Gig work is here to stay. Whether it’s because full-time jobs are scarce, or that some people prefer flexibility, freelance projects are the prime source of income for many around the world. But for a company, it can be a headache to manage a fleet of temporary workers, particularly when all of them work remotely.
Wisnu Nugrahadi, CEO and co-founder of the on-demand workforce platform Sampingan, understands this. “I dealt a lot with freelancers, mostly blue-collar workers, in my previous work in a ride-hailing unicorn,” he told CrASIA“I kept on facing the same issues across all the [outsourcing company] vendors that we worked with.”
One problem was his team couldn’t check freelancers’ backgrounds and monitor their work progress. This often led to work not meeting the company’s standards and expectations, while there was also a high turnover and rotation of freelancers, Nugrahadi said.
“We found that the root of the turnover issue was because the outsourcing vendors took a large commission from the workers, like around 30% to 40%,” he said, “That wasn’t ideal for the workers, who still had to think about expenses like transportation.”
Eager to remedy the problem, Nugrahadi reached out to two of his friends from university, Margana Mohamad and Dimas Pramudya, to figure out possible solutions. They found out that the exorbitant commission cut was rooted in ineffective operational processes that elevated costs. The trio decided to set up a company to streamline the process using digital solutions, and Sampingan was launched in late 2018.
Streamlining gig worker management
Sampingan started out as a job listing portal, but the founding team decided to extend Sampingan’s business into three verticals in 2019: Manpower, Solutions, and Systems.
Manpower is a marketplace platform that connects companies with eligible workers and handles administrative processes like staffing and payroll. Solutions is a management service where Sampingan deploys its team to administer various business processes, from project planning to producing final reports. Lastly, Systems, launched towards the end of 2020, is a software-as-a-service (SaaS) product for workforce management, which covers performance trackers, attendance sheets, and customizable dashboards.
“It is usually used by established companies with their internal team, to manage and rate workers’ performance,” Nugrahadi said.
The three verticals are integrated to provide a “complete system for clients,” Nugrahadi added. Companies can list a freelance project using the Manpower feature and supervise the project through Solutions, while workers can upload their progress and attendance via the Systems platform.
Sampingan charges a commission fee of about 10% to 20% based on the project for its sourcing service, Manpower. For Solutions, clients pay for management services according to the project, while Systems charges a monthly subscription based on the company’s headcount.
Sampingan operates in 80 cities across Indonesia, but tier-1 cities like Jakarta, Bandung, and Surabaya generate most of the usage. The startup already counts more than 850,000 registered temporary workers and over 150 companies using its platform.
Sampingan’s clients mostly operate in logistics, transportation, and the fast-moving consumer goods (FMCG) industry. For registered workers, the firm assists them to register in the National Health Insurance (JKN) program, as companies don’t usually provide health insurance for temporary workers, Nugrahadi said.
In Indonesia, there are other job marketplaces such as Job2Go and Singapore-based Workmate, while Gadjian assists companies with payroll & human resource management. However, according to Nugrahadi, Sampingan’s comparative advantage lies in its extensive coverage of services, all from the same provider.
Growing market due to changing behavior
Earlier this month, Sampingan bagged USD 5 million in a Series A round led by Altara Ventures, with participation from Golden Gate Ventures, Antler, and other investors. Nugrahadi said that most of the fresh capital will go to the engineering team, as the company plans to develop more features.
“Based on our internal research, corporate clients prefer to work with only one solution provider,” the CEO said. “That’s why we are continuously improving our service to cover all their demands.”
The COVID-19 pandemic is accelerating Sampingan’s growth. As businesses fold and the unemployment rate surges, more people are looking for alternative income sources, usually from short-term projects. The company reported that the number of app downloads increased fourfold in 2020, topping 1 million.
Nugrahadi believes the industry’s future is bright because temporary gigs and freelancing are becoming the norm around the world. More than seven out of ten people in Indonesia, in particular, are of working age, mostly millennials. Furthermore, the country’s Central Statistical Agency (BPS) recorded 33.34 million freelancers in 2020, 26% more than last year.
Nugrahadi thinks that the millennials (those born between 1981 and 1996) are disrupting the traditional workplaces as they prefer project-based or short-term contracts. “They tend to look for flexibility in their workplace, so there’s a behavioral change that stimulates the demand for gig worker management apps,” he said. “The market will only keep growing.”
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.