Malaysia’s economy has witnessed steady growth in recent years, yet the challenge of stagnant unemployment rates persists, posing a critical concern for policymakers and businesses alike. As the country strives for economic prosperity and workforce stability, Malaysian companies play a pivotal role in addressing this issue.
Despite Malaysia’s unemployment rate remaining at 3.3 per cent, Malaysian companies and the government have taken the first steps to reduce the number of unemployed by introducing initiatives in the business and gig economy. Initiatives such as JaminKerja, are created to increase job opportunities for the unemployed, targeted towards local workers.
The gig economy has emerged as a prominent force and solution, offering both opportunities and challenges for companies and workers alike. Based on a study by the Employees Provident Fund (EPF), it is estimated that gig workers will account for 40 per cent of employed workers in Malaysia within five years, twice the global average.
Additionally, the widespread use of smartphones and the availability of high-speed internet has made it easier for individuals to access gig platforms leading to a boom in the gig economy, with the local gig economy being valued at RM1.33 billion (approximately US$281.54 million).
The gig economy also offers flexibility during work, not normalising the usual business hours but providing workers with the ability to choose when, where, and how much they work, allowing them to balance work with personal commitments or to pursue multiple gigs simultaneously.
Also Read: Malaysian golf course booking platform Deemples nets US$2M from V Ventures
Despite the gig economy thriving, there are still several challenges that the gig economy poses that need to be addressed. In this article, we will delve into the current limitations of the gig economy and how Malaysian companies aim to solve these challenges.
The downsides of working in the gig economy
There are around 2.2 million documented migrant workers in Malaysia, with the majority of them being in the gig economy as it is difficult for unskilled workers of foreign nationality to obtain a full-time working job. Most migrant workers are satisfied with the minimum working conditions in Malaysia. In contrast to their country of origin, Malaysia is considered to be hospitable with a decent standard of living.
Malaysia also relies heavily on foreign workers, with the labour industry having the highest demand for them. The reliance on foreign workers causes a lack of job opportunities for Malaysian workers as foreign workers are viewed as a cheaper option compared to their domestic counterparts. Therefore, companies in Malaysia prioritise hiring foreign workers for gig economy work.
The gig economy also has its limitations, affecting both foreign and domestic workers which include:
Lack of job security
Gig workers often face uncertainty and instability in terms of job security. They may experience periods of inconsistent income, limited access to benefits such as health insurance and retirement plans, and vulnerability to changes in demand or market conditions.
Gig workers are vulnerable to market changes, shifts in demand and economic downturns. Changes in consumer behaviour, technological advancements, or industry disruptions can directly impact gig workers’ ability to secure work opportunities and maintain a steady income.
Limited access to benefits
Gig workers often do not have access to the same benefits as traditional employees, such as health insurance, paid leave, retirement plans, and worker’s compensation. This lack of benefits can significantly impact gig workers’ financial security, well-being, and quality of life.
The absence of benefits and protections can contribute to income instability for gig workers. Without benefits such as unemployment insurance or worker’s compensation, gig workers may face financial challenges during periods of unemployment, injury, or unforeseen circumstances.
Skill underutilisation
Gig workers may not always have the opportunity to fully utilise their skills and expertise in gig assignments. They may be assigned to repetitive or low-skilled tasks, limiting their potential for career advancement and skill development.
Furthermore, the lack of proper certification for gig jobs in the plantation sector prevents workers from earning a higher pay rate. Without recognised certifications, gig workers in plantations struggle to demonstrate their skills and value, leading to lower compensation and fewer opportunities for professional growth.
Local workers who work in the gig economy will then miss out on the opportunity to learn the necessary skills to adapt to other gigs that may require different skills, limiting the workers to only work in gigs that require common skills.
The future of the gig economy leverages employment opportunities
A crucial aspect of the gig economy’s growth is the correlation of supply and demand dynamics, streamlined by the advent of online platforms and digital recruitment agencies. These platforms diminish the barriers typically encountered in traditional job markets, facilitating efficient connections between gig workers and employers.
Also Read: Can co-working spaces change Malaysia’s work habits?
The gig economy is reshaping the traditional business hiring model. Employers are increasingly drawn to gig workers for their ability to offer specialised skills not readily available in-house. In a job market increasingly shaped by technological advancements and global connectivity, soft skills have emerged as a critical differentiator for both job seekers and employers. The emphasis on soft skills has never been greater as it is an essential skill that sets candidates apart and contributes significantly to workplace goals.
The Malaysian government themselves are also taking a proactive approach to nurturing the gig economy, exemplified through various initiatives, ranging from building digital skills and improving the regulatory framework to expanding social protection. For example, Malaysia Digital Economy Corporation’s (MDEC) Global Online Workforce is to equip Malaysians with the necessary skills to excel in the digital freelance marketplace.
The gig economy can prove to be the solution to reduce the stagnant unemployment rate that the country has been plagued by. Through various channels such as job portals, digital recruitment agencies, and government initiatives, it is imperative that candidates are provided with upskilling aid by corporate bodies to boost the development of the country’s employment sector.
—
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.
Join our e27 Telegram group, FB community, or like the e27 Facebook page.
Image credit: Canva Pro
The post Skills for the gig age: Empowering workers in Malaysia for the future of work appeared first on e27.