The COVID-19 pandemic has seen more companies in the country hiring employees on a contract basis, compared to on a permanent basis.

This was revealed in the Talent On-Demand report released by professional contracting recruitment services firm, Page Contracting Malaysia recently. The report is based on data collated from 205 companies across the country from May to June this year.

According to firm's head Marlinda Zulkifli, many organisations in the country were already employing contractors as a way to flex and scale their operational costs, even before the pandemic hit.

"The pandemic 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," she said in a statement.

The report revealed that 58 percent of organisations surveyed said that they use contractors for project implementation and digital transormation - of which were accelerated due to COVID-19 and the need to facilitate remote working.

"One average, three in five contractors will receive a contract extension, and two in five get converted to permanent roles."

This hiring on contract trend applies to all levels of the work force, including for senior positions such as C-suite (executive level manager) roles.

The trend, however, does come with its own set of challenges.

One in four companies surveyed expressed that they had difficulties in attracting workers for short-term, contract roles, especially when it comes to benefits package and career advancement considerations.

"As organisations look beyond their permanent employees to create an agile workforce, they need to change their way of engaging with the contracting workforce.

"Traditionally, companies may undermanage non-payroll staff as temporary workers usually only stay in a company for a short period of time. However, undermanagement can hinder productivity and performance, preventing the integration of contractors into the company’s overall workforce," Marlinda said.

She noted that 70 percent of companies surveyed by Page Contracting Malaysia provide training to contract workers, while 40 percent provide team-building exercises to help integrate them 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."

Many of the companies surveyed also provide annual and medial leaves, as well as other perks like training and development and flexible work arrangements, almost on par with permanent workers, Marlinda added.

You can view the Talent On-Demand report in full HERE.

Photo source: