The rent-a-manager reality

“Even PMEs are offering their services in the gig economy, in a new trend known as transition management”

When we think about freelancers, it is usually the GrabCar driver, the Foodpanda deliveryman or the creative designer that comes to mind. But increasingly, more professionals, managers and executives (PMEs) – be it by choice or by necessity – are taking the leap to offer their services on demand.

Enter transition managers, who are “rented” out to companies during a time of need, for example to help them tide over a crisis or to roll out a restructuring programme. These highly skilled managers lend their specific expertise to work as part of the company for a particular period and then move on, just like every other freelancer out there.

It is one of the latest developments in the gig economy, a trend where full-time employees are replaced by independent contract workers, thanks to technology disruptions and dismal economic conditions.

But while the concept is relatively unknown in Singapore and the region, Patrick Laredo, CEO of transition management company X-PM which engages these freelance managers, expects it to pick up and “become an important part of the economy in the next 10 years”.

Understanding transition management

In today’s tumultuous climate where changes are constantly taking place, companies are under pressure to act fast and find new ways to get things done. But on the other hand, hiring a high-level executive with the expertise to spearhead a particular mission or carry out a transformation project is a lengthy process.

Mr Laredo says this is where transition management, also known as interim management in some parts of the world, can fill the gap. “What we achieve through executive transition management is to provide an immediate answer. You have a company which absolutely needs that experience either to turn around its subsidiary or to invest in India or to deploy a computer programme. You will rent that manager for his skills for the duration of the project.”

These transition managers are parachuted into businesses which need high-level executives at short notice on a full-time, but temporary, basis. Mr Laredo says that this approach allows companies to keep control of their operations without incurring permanent fixed costs.

He adds: “What’s important is that it should not be seen as an outsourcing activity, like when you call in a consultant. The consultant is always external to the company, whereas the (transition) manager comes in, and is part of the company for the duration of the project.”

In other words, transition managers are essentially embedded into the client’s organisation instead of being separate. They are empowered to drive the project and achieve certain goals, whereas consultants make recommendations. But he is also cognisant of the concerns that potentially hold companies from engaging temporary executives.

He recounts some that he has heard over the years: “Why should I expose my business to somebody from the outside? What happens if the manager I just hired is better than me?”

While there are no easy answers, Mr Laredo is confident that as the economy progresses with time, such a concept will become more accepted as a way for businesses to cope with increasing demands.

The PME and the gig economy

Transition managers are just one part of a growing pool of PMEs in a gig economy that include consultants and the like. Even though Mr Laredo predicts that transition management will pick up soon in the rest of the world, he does not believe freelancing will ever truly replace full-time jobs. “I don’t think it will ever be the norm because there will be a place for permanent, if not lifetime, employment. Not everything can switch over to contract employment.”

During a dialogue at the McKinsey Innovation forum held in October 2016, Deputy Prime Minister Tharman Shanmugaratnam said: “I’m not yet a fan of the gig economy.” He pointed out that some of those who are in the gig economy were there because they could not get a full-time job. Such workers take on more risk and serve the interest of the company, he argued.

His remarks were not unsubstantiated; a 2016 study by the McKinsey Global Institute found that 20-30 per cent of the 162 million people in Europe and the United States were doing some form of independent work. For about 44 per cent, this was their main income. Some 30 per cent do so out of necessity, not choice.

In Singapore, there is no detailed study or statistics of those in the gig economy. But as retrenchments and unemployment go up, it is hard to imagine why PMEs would willingly trade relative job security, benefits and employment rights for a freelancing model that may not pay off.

HR professional Foo Chek Wee gave his two cents worth on the matter. “Put it this way. If there’s plentiful of jobs for them to choose from, would Singaporeans still choose to be freelancers?

“Yes, there’s a trend of more PMEs turning to the gig economy. But this is due to a higher rate of retrenchment, and less because of work-life balance. The trend is only sustainable if the stigma of temporary jobs is removed, and there’s a higher diversity of gigs available – we can’t all be Uber drivers.”

While transition managers engaged by X-PM are able to turn to the company to negotiate on contract matters, a problem with the gig economy is that most independent workers have to rely on themselves to ensure that they get paid and have their rights protected. Employment laws on benefits have yet to be fully updated to accommodate this group of workers, which makes them vulnerable to abuse by errant employers.

Even as the Singapore government relooks labour policy and unions jump in to assist such workers, it is clear that the gig economy will continue to evolve.

With new developments such as transition managers taking place, it is also a sign for workers themselves – PMEs included – to rethink their notions of jobs and become more agile in the face of disruptions.

Mr Laredo concludes: “A lot of people would like to get a permanent job, then realise they have to adapt to the changing world. In the short term, people will feel it’s difficult to change to that kind of (gig) economy. But in the longer term, they will feel stronger.”


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