The Freelancer Economy: Malaysia Future Workforce02 Jul, 2019
Would freelancers become the future workforce in Malaysia? - Are you just like any other employee in the workforce? Months and years of working in the same job with its rigid timeframe. Why not try freelancing? Here are a few statistics showing how much freelancing is growing to be a huge part in the global economy.
36% of the US workers (57.3 million) are freelancers who work from home. They collectively contribute $1.4 trillion to the economy every year. It’s a 30% increase since 2016. 63% of freelancers in the US choose a work-from-home career over traditional jobs. - Upwork
77% of freelancers state that they are now financially stable since ditching their day jobs to go freelance. - Slash Workers
In 2016, Freelancer.com received a total of 10.6 million job postings from clients with a total of $3 billion in paid transactions.- Freelancer.com Annual Report
While the majority of employees still work in full-time positions in Malaysia, freelancing has increasingly become quite a large contribution in the Malaysian economy. A third of Malaysia’s workforce is involved in freelancing! The Employees Provident Fund (EPF) reported in August 2017 that the Malaysian freelancing economy has grown by 31% which makes Malaysia the third largest freelancing market in the region, as reported by Freelancer.com.
Today, freelancing or gigging or contract works are no longer new concepts in the workforce. INTI International University and Colleges commissioned its first-ever survey on 300 full-time freelancers and it was found that 68% of the respondents chose freelancing as their first career choice. The main reasons for choosing freelance are having control over working hours, getting diverse work experience and flexibility to choose jobs or projects.
The BIG question is: Would freelancers become the future workforce in Malaysia?
In the United States, it is expected that 43% of the workforce will be freelancers by 2020 (Nasdaq). The majority of US workforce will be freelancers by 2027 as reported by UpWork/Freeancers Union. Malaysia, as a developing country is set to be following the trend. More and more young workers will start to opt for freelancing full-time or even part-time to supplement the existing job.
We will explore from three main aspects in this blog:
- The downsides of freelancing
What’s in it for employers?
“Smaller space; lesser rents!”
Take for example; Japanese fintech group Finatext Ltd, a data analytics company that set up their branch in Malaysia, keeps an extremely lean workforce. It only has three full-time staff and the rest of the work in the company is done by freelancers. Freelancers can work remotely from home and the company only needs a small office space. This is echoed from many western companies.
“Pay ONLY when you need it”
A company may have its ups and downs, and when it comes to lesser workloads, employers still need to pay a substantial amount of salary to all permanent employees while having lesser output. By utilising freelancing, employers only pay when they need to get the job done. This means better cost-efficiency for the business when you pay for the amount of work needed.
On a side note, employers can also save 20-30% annually with freelancers when you do not have to pay for employees benefits such as compensation fees, health insurance, retirement, social security schemes (SOCSO) and employees provident fund (EPF).
“Choose the BEST”
"If you are not willing to risk the usual, you will have to settle for the ordinary." - Jim Rohn
“Settle for the ordinary” when you pass a web development job to an employee in your company or “risk the usual” when you find a professional web developer on freelance platforms such as Favser. Businesses can look out for freelancers having the right talents in mind to produce the best quality of work. In the same way, freelancers will do their best to submit their best work at the appointed time to maintain a good relationship with the hiring company. Employers can browse through feedbacks on freelance platforms and freelancers’ profile to obtain the right person for the job.
One can even hire freelancers from global platforms to ensure that you can get fresh faces and innovative work from global freelancers. Hiring global freelancers also allows a business to expand into international markets.
As aforementioned, a freelancer will do his/her best to produce quality work when hired to maintain a good working relationship. Employers can set a certain due date for the work and by hook or by crook, freelancers will have to produce them. In that way, a certain job can be done in the least amount of time needed as compared to having a stable employee who needs to juggle other office work and the said job.
Benefits for the freelancers
Hear ye, hear ye! Yes, the younger generation of employees are definitely not sticking to the point of ‘work your way up in a stable job’ then earning enough to buy a house, get a car, have a family etc. With rising costs of living, a standard full-time 9-5 job does not guarantee the necessities in life. Hence, many more of younger employees are opting for the flexibility of freelance gigs to earn good cash and have a life. Freelancing works in a way that one only works when people hire you through freelance platforms or bid your way to a project. Working hours are flexible as long as you deliver the job on time.
“Freedom and work efficiency”
There’s nothing like the fresh air of freedom! Instead of being tied down from morn till evening, or being asked to work during weekends, freelancing offers one the freedom to work from the ‘what’ to the ‘where’ and to the ‘when’.
‘What’ – choose your preferred expertise. One could be a lawyer by profession but freelance as a professional photographer. Freelancing is about choosing something that you love and have passion in it.
‘Where’ – work wherever you are, wherever you like. Be it at cafes with the bursting aroma of coffee beans, or the smell of books in the library, a working space does not confine to a desk and a chair with a laptop. Find something that suits you to ensure you’re focussed all the time.
‘When’ – complete your job at any time of the day (or night!). Some people work efficiently in the day, some in the wee hours. Have your own freedom in choosing when to complete your gigs and work at your own pace.
“Health is wealth”
Stress is a major contributor to many chronic health diseases and more often than we think, stress comes from work. The working environment in modern society may not be as conducive to most people as employers will push for efficiency and perfectionism. Kicking out a stressful working environment and replacing it with carefree freelance jobs can utterly change one’s lifestyle as you can find time to hit the gym or play some sport. Exercising relieves stress, promotes blood circulation, and free clutter of one’s mind. When you add exercise and better working environments together, both attribute to greater health and the ability to work better.
“Keep your own profits!”
There’s nothing more like it when you get to keep your own profits when a job is completed. Unlike the conventional full-time job, where you work through the month to get a specific sum paid, you can keep the full amount negotiated for the freelance work you’ve come up with. No more of pay reductions to EPF and SOCSO which often amounts to about 12% of the salary. Also, get the funds directly transferred to your bank account. When working on your own, it is ever so fulfilling that you can keep everything to yourself as your hard work pays off.
“Be your own BOSS”
There are many types of freelancers. Some moonlighters may freelance to earn extra cash to supplement their existing job. If you’re considering to work full-time as a freelancer, it is really convincing to tell that you can pick up freelance gigs and be your own boss. Venture out into the unknown, and build your own business through freelancing. You can manage yourself from the minute to the major aspects. As Walt Disney quoted, "If you can dream it, you can do it." which lead to the successful Walt Disney Studios where it is today. Walt Disney started off small; we all can too via freelancing.
Some cons of freelancing..
To business owners, this could potentially be detrimental. Freelancers can take up multiple jobs at the same time and their focus would be dispersed. To ensure that employers can get the best out of a freelancer, be sure to ask of their schedule and work around it. In that way, your hired man is bound to produce the best quality of work and you are a satisfied customer.
“Can I TRAIN and SUPERVISE my staff?”
If employers are opting for people to work hands-on, such as part-time promoters, it is rather difficult to ensure that the hired freelancer is trained up to your standards. The best way would be to assess the individual based on experience to look out for the right person with the relevant experience, or, provide training at a designated time and place to the freelancer.
READ MORE: 6 MOST IN-DEMAND FREELANCE SKILLS IN MALAYSIA
The freelancing system works like this – you get a project, you get paid for it. However, it does not guarantee that jobs are always readily available or that constantly there will be employers trying to hire you. One has to accept the fact that until a strong clientele and freelancer reputation is built, there is no guarantee of a consistent income. Building your reputation from nothing takes time and success is not gained overnight.
“Lack of employee benefits”
One major reality freelancers have to face is that there is basically zero employee benefits when it comes to freelancing. As reported by The Star (30 Oct 2017), freelancers do not get to enjoy fixed monthly income as well as the entitlement to company-sponsored retirement savings or social security coverage as compared to full-time employees. What is worrying is that 66% of freelancers said they did not have a retirement plan; 33% did not have a personal savings plan, while 56% had less than three months of savings. Employee benefits such as EPF and SOCSO are crucial in a person’s retirement plans, but as of now, freelancers just have to deal with it.
“Leverage against employers”
Even though there are more and more freelancers in the market, there are practically no specific laws that deal with freelancing. There is also not a single social protection system that cleanly responds to all freelancers. Some freelancers also get cheated out of their payment after completing the job where employers just ‘disappear’. Simply to say, it is quite a risk to dive yourself totally as a full-time freelancer.
To answer the BIG question – would freelancers become the future workforce in Malaysia?
Based on statistics, it is a huge YES. If freelancers are representing one-third of the Malaysian workforce, it is of no doubt that Malaysians are following the footsteps of the global economy. Though it may be of quite some risk to join the freelance community full-time, some may still feel that the benefits definitely outweigh the risks. One should never take lightly on financial literacy and be adequately prepared and educated on different financial plans. Nonetheless, it is a lucrative opportunity not to miss, so head on to to join us now!
“What the mind of man can conceive and believe, it can achieve.” – Napoleon Hill