30% of Organisations in Malaysia Sees an Increase in Contract Hires

Page Contracting Malaysia sees a new trend since the beginning of the pandemic

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Marlinda Zulkifli, Head of Page Contracting Malaysia

Professional contracting recruitment services firm Page Contracting Malaysia launched the Talent On-Demand report, with a keen eye on the employment of Malaysian professionals in contingent, temporary, short-term or interim positions. 

It is found that 62% of companies responded to say that contracting roles are now included in their headcount.

Marlinda Zulkifli, Head of Page Contracting Malaysia says, “Even before COVID-19 hit in 2020, many organisations were already employing workers on contract as a way to flex and scale their talent needs. With the pandemic, it has further highlighted the need for companies to reassess their growth strategy and operational costs – and one component that stood out was the deployment of talent both in the short and medium term. Companies are facing greater levels of scrutiny on permanent headcount numbers, while others are engaging temporary and contract staff to execute ad-hoc projects.”

In recent times, contract hires serve as a strategic staffing solution for a scalable workforce. More companies are turning to contracting professionals to manage or work on new projects. On the whole, 58% of organisations say they use contractors for project implementation and digital transformation all of which were accelerated due to COVID-19 and the need to facilitate remote working. On average, 3 in 5 contractors will receive a contract extension in Malaysia, and 2 in 5 get converted to permanent roles.

In addition to creating an agile solution to any headcount challenges Malaysia’s companies may face, Marlinda comments, “An emerging trend that we’re definitely seeing is that organisations are now increasingly considering interim staff for senior positions such as C-Suite roles. It offers many advantages, as they’re able to benefit from specialised skillsets or knowledge for a specific period of time.”

According to the report, hiring workers on contract can sometimes be more challenging than expected. 1 in 4 companies expressed that they had difficulties in attracting contingent workers for short-term, contract roles. For a company to position itself as a desirable employer, it needs to present its benefits package, career opportunities, and company culture and environment in ways that resonate with the contract workers.

Marlinda observes that as organisations look beyond their permanent employees to create an agile workforce, they need to change their ways of engaging with the contracting workforce. Traditionally, companies may undermanage non-payroll staff as temporary workers who usually only stay in a company for a short period of time. However, under management can hinder productivity and performance, preventing the integration of contract workers into the company’s overall workforce.”

It is encouraging to note that 70% of companies surveyed by Page Contracting Malaysia furnish contract hires with training, while 40% provide team-building exercises to help integrate contracting staff with the broader team. In addition, some companies offer a buddy system or create an environment to help ensure equality between permanent and temporary workers.

One of the primary competitive elements that differentiate an independent contractor from a full-time employee is the benefits package. Of the companies who responded, the top three contractor benefits provided by organisations in Malaysia include annual leave (80%), medical leave (77%) as well as training and development (59%).

“While an increasing percentage of the Malaysian workforce is becoming receptive to the idea of taking on contract positions, a common misconception is that contract workers are only secondary employees in an organisation. Although there are still opportunities for improvement, our findings reflect a positive trend, with most Malaysian companies offering on-par benefits for their contract workers. Notably, 22% offer higher wages for contract employees. On top of that, 73% of companies offer the same annual leave for contract workers, 85% equip them with training on par with what permanent employees get, and 80% provide flexible work arrangements,” said Marlinda.