Survey: 66% of freelancers do not have retirement plan

PETALING JAYA: Long term financial sustainability is a critical concern for freelancers, most of whom do not have a retirement plan, a survey commissioned by INTI International University & Colleges revealed.
“Despite the growing popularity of freelancing, long term financial sustainability remains one of the critical concerns for freelancers, with 66% of respondents to the survey not having a retirement plan, while 33% do not have a personal savings plan,” it said in a statement today.
The survey, which involved 300 full-time freelancers from various fields including business, marketing, IT and computer science, culinary arts, and art and design, revealed findings that support the Employees Provident Fund’s (EPF) call to the government for more incentives under retirement savings schemes, and highlights the need for improved financial literacy among Malaysians.
“It is worrying that despite the growth of the freelancing economy in the country, these professionals do not save for retirement, as about 70% of Malaysians are below the global levels of acceptable financial literacy rates,” EPF deputy manager for the strategic management department Wong Theen Chuan said.
“It is important that freelancers should start equipping themselves with sound financial management knowledge as they are at higher risk of not having a long term retirement plan compared with full time employees,” he added.
According to the survey, 65% of freelancers ranked government recognition of freelancing as a formal career as the top of their Budget wish-list, as this would enable them to apply for social security, loans and capital that would facilitate their financial sustainability.
The survey also showed that 68% of freelancers choose to freelance despite the availability of full-time jobs. The EPF in August 2017 reported that the Malaysian freelancing economy has grown by 31%, making it the third largest freelancing market in the region, as reported by Freelancer.com.
“The freelancing economy is changing the way we think about careers and has expanded job prospects beyond traditional employment. With young professionals opting to freelance despite the availability of full time work, the impact of this shift must be given serious consideration if we are to leverage these talents in advancing Malaysia’s economy,” INTI CEO Timothy Bulow said.
The growth of freelancing has created a diversified work exposure, enabling freelancers to learn new skills and insights from client to client. Although freelancers could become real assets to organisations and the economy, there are still gaps in the opportunities and development of freelance professionals in the country.
Trisilco IT Sdn Bhd CEO Melvin Lim said the growth of the digital economy has disrupted the traditional labour market and eased access to explore borderless working opportunities while connectivity has enabled individuals to work whenever and wherever they choose.
“With technology driving the growth of the freelance economy, organisations will see a shift in their talent pipelines and must determine how they will adapt to remain competitive,” he said.
Meanwhile, 80% of survey respondents said skills that were crucial to their success include communications, interpersonal skills and problem solving skills.
However, 58% of respondents felt that tertiary education had not sufficiently equipped them for freelance careers, suggesting that the Malaysian education system is not doing enough to prepare the new generation of professionals who are opting to move beyond traditional employment.
“With continuous changes in the job landscape and economic trends, institutions of higher learning must reinvent their education offerings to meet the widening scope of employability,” said Bulow.