Explaining Malaysia’s Booming Gig Economy – A Comprehensive Guide

Explaining Malaysia’s Booming Gig Economy – A Comprehensive Guide

The gig economy is expanding and evolving fast worldwide, and Malaysia has come out as a pace-setter. About four million people in the Malaysian workforce – equivalent to four out of ten people or about 26% of the labour force – work in the gig economy. This is almost double the global average.

What is attracting so many Malaysians to the gig economy, and what does it mean for Malaysia’s national economy? Here is a comprehensive guide to answer your questions.

The Gig Economy in Malaysia

The gig economy in Malaysia is also popularly known as a sharing or on-demand economy. The ‘gigs’ are usually short and relatively simple tasks, albeit they vary in aspects such as required skills and specialities.

Slightly more than a quarter of Malaysia’s workforce works in the gig economy, as mentioned. This includes about 38% of full-time employees, according to a study by Zurich Insurance. Most of these workers comprise young people from ages 25-34 (46.2%) and 35-44 (32.5%).

The gig workers doing these tasks can be fully skilled or semi-skilled, provided that they meet their clients’ expectations. Examples of common gig tasks in Malaysia include:

  • Animator
  • Application Developer
  • Website Developer
  • Travel Consultant
  • Dispatch & Delivery
  • Online Salespeople
  • Driving
  • Translator
  • Teaching & Tutoring
  • Creatives (Magicians, Performers, etc)
  • Insurance Agents
  • Forex Brokers
  • Call Center Agents

Indeed, the scope of Malaysia’s gig economy is vast and encompasses many industries and professions. The underlying factor that makes these tasks ‘gigs’ is that the people doing them operate on a freelance basis.

Factors Driving Malaysia's Gig Economy

Factors Driving Malaysia's Gig Economy

The gig economy is not a new concept in Malaysia. However, Malaysia’s gig workforce has been expanding quickly over the recent years, especially since the start of the COVID-19 pandemic. The following factors can explain the gig economy’s accelerated growth rate:

The COVID-19 Pandemic

Malaysia is struggling with a record-high unemployment rate following the COVID-19 pandemic’s devastating effects on its economy. The shutdowns and restrictions induced by the pandemic have strained many businesses’ revenue streams.

Consequently, most businesses have responded by reducing working hours, cutting wages, and even laying off some workers temporarily or permanently. Hundreds of thousands of Malaysians have lost their jobs during the COVID-19 pandemic, and about 773,000 people are currently unemployed. Approximately eight out of ten of these workers are actively looking for a job. Unsurprisingly, many are turning to the gig economy as a temporary or permanent solution.

The gig economy is a popular choice among many unemployed Malaysians because of the relatively low barriers to entry. Additionally, incomes from these tasks help sustain many people in the B40 income group – the income can range from meagre to lucrative, depending on the type of work.

Better Work-Life Balance

Better Work-Life Balance

Most gigs are short and simple tasks, and gig contracts between clients and freelancers don’t last long. Consequently, the gig worker is free to spend their time as they wish once they are done. Options include going back to the job listing board or taking some time off to address your personal needs. Essentially, gig workers can schedule their own time to determine how much they work.

The flexibility of working in the gig economy is enabling more Malaysian workers to maintain a healthy work-life balance. It is one of the main reasons why many people are flocking to the gig economy. Healthy work-life balance is especially popular with parents (especially mothers) and workers in the younger generation.

Government Input

The Malaysian government cannot ignore the gig economy’s size and importance to its citizens – and neither can its contribution to the GDP. To this end, the Malaysian government has acknowledged the sector’s importance and announced plans to stimulate its growth.

“In an effort to encourage freelancing, the Malaysia Digital Economy Corporation will be proved with RM25 million for the Global Online Workforce program,” said Prime Minister Tan Sri Muhyiddin Yassin when presenting the National Economic Recovery Plan. The plan also allocated RM75 million to help stimulate the gig economy in other ways.

Notably, the government is acknowledging the importance of making a decent living wage off the gig economy. Unfortunately, millions of people in Malaysia don’t have enough savings to last them three months. The government hopes to help gig workers save more by announcing RM50 million matching grants for gig (job sharing) platforms that encourage their workers to contribute to the Social Security Organization (SOCSO) and the Employees Provident Fund (EPF).

Internet Penetration

Malaysia has one of the highest internet penetration rates in the world, standing at about 84.2% in January 2021. This means that approximately 27.43 Malaysians (out of a total population of about 32.57 million people) have reliable access to the internet.

The internet penetration rate in Malaysia is rising quickly. It grew by about 2.8% between 2020 and 2021, increasing the number of people with reliable access to the internet by about 738,000. Assuming that this growth rate remains constant, everyone in Malaysia will have reliable access to the internet in about eight years.

The gig economy mostly runs almost entirely on the internet via job listing sites. Gig workers sign up on sites such as Upwork where they are matched to potential clients looking for workers with their skillsets. Consequently, the high internet penetration rate has helped open up the gig economy to more Malaysians, especially the younger and more tech-savvy generation.

A Promising Future!

Fortunately, more Malaysian workers will soon have reliable access to the gig economy as Allo continues building its internet connectivity infrastructure throughout the country. Allo is one of the leading ICT service providers in the country, and its ability to leverage of TNB’s assets has afforded it enough resources to boost internet connectivity countrywide.

The gig economy in Malaysia is expected to register impressive growth over the foreseeable future. Allo will be there every step of the way, laying down the necessary internet infrastructure to give everyone reliable connectivity to do what needs to be done. Get in touch to learn more about our services and how we can help.