The EPF in August 2017 reports that the Malaysian freelancing economy has grown by 31%
BY DASHVEENJIT KAUR/Pic by ISMAIL CHE RUS
More Malaysians prefer to do freelance work, with more than a third of Malaysia’s workforce recorded to be freelancers over the past year.
The Employees Provident Fund (EPF) in August 2017 reported that the Malaysian freelancing economy has grown by 31%.
This makes Malaysia the third largest freelancing market in the region, as reported by Freelancer.com.
A recent survey by INTI International University and Colleges revealed that 68% of its 300 respondents chose freelancing as their first choice of work, despite the availability of full-time jobs.
“With young professionals opting to freelance in spite of 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 Tim Bulow (pic) said at a panel discussion on “Jobs of the Future Freelance Economy” yesterday.
The survey uncovers insights on the freelancing landscape in Malaysia, as well as the potential role of tertiary education institutions and the government in responding to the growth of this sector. Also, 58% of respondents felt that tertiary education has not sufficiently equipped them for freelance careers.
Those respondents suggested that the Malaysian education system is not doing enough to prepare this 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,” he said.
Cilisos Media Sdn Bhd editor-in-chief Lau Chak Onn believes that the job market has changed, thus resulting in more workers opting for freelancing
jobs. “With few ‘safe jobs’ available, more Malaysians are now jumping on the attractively liberal freelance market.
“Calling your own hours, keeping 100% of the revenue…working from hipster cafes may seem like a dream job, but do freelancers really know what they are getting themselves into?” Lau said.
EPF strategic management department deputy manager Wong Theen Chuan said the government needs to establish more incentives under retirement savings schemes, highlighting the need for improved financial literacy among Malaysians for the sustainability of local freelancers.
“While the freelancing economy is growing at a rapid pace, lack of financial literacy within Malaysians is evident,” Wong said, citing the survey that noted long-term financial sustainability remains one of the critical concerns for freelancers.
The survey showed that 66% of respondents do not have a retirement plan, while 33% have no personal savings plan.
“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.
“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 to full-time employees,” he said.
Are Freelancers Protected?
With expectations that Malaysia’s Budget 2018 will be people-centric, with a focus on small and medium enterprise benefits, Wong believes Malaysian freelancers are among those who will potentially be the most impacted by today’s announcement.
Collectively, Wong and Lau agree that the government should do more to protect the self-employed — similar as they would to employees with full-time jobs.
“In the freelance economy, workers inevitably face periods without pay. But unemployment benefits are not available to most freelancers, so they virtually have no safety net.
“Even when they are working, freelancers don’t enjoy the essential healthcare and retirement benefits associated with salaried employment and traditional employees. Freelancers have little recourse against wage theft,” Lau said.
Subsequently, 65% of freelancers surveyed ranked government recognition of freelancing as a formal career at the top of their budget wishlist, indicating that this would enable them to apply for social security, loans and capital that would facilitate their financial sustainability.
“Some policies by the government for these freelancers need to be put in place,” Wong told reporters on the sidelines after the panel discussion.
The EPF, he said, has been working with the Credit Counselling and Debt Management Agency on a module to educate the public on debt and financial management.
“And we are also working with agencies such as Bank Negara Malaysia and the Securities Commission Malaysia to push all these financial education products to the public.
“The EPF has retirement advisory services, which the public can get information from on how to plan for retirement,” said Wong.
He further said the Self-Employment Social Security Act 2017, which seeks to provide the Social Security Organisation protection to self-employed taxi drivers and e-hailing service providers Uber and Grab, should be extended to other sectors.
On the other hand, Lau feels that the government should not amend rules on loan borrowing for freelancers, as it may not be good forthe self-employed — especially those in the younger age group — in the long run.
“If loans are so easy to get, then I think we will be facing debts issues — especially when freelancers do not have a definite paycheck.
“Instead, there should be a tax exemption from the government for freelancers that take up courses on financial literacy and anything related to their job fields,” he added.