. But evidence shows that both employers and professionals have turned more to contracting since the global financial crisis erupted in the wake of the Lehman Brothers collapse in 2008.

Current contract employment uptake in Hong Kong for recruitment firm Robert Walters is 15 percent against permanent employment, up from zero in 2008.

"Prior to the financial crisis, there was almost no contract market in Hong Kong at the professional level," said Sommer Owens, Hong Kong's manager for contracts at Robert Walters, which brought its contracting desk to Hong Kong in 2009.

Contract work in project-based jobs now spans the banking, financial services, construction, consulting and, in particular, IT industries.

"We for example had 30 people in Macau, recruiting 4,500 people for a casino, in just nine months following the planning phase and once the work was done the client was able to take over the process themselves," Banks, of Talent2, said.

Growing Demand, Cost Cutting

Asia suffered a squeeze on permanent head count and an oversupply of skilled labor after 2008 that drove more firms to increase cheaper contract hiring, trailing Western economies who experienced a similar shift in the 1990s.

The number of openings for contractors for staffing giant Kelly Services in Hong Kong grew 60 percent this year compared to the same period in 2010, said its Hong Kong contracting business head Regina Lai.

Small and medium-sized firms look to trim costs and leave wiggle room due to tight budgets. Contractors also provide a store of backup talent as employers scale back until the economy rebounds.

"The trend is that even the state sector (in China) is learning how to reduce costs using contract employment as a buffer to find out about their workers, whether they like them," said Wu Xiaogang, professor of social science at Hong Kong University of Science and Technology.

Employers can save from 8 to 24 percent with a contractor through fewer bonuses and incentives benefits, according to Adecco's CEO for Northeast Asia, Cindy Chen. In some cases, an employer can save from 10 to 20 percent on training and promotions that would not apply to a contract employee.

Higher salaries make the attractive posts to job hunters, though places like the UK -- which recruiters say has a roughly 50 percent contract market -- generally pays more to contractors than Asian employers. Others stress resume-padding names.

What's in It for Me

Philip Chung, 29, accepted a 12-month contract with Bank of America Merrill Lynch in Hong Kong after turning down a permanent desk position from another bank.

On a resume "it doesn't say contract or perm, it just says what company you're working for", noted Chung, who works in applications support.

In Hong Kong, where the financial and banking sectors are main drivers of economic development, Chung's attitude toward temporary work presages a shift toward job hopping.

A survey of banking and financial services industry employers from China, Hong Kong and Singapore found only 13 percent of managerial workers stay in a post for more than four years, citing career advancement as a top reason, said labor market research publication Hudson Report in September.

A flexible workforce is a pillar of competitiveness that can enable firms in Asia to be financially competitive against Western counterparts, pooling in a higher volume of highly skilled workers to the region.

"The Asian countries that recognize this trend," Banks said, "and make their work practices, payroll practices, and immigration practices aligned, are going to find their workforces will be more competitive faster."

Editing by Brian Rhoads and Michael Flaherty

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