Introduction
In light of salary stagnation and increased income instability, businesses offering gig work has boosted employment opportunities, especially for those striving for greater freedom and flexibility (Gleim, Catherine, Johnson, Stephanie & Lawson, 2019). Additionally, technological advancements have also led to the development of new business practices (Liu, He, Jiang, Ji & Zhai, 2020).
The most recent technological revolution that is restructuring and redefining the economic and labour landscape is digital platforms. These platforms offer a variety of services that are highly dependent on an ever-expanding labour pool to fulfil on-demand requests (Liang et al., 2022). In other words, the world of work is benefitting from new employment and career creation prospects through the gig economy (Parasuraman, 2022). The gig economy encourages entrepreneurship by promising employees that a flexible programme, self-directed work environment, and unlimited income are available at their fingertips via online applications (Ravenelle, 2019).
This article aims to discuss the current gig economy trend from the global and Malaysian perspectives. This will enable us to understand employee and employer expectations and how this can lead to a new employment ecosystem in Malaysia.
Gig Economy in General
According to Roy and Shrivastava (2020), mass internet and smartphone penetration have connected users worldwide to digital platforms. This has aided enterprises in conveying their talent needs and engaging remote online employees (Healy et al.,2017). Such developments have led to a boom in the gig economy.
Gig economy is also referred to as the sharing economy, peer-to-peer economy, collaborative consumption, on-demand economy, and platform economy (Vallas & Schor, 2020; Sutherland & Jarrahi, 2018; Sundararajan, 2016).
This is because, it features an economic system of intermediary businesses that links on-demand employees or service providers with clients through internet-based technology or applications (Meijerink & Keegan, 2019; Cheng, 2016; Sundararajan, 2016).
It is also considered a free-market approach where there is a contract between firms and independent employees for a short-term project or service employment (Techtarget, 2020). In contrast to conventional employees who are covered by pertinent employment laws such as minimum wage, sick leave and taxation rules, platform gig workers are functionally self-employed and accountable for their own financial management and career development (Farrell & Greig, 2017; Graham, Hjorth & Lehdonvirta, 2017; Spreitzer et al., 2017; Codagnone, Abadie, & Biagi, 2016).
The table below displays the characteristics of the gig economy which strongly differs from traditional employment.
Table 1.0: Attributes of the Gig Economy
| Attributes of the Gig Economy | Justifications |
| Work without restriction/boundaries | – Working anytime and anywhere |
| Flexibility | – Working independently on a person’s own time |
| Freedom to choose projects/tasks/jobs | – Able to select projects and clients based on their personal preferences. |
| Possibility of having more income/earnings | – Able to increase their earning by creating an income structure that comes from several sources depending on the industry and skill sets. |
Source: Mar, 2022
Introduction to Gig Economy from the Global Perspective
Globally, the gig economy has emerged as a primary model in the contemporary employment era (Taylor et al., 2017), leading to a generation of independent employees, typically referred to as gig workers or freelancers (Roy & Shrivastava, 2020). Furthermore, the gig economy became a preferred employment pathway in 2008–2009 when the economic crisis urged many individuals to switch to task-based employment (Zgola, 2021).
For instance, in the United States, the gig economy rose at three times the rate of traditional employment, while nearly 40% of the workforce is employed in some gig jobs as well (Larry, 2021). In addition, in 2021, approximately 15% of employees in England and Wales performed a gig at least once a week (Velocity Global, 2022 – https://velocityglobal.com/blog/gig-economy-statistics/ ).
Beyond that, from 2016 to 2021, the number of employees who performed remote online tasks in the United Kingdom doubled. Likewise, according to India’s Booming Gig and Platform Economy Report (2022), 7.7 million workers in India were engaged in the gig economy in 2020 and 2021 (https://www.niti.gov.in/sites/default/files/2022-06/Policy_Brief_India%27s_Booming_Gig_and_Platform_Economy_27062022.pdf ).
Furthermore, South Korea also reported 2.2 million gig workers, representing 8.5% of the nation’s total employment (Statista, 2022 – https://www.statista.com/statistics/1334014/south-korea-number-of-gig-workers-by-type/ ).
Moreover, some classified the gig economy into two (2) different categories known as local gig work (e.g., delivery, transportation, physical labour and courier services) and remote gig work (online tasks), which enables individual to offer digital services through various global platforms such as Amazon Mechanical Turk (MTurk), Fiverr, Freelancer.com and Upwork. (Wood et al., 2019; Lehdonvirta, 2018).
From a global perspective, the gig economy has gained more attention in recent years (Duggan et al., 2019; Aloisi, 2015; Harris & Kreuger, 2015). Therefore, in most nations, gig economy is reducing the number of permanent jobs in the workplace and attracting more individuals due to its flexibility, less control, and less supervision (Parasuraman, 2022).
Introduction to Gig Economy from the Malaysian Perspective
As stated previously, the gig economy and freelance jobs have reshaped the global employment structure over the past decade, and Malaysia is no exception (Pang, 2022). The growth in demand for greater flexibility and transformation in work practices has resulted in the emergence of the gig economy (Harun, Ali & Khan, 2020). In general, gig employees operate independently, with direct rivals, across broad geographic ranges and in isolation (International Labour Organization, 2019). This sector further encourages individuals to join by offering complementary income, greater flexibility, skill development opportunities, and better career prospects (ILO, 2021).
Furthermore, between February and August 2020, a study undertaken by the United Nations Capital Development Fund (UNCDF) among Malaysian gig employees, revealed that flexible working hours and having an additional income source were their primary reasons for participating in the gig economy (Yatim, 2021; The Edge Markets, 2021).
According to Lim (2021), the gig economy contains three (3) primary components, which are highlighted in the below table:
Table 2.0: Primary Component of the Gig Economy
| No. | Primary Component of the Gig Economy |
| 1 | Freelancers are compensated based on the completion of a particular task. |
| 2 | Customers/consumers request certain services. |
| 3 | Companies use online digital platforms (e.g., Lala Move, Food Panda, Grab, Airasia, Grab Food) to connect gig workers to available jobs/tasks. |
Source: Lim, 2021
Figure 1.0: Examples of Digital Platforms in Malaysia
Source: Google Image
Additionally, nearly four (4) million freelancers, equivalent to over 26% of the workforce, are a part of the gig economy in Malaysia (Ignatius, 2022; Pang, 2022; Azahar, 2020; DOSM, 2020). Notably, the findings of a survey undertaken by Zurich Insurance Group and the Smith School of Enterprise and the Environment at the University of Oxford in 2020 indicated that 38% of Malaysians who are employed as full-timers are contemplating joining the gig economy in the upcoming year.
The sector provides excellent opportunities for unemployed individuals due to its relatively low barriers to entry. This is important as it offers income generation opportunities that can support and sustain members of the B40. Additionally, the 12th Malaysia Plan (2021-2025) has included provisions for the gig economy, with the government taking the necessary actions to regulate the sector and protect employee and employer interests (Pang, 2022). As a result, the gig economy is expected to contribute to the nation’s inclusive and sustainable economic development (Pang, 2022; Yusof, Harun & Yunus, 2019; New Straits Times, 2019).
Actions Taken by the Malaysian Government Regarding the Gig Economy
The Malaysia Digital Economy Corporation (MDEC) has urged the government to put more emphasis on creating a framework for the gig economy in Budget 2023 in order to aid gig workers in acquiring the right advice and guidance (Bernama, 2022; Imran & Faud, 2022).
Beyond that, the Malaysian government has put more effort into boosting upskilling, urging more gig workers to benefit from the incentives provided. For instance, the Human Resource Development Corporation (HRD Corp), supports training on various platforms, namely Coursera and edX, through the GigUp programme outlined in the Digital Economy Blueprint.
It is admirable that the Malaysian government is taking the necessary initiatives to protect the welfare of gig workers. This is evidenced by the establishment of the myGIG Programme to support individual participation, especially youths by offering training and equipment (The Edge Malaysia, 2021; Yatim, 2021).
Benefits of the Gig Economy to Employees and Businesses
Thanks to digitalisation, the gig economy enables employees to switch from conventional and scheduled jobs to task-based work (Zavyiboroda, 2022). The author further continued that these tasks/projects may vary in terms of length and intricacy. However, workers can benefit as they are able to choose the tasks by relying on their expertise, knowledge, experience, skills and qualification levels. This can prevent burnout, high turnover rates and the lack of participation (Zavyiboroda, 2022).
Similarly, the gig economy places employers in an advantageous position as it enables businesses to save more time and costs as they are not recruiting individuals with the privileges of fixed-term employment (e.g., paid vacations), resulting in the recruitment of the most eligible person available for short-term jobs (Gonçalves, 2019).
Furthermore, the creation of digital platforms and applications have resulted in the easiness of finding jobs. Henceforth, businesses benefit from flexibility as they can maintain their primary operations while engaging external expertise as required. This allows them to be more agile and able better manage any market uncertainties.
Table 3.0: Benefits of the Gig Economy for Businesses
| No. | Benefits of the Gig Economy for Businesses |
| 1 | – Access to a massive and global talent pool |
| 2 | – Agile workforce |
| 3 | – Better customer service |
| 4 | – Increase brand awareness |
| 5 | – Reduction in costs |
| 6 | – Enhance opportunities for surviving recession or crisis |
Source: Lavri, 2022; Attendance Bot Blog, 2021
Conclusion
No doubt, the pros and cons of the gig economy is still highly debated. However, participation in the gig economy has continued to rise, especially following the COVID-19 outbreak. The pandemic also sped up services which utilise gig workers, as people opted for online services to minimise physical contact (Pang, 2022). In May 2020, at the height of the pandemic, Malaysia’s unemployment rate rose to 5.3%, and the number of unemployed individuals increased to 826,100 (Shankar, 2020; DOSM, 2020; The Edge Markets, 2020).
Businesses responded to unpredictable changes during the pandemic by reducing working hours, cutting salaries, and temporarily or permanently laying off some of their employees. Furthermore, minimum wage was insufficient to cover most expenses due to Malaysia’s high cost of living (Parasuraman, 2022). Therefore, the gig economy helped provided more Malaysians with additional income generating opportunities due to its portative, agile, adjustable and cost-effective type of work (Jonatha, 2020).
Notably, employees may react cautiously to gig-based jobs as they may have reservations about being treated differently from full-time workers. Thus, forming equal working conditions, providing rewards and bonuses, and offering different packages of social benefits can be some of the solutions to solve the lack of employee support for gig work (Zavyiboroda, 2022). From the Malaysian perspective, the gig economy’s stakeholders, particularly p-hailing services, are looking forward to the Budget 2023 tabling, desiring more government protection to boost the industry as well as their interest and well-being (Star News, 2022).
The gig economy also enables internal part-timers to acquire new skills and access high-profile jobs (Zavyiboroda, 2022). Hence, the appropriate enactment of the right gig economy policies is vital. This will enable the inclusive involvement of more individuals in the digital economy.
** The author would like to say thanks to Ms Nazanin Dara, a PhD Student from University of Cyberjaya who assisted me in this research project.
Professor Dr. Balakrishnan Parasuraman is a Professor of Management/HR/Industrial Relations at the Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan (UMK) based in Kota Bahru, Kelantan. He is a member of the International Honor Societies of the International Employment and Labor Relations Associations (IIRA) based in Geneva, Switzerland, Malaysian Institute of HRM, and International Employment Relations Association, Sydney, Australia.
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