Developing the Gig Economy in Indonesia: Startup Stories

Gig work is here to stay. Because full-time jobs are in short supply or some people prefer flexibility, freelance projects are a major source of income for many around the world. But for a company, managing temporary workers can be a headache, especially when they all work remotely.

Wisnu Nugrahadi, CEO and founder of on-demand staffing platform Sampingan, understands this. “In my previous job at ride-hailing unicorn, I talked a lot with freelancers, mostly blue-collar workers,” he said. CASIA“I was having the same issues throughout. [outsourcing company] Vendors we have worked with.

One problem was that his team couldn’t check freelancers’ backgrounds and track their career progress. This often leads to work not meeting company standards and expectations, and high turnover and turnover of freelancers, Nugrahadi said.

“The origin of the transfer is that the foreign suppliers took a huge commission from the workers, about 30 to 40 percent,” he said. Regarding expenses like transportation”

Eager to solve the problem, Nugrahadi approached two of his friends from the university, Margana Mohammed and Dimas Pramudia, to find solutions. They found that an inflated commission cut resulted in increased costs through inefficient processes. The three decided to form a company to simplify the process using digital solutions, and Sampingan was launched in late 2018.

Side by side, co-founders Dimas Pramudia Putra (front-right), Wisnu Nugrahadi (front-center) and Margana Mohammed (front-left) with the startup’s management team. Photo courtesy of Side

Facilitate gig worker management

Sampingan started as a job listing portal, but the founding team decided to expand Sampingan’s business to three verticals in 2019: HR, Solutions and Systems.

HR is a marketplace platform that connects companies with qualified employees and handles administrative processes such as staffing and payroll. Solutions Sampingan is a management service that deploys the team and manages various work processes from project planning to final reporting. Finally, Systems launched in late 2020 is a software-as-a-service (SaaS) product for workforce management, covering performance trackers, tracking sheets and customizable dashboards.

“It is often used by established companies to manage and measure employee performance with their internal team,” Nugrahadi said.

The three verticals are integrated into “a complete system for customers,” Nugrahadi added. Companies can list a freelance project using the HR feature and track the project through Solutions, while employees can upload their progress and attendance through the system platform.

Sampingan charges a commission of 10% to 20% depending on the project. For solutions, customers pay for management services based on the project, Systems charges a monthly subscription based on the company’s main inventory.

Sampingan operates in 80 cities across Indonesia, but tier-1 cities such as Jakarta, Bandung and Surabaya generate most of its usage. The startup already has more than 850,000 registered temporary workers and more than 150 companies using its platform.

Sampingan’s clients mostly operate in the logistics, transportation and fast-moving consumer goods (FMCG) industries. For registered workers, companies usually do not provide health insurance to temporary workers, so the organization helps them enroll in the National Health Insurance (JKN) program, Nugrahadi said.

There are other job marketplaces in Indonesia, such as Job2Go and Singapore-based Workmate, while Gadjian helps companies with payroll and HR management. However, according to Nugrahadi, Sampingan’s comparative advantage is its wide coverage of services, all from one provider.

Reception newspaper

The market is growing due to behavioral changes

Earlier this month, Sampingan raised $5 million in a series one round led by Altara Ventures with participation from Golden Gate Ventures, Antler and other investors. Nugrahadi said 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 customers prefer to work with only one solution provider,” said the CEO. “That’s why we are constantly improving our services to cover all their needs.”

The Covid-19 pandemic is accelerating Sampinga’s growth. As businesses grow and the unemployment rate rises, many people look for alternative sources of income, usually from short-term projects. The company claims that the number of app downloads has quadrupled in 2020; This is more than 1 million.

Nugrahadi believes the future of the industry is bright as temporary gigs and freelancing are becoming more common worldwide. Especially in Indonesia, more than seven out of ten people are of working age, mostly millennials. In addition, the country’s Central Statistics Agency recorded 33.34 million freelancers in 2020, a 26 percent increase from last year.

Nugrahadi thinks that millennials (those born between 1981 and 1996) are disrupting the traditional workplace as they prefer project-based or short-term contracts. “They want flexibility in their workplace, so there’s a behavioral shift fueling demand for gig workforce management apps,” he said. “The market will only continue to grow.”

This article is part of KrASIA’s “Startup Stories” series, where KrASIA writers talk to founders of tech companies in South and Southeast Asia.

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