Make full use of gig economy incentives

Despite drawbacks pertaining to its low benefits, the fact that it is a growing contributor to our economy needs to be valued

by SOFEA AZAHAR / graphic by MZUKRI

IN SAILING through the storm brought about by the heavy blow caused by the Covid-19 pandemic and its concomitant Movement Control Order (MCO), which has slightly abated now when current economic condition is seen as gradually picking up and unemployment slowing down, there is a need for the beneficiaries to wholly utilise the incentives provided for the gig economy.

This idea to further normalise the gig economy stemmed from the fact that 26% of the labour force in Malaysia forms part of the growing gig economy, equivalent to four million freelancers.

In terms of growth, the gig economy has expanded 31% in 2017, surpassing conventional workforce.

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.

In the past years, there was a growing number of people joining the gig economy to look for extra incomes or as their main source of income.

As said by the deputy dean of Universiti Putra Malaysia’s Faculty of Human Ecology Mohamad Fazli, 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 locations, the freedom to choose the type of work and the pay that can be lucrative as well.

Now that remote working has emerged as the new norm and a more preferred working style, particularly since the Covid-19 pandemic, the share of gig workers is likely to be more than 26%.

Even before Covid-19, a study by Zurich Insurance has shown that 38% of full-time employees in Malaysia are considering venturing into the gig economy in the next 12 months, higher than the global average of 20%.

According to Gigworks Pte Ltd CEO Glenn Tay, freelancing work will not be diminishing anytime soon, but will continue to grow rapidly as the majority of the labour force is made up of younger generations who tend to be tech savvy, and their priorities are relatively more inclined towards work-life balance.

In other countries, the gig economy trends are also on the rise resulting from the shift of workforce.

Based on the Global Gig-Economy Index, the US ranked first out of 10 fastest-growing freelance markets with revenue growth of 78%, followed by the UK (59%) in the second place, while in Asia, the Philippines is placed sixth with revenue growth of 35% and India with 29%.

This shows that globally, people have gradually made the gig economy a viable option to earn a living.

Statistics have shown that on the global scale, the gig economy tends to attract more young adults — 25-34 years old (46.2%) and 35-44 years old (32.5%).

So, positive perceptions on the gig economy should be instilled within the society, especially when jobs can still be done anywhere while leveraging technology.

Based on a report by a talent out-sourcing 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 has their eye on the gig economy with incentives involving gig workers’ welfare in the shortterm National Economic Recovery Plan, or 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 the Social Security Organisation (Socso) and the Employees’ Provident Fund’s i-Saraan, and RM25 million for Malaysia Digital Economy Corp’s Global Online Workforce, or GLOW, 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 there are only 2,847 workers registered with Socso as of Sept 11 (0.95%) when the target is 300,000.

Additionally, the launch of RM100 million Ministry of Higher Education’s Penjana Career Advancement Programme is rather timely to enhance the freelancing capability of graduates in a gig economy.

This newly announced programme is important to upskill the youngsters, as being in a gig economy also requires specific skill sets. If not addressed, it can end up with freelancers being underpaid or not paid although they are overworked.

According to PayPal Holdings Inc, 58% of freelancers in several SouthEast Asian countries experienced not being paid because they are not taken seriously by the clients.

Hence, 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 the gig economy has its drawbacks pertaining to its low benefits, the fact that it is a growing contributor to our 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. The views expressed are of the writer and do not necessarily reflect the stand of the newspaper’s owners and editorial board.

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