Are companies offering fresh grads contract work as a way to cut costs?

**Natasha Ann Zachariah** (0:07)
It's not an easy time to be a job seeker, especially for a young person who is starting out. Now, they say competition for permanent roles is stiff. Employers are managing manpower costs, dealing with AI disruption, and raising the bar on entry-level hires. Something that young people have to contend with? Contract work. There are more companies offering contract jobs where employees are hired only for a short period of time, maybe a few months or a year or two. But if you're fresh out of school, does the impermanence of contract work worry you?
Is it the best starting point to build your career in a tight job market?
Welcome to another episode of The Usual Place, the podcast where we have real conversations about the headlines. I'm Natasha, and to talk to us today about the contract work experience, I have Seth Ng. So now Seth, you are a fresh graduate from NUS with a degree in sociology, and you're looking for a job. And you have submitted over 20 applications for both permanent and contract full-time positions, but you've not gotten any successful responses yet. So right now, you're not working, but you're focused fully on that job search.

**Seth Ng** (1:08)
Yeah, correct. So mainly I've been trying to find contract work. I think part of it is fueled by like what I'm passionate about or some industries I want to look into.
And yeah, besides that, just enjoying my life right now. Okay.

**Natasha Ann Zachariah** (1:21)
Okay, we'll talk about your experience so far. Next to you on the couch, we have Tyrina Toh. Now, Tyrina, you are a content creator for different businesses, and you graduated from SMU with a double degree in business management, business management and accountancy. So I was like, well, and you have been hustling ever since you, we were in your second year with internships, freelance work and even a perm full-time job after graduation. But you have now since chosen the contract life. Of course. Yes, you're going to tell us all about it. And next to you, last but not least, I have Francois Lancon. Yes, the Regional President of Asia Pacific and Middle East for the ManpowerGroup. Now, ManpowerGroup is a global expert on labor market and employment trends. And you specifically study workforce transformation and the contract work landscape.
So welcome to the show, all of you.
It's an interesting time to be here because yesterday, we saw the news about GovTech, you know, retrenching staff and it's the first of a couple of tranches that they're going to do. So yesterday, 93 people were let go. Francois, I'm looking at you. Should we be worried if the government is like even retrenching staff?

**Francois Lancon** (2:32)
My answer is no, we shouldn't be worried. It's very easy to say when you're sitting in that seat, it's a lot more difficult to see when you're the person who has been retrenched.
The reality is we're in a world where companies need skills and skills are shifting very fast. In the case of GovTech, they need a lot of project people. Now, they're going to need more software engineers. That means a shift of skills. But if you are one of the people being retrenched, most likely you come from a project space, and that means you have a lot of value in the market.
We're going to see a lot of movement in the workforce, and it's not always a bad thing. It's people are building skills, skill portfolios, and to build a portfolio, you have to change companies.

**Natasha Ann Zachariah** (3:19)
Okay, so thank you for that overview of like, so perhaps if some people from GovTech are watching this, they will be like, okay, we can work it out. But today we're here to talk about contract work too. And you know, the ManpowerGroup where you're at Francois, has reported a shift, you know, almost a third of employees in Singapore today are engaging temporary workers, including contractors. You know, has there been a surge in contract jobs, and why is that happening?

**Francois Lancon** (3:44)
Well, there's several reasons, and fundamentally, you have three reasons.
One is a very simple business reason. When the world becomes a little bit more unstable, which it is with geopolitics and everything, companies are a little bit more cautious. So they will err on the side of taking contract workers versus permanent workers because they feel more comfortable.
The second reason is technology, because of all the AI shifts or potential shifts we don't know yet. Then companies are like, what skill do I need? Do I need this skill? Is this skill going to be still relevant in six months? I am not sure, therefore, I'm going to die a temporary person. I need this new skill. It's very expensive. I only need it for six months. I'll go contract. The third one is culture. A lot of younger generation, they don't want a lifetime career. They're okay to build a skill portfolio. So they're okay to do six months here, a year there, another two years there rather than just going lifetime. You know, you join a big company for the rest of your life. That was great 20 years ago. I don't think it's true anymore for the younger generations.