Gig Economy A New Job Trend In Malaysia?

Annie Wong, a 28-year-old freelance singer, emcee, and social media manager got into freelancing through a friend’s recommendation and other word-of-mouth recommendations. Today, her passive income has become a small business with its own website and Facebook page. For the past 9 years, she hustles and works hard on managing this small business on top of a full-time job. Though not many can turn passive income into a small business, this is the reality of many Malaysian youths today.

Freelancing is becoming a job trend that is shaping and developing the gig economy in Malaysia. The term ‘gig economy’ is nothing new but it has been gaining a lot of traction recently as it is becoming a significant contributor to the national economy in Malaysia. According to the World Bank, about 26% of the Malaysian workforce are freelancers and that number
is growing. It is estimated that there are currently more than 160,000 e-hailing drivers in Malaysia. On the surface, the gig economy seems to be dominated by the e-hailing and startups, but its scope is much broader than that as freelancing has been around for decades.

What is Gig Economy?

Merriam-Webster dictionary defines the gig economy as economic activity that involves the use of temporary or freelance workers to perform jobs typically in the service sector. Although the gig economy is predominantly driven by the sharing-economy (in reference to platforms like Grab, Food Panda, and Airbnb), there are also other skill-based “gigs” that have been in the events, media, and marketing industries for a long time. Hence, it covers a broad spectrum from those moonlighting freelancers to full-time freelancers.

There are also various economic reasons that drove the development of gig economy. Besides the rise of tech startups, the increasingly high cost of living and incompatible full-time salaries, as well as the lack of high-skilled workers are factors driving this trend in Malaysia. In short, the gig economy strives when there is massive unemployment or underemployment.

A Freelancer’s View

In an e-mail interview, Annie gave perspective into what it’s like to freelance. She shared that freelancing is becoming a popular choice of work because most jobs can be done remotely. Jobs like graphic design, voiceover, social media management, and many more gives freelancers more flexibility as compared to traditional full-time jobs. Freelancers have control over their work volume, time, price, and value of the services they provide. Moreover, they can work from anywhere in the world.

On the flip side, freelancers face tough competition for projects or jobs and do not have consistent income. Take e-hailing drivers for example, during certain hours, drivers are competing for jobs and they do not always get preferred routes. Similarly, there are only a certain number of events happening in a given period and event organizers or their clients will choose from a selected list of emcees or bands they prefer, but only one of each will get the job. Furthermore, freelancers do not have employee benefits that full-time employees enjoy, such as medical insurance, payroll EPF, SOCSO, and other benefits.

Rising Need to Regulate the Gig Economy

The gig economy opens up opportunities for striving Malaysian youths. Even mothers who choose to care for their young children can be a part of the gig economy to support their families. Freelancers who earn a substantial amount are also subject to pay income taxes in Malaysia. However, their welfare is not protected under existing labour laws.

Taking into account the economic benefits that the gig economy brings when it comes to scaling businesses and contributions to national development, there is a need to regulate it to provide protection for businesses and freelancers. Besides regulating the gig economy, there also needs to be some form of structure in terms of business transactions to manage the gig economy.

In the interview, Annie pointed out that there’s a need for proper gig booking platforms to give businesses and freelancers some form of security, ensuring proper payment and managing expectations in terms of quality of work. In Malaysia, Argentinian based, Workana Sdn Bhd is the only available gig -booking platform that matches companies looking to hire and freelancers who are looking for projects based on skills and experience.

Workana is a platform that facilitates the gig transactions for both parties with a reputation system with reviews for potential clients to consider, as well as a payment security system. In an interview with The Malaysian Reserve, Alejandro Kikuchi, Workana’s Head of International Growth, shared that once a freelancer has won the bid for a project, the company will then pay the full amount while Workana holds the funds in escrow. Once it is completed, the money is paid to the freelancer.

Whether it’s through platforms like Workana, regulation or deregulation, undeniably, more work needs to be done to manage the gig economy. Freelancers also need the same protection as that of full-time employees.