The Malaysian economy saw the highest unemployment rate in three decades when it skyrocketed to 5.3 per cent in 2020; close to 700,000 Malaysians lost their jobs due to the pandemic.

Many businesses were not prepared for this unexpected loss of cash flow as they temporarily shut their doors due to the Movement Control Orders implemented to curb the virus. SMEs across the nation were struggling to secure steady revenue to maintain their staff.

SMEs employ just under 70 per cent of the nation’s employment and represent 98.5 per cent of all business establishments in Malaysia.

Now, this backbone of the economy is experiencing major challenges to continue employing the majority of the Malaysian workforce. Inevitably, SMEs had to downsize with retrenchments, shift staffs’ work scopes and limit the number of customers they could serve.

The problem is that finding and retaining good staff was already a challenge before the pandemic. SMEs found it difficult to hire staff. Once hired, the SME owners would need to ensure sufficient training provided, and ultimately productivity and retention had to be kept up.

Coupled with the backdrop of the pandemic, the survival of SMEs and ultimately the employment of most Malaysians have been put under even more pressure.

Although businesses in Malaysia have been allowed to operate at a certain level of capacity, dine-ins are open to fully vaccinated individuals as of October 2021; SME owners have voiced out their challenges of having to maintain the new operating SOPs while having to manage cash flow to pay for their full-time staff after having months of minimal income.

As the restaurants and retail stores prepare for their operations, the biggest requirement is that their staff be fully vaccinated. The human resources challenges continue.

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The pandemic spurred the growth of gig work platforms

New employment norms have come about over the months of lockdown that are proving to be a real solution for employment in the long run.

The innovation from gig work platforms has empowered SMEs to hire staff on-demand without necessarily incurring the full-time costs, ultimately providing a recovery-friendly solution that doesn’t impose long term contracts and instead allows businesses to scale up operations through bite-sized working shifts gradually.

Businesses can easily post a request for their staffing requirements, and gig workers can be connected to perform the work accordingly.

Now, a florist can run their entire business through online orders from their website, request for an on-demand part-timer florist assistant to pick and pack for the busiest three hours of the day, while also requesting an on-demand dispatcher to pick up the ready-made arrangement to be delivered to the customer’s doorstep.

SMEs in the F&B and retail industry have approximately 50-75 per cent of operations that can be shift based.

Therefore this portion of operations can be easily shifted to the gig economy working model where workers are called on for shifts and trained with a standard operating procedure.

The real benefit of using gig workers is how scalable the workforce is for low season and peak periods. For the first time, the ramping up and down of people can be managed and ultimately save high costs.

Based on a case study of one of GoGet’s merchants, a florist could save up to 70 per cent of their costs in the workforce yet employ a higher number of workers overall.

This scalability is what makes gig platforms a recovery-friendly solution for all SME owners managing cash flow while opening up their operations after months of closure.

The more stable the foundations are to allow SMEs to rebuild their business, the stronger this economy’s backbone will repair.

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The next generation of workforce is ever more ready for the gig economy

Today, 26 per cent of Malaysia’s labour force, equivalent to four million freelancers, form part of the growing gig economy. Based on a study done by Zurich Insurance, 38 per cent of full-time Malaysian employees had already considered venturing into the gig economy, which was higher than the global average of 20 per cent.

To the next generation of the workforce, also known as the tech-savvy Generation Z, the gig economy presents itself as a viable option to earn a living while working flexibly through shifts to maintain a work-life balance.

In terms of businesses, 84 per cent of Asian Pacific hiring managers choose to outsource to freelancers to save costs, cultivate innovation and maintain a competitive advantage.  

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Gig platforms solve the fundamental human resources challenges

Having immediate access to a verified pool of actively looking for flexible engagements boosts the relevant accessibility to talent. SME owners no longer need to scour the internet for part-time forums, groups or reach out to personal networks.

Once a gig worker is engaged, the gig platforms take the initiative on retention and performance. GoGet provides incentives such as job bonuses, as it’s in the interest of the platform to provide a good experience for all.

Aside from bonuses, gig platforms cover the entire ecosystem for the worker to stay protected from insurance, savings and partnerships with national social security.

One of the pioneering initiatives from the Malaysian government was the PENJANAGIG initiative that helps protect gig workers through the Malaysian Social Security Organisation from June 2020 onwards.

Initiatives like this pave the way forward in solidifying gig work to be safe as a long term solution.

Multiple stakeholders have been pivotal in supporting this. Governments need to relook at their social security and pension funds to adjust for the new age of work; business owners are relearning new operational processes that can be gig friendly, and workers adapt to finding opportunities digitally.

There is no doubt that the pandemic accelerated the growth of gig platforms and adoption of gig work, which has many opportunities to support SMEs in today’s recovery journey ahead.

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Francesca Chia is the CEO and Co-Founder of GoGet.

This article was originally published on e27: How gig platforms in Malaysia are empowering thousands of SMEs to recover from the pandemic, published on September 14, 2021

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