Improving the lot of on-demand workers

Feb 26, 2015

EDITORIAL

THE creeping use of on-demand workers linked to firms via smartphones and laptops might look like an appealing option for Singapore businesses in a labour- tight market. It smacks of innovation, taps deep skills wherever located, reins in costs and could improve labour productivity. The other side of the coin must also be considered: difficulty in controlling quality and verifying authenticity, loss of exclusivity of services, and possible compromising of strategic business information.

For workers who turn to freelancing, there is a loss of job security, Central Provident Fund contributions, medical insurance and paid leave. Worse, they risk getting paid less than fair value as they strive to outbid each other to lay hands on work.

Freelancers cost less than full-time staff, do not take up office space and can be hired quickly, sometimes at a moment's notice through a match online. Little wonder then that many start-ups and some established firms are increasingly turning to this category of workers for a variety of purposes. Elance-oDesk, a leading online platform, offers four million companies the chance to work with 10 million freelancers worldwide, with about 37,000 based here last year.

Technology can in this way create work but it can also diminish the lot of workers - unless steps are taken to protect freelancers. In the United States, which is in the vanguard of this phenomenon, up to a third of workers qualify as freelancers and there is even a union for them that provides portable health, disability and life insurance, as well as retirement accounts.

Commendably, the National Trades Union Congress and some women's groups have lobbied for medical benefits, injury compensation and other protection for freelancers here. As many of them are vulnerable, plans to amend the Employment Act to better meet their needs are welcome indeed.

Freelancers are part of a wider shift towards outsourcing and contract work as businesses cut costs and seek flexibility amid greater economic volatility and rising competition. That flexibility might suit some job seekers who, for various reasons, do not want to be tied to rigid work routines. But the process of change should not short-change freelance workers. Bereft of the key benefits that employers traditionally provide, the costs of their health care and retirement needs might have to be socialised over time. Another concern is that as the pool of freelancers grows rapidly, employers might be tempted to even cut back on standard benefits for full-time employees.

The tripartite alliance has an important role to play in helping to better regulate labour relations as the future of work changes in significant ways.