GIG economy is widely defined as “platform economy”, “on-demand economy” and “sharing economy” that refers to the demand and supply of short-term or task-based working activities.
About 26% of the labour force in Malaysia, equivalent to four million people, reportedly work in the gig economy and the number is growing.
Some of these people joined the gig economy to look for extra income while others regard it as their main source of income.
Universiti Putra Malaysia’s Faculty of Human Ecology deputy dean Mohamad Fazli said working part-time and freelancing have been around for ages.
These jobs have become more pronounced due to the rise of digital platforms.
It is also driven by the flexibility in terms of working hours and work location, the freedom to choose the type of work and the pay can be lucrative as well.
Now that remote working has emerged as the new norm and a preferred working style, particularly since the Covid-19 pandemic, the share of gig workers is likely to be more than 26%.
Even before the pandemic, a study by Zurich Insurance found 38% of full-time employees in Malaysia are considering a foray into gig economy in the next 12 months, higher than the global average of 20%.
According to Gigworks CEO Glenn Tay, freelancing will not be diminishing anytime soon but will continue to grow rapidly as majority of the labour force is made up of young people who tend to be tech-savvy and their priorities are more inclined towards work-life balance.
In other countries, gig economy trends are also on the rise resulting from the shift of workforce.
Based on the Global Gig-Economy Index, the United States ranked first out of 10 fastest-growing freelance markets with revenue growth of 78%, followed by the United Kingdom (59%) in the second place.
In Asia, the Philippines is placed sixth with revenue growth of 35% while India ranks seventh with 29%.
This shows that globally, people have gradually come to realise that gig economy is a viable option to earn a living.
Statistics shown that the gig economy tends to attract more young adults: 25-34 years (46.2%) and 35-44 (32.5%).
So, positive perception on gig economy should be instilled within the society especially when jobs can still be done anywhere while leveraging on technology.
Based on a report by a talent outsourcing and consultancy group KellyOCG, 84% of hiring managers in Asia Pacific outsource to freelancers as a means to save cost, stimulate innovation and keep a competitive advantage.
In Malaysia, it is good to see the government is helping the gig economy with incentives involving gig workers’ welfare in the National Economic Reform Plan (Penjana) package worth RM75 million.
Measures include a matching grant of up to RM50 million for gig economy platforms that contribute to the workers through Socso and EPF’s i-Saraan, and RM25 million for MDEC’s Global Online Workforce programmes.
These measures seem to be attractive as beneficiaries’ social safety will be partly taken care of.
However, comprehensive outreach always seems to be the problem when it comes to policy execution.
In this case, awareness and information about the incentives might have not fully reached the gig workers as only 2,847 of them are registered with Socso as of Sept 11 (0.95%) when the target is 300,000.
The launch of RM100 million Ministry of Higher Education’s Penjana Career Advancement Programme (KPT-CAP) is rather timely to enhance the freelancing capability of graduates.
This newly-announced programme is important to upskill young people, as being in the gig economy requires specific skill sets.
If not addressed, freelancers can end up being underpaid or not paid although they overworked.
According to PayPal, 58% of freelancers in several Southeast Asian countries experienced not being paid because they are not taken seriously by clients.
This calls for an efficient utilisation of the existing measures that had been announced by the government and for the leading government agencies to monitor the effectiveness and the level of awareness among the target group so that the benefits would reach them.
Although gig economy has its drawbacks such as the lack of employee benefits, the fact that it is a growing contributor to the national economy needs to be valued.
Sofea Azahar is research analyst at EMIR Research, a think tank focused on strategic policy recommendations based on rigorous research.