Job cuts will force more into freelance work, says business group

Delivery riders are among those whose numbers have grown during the MCO.

PETALING JAYA: The Malaysian Employers Federation foresees a dramatic rise in the number of people becoming self-employed in online or part-time freelance work because of the Covid-19 crisis.

Shamsuddin Bardan, executive director of the Malaysian Employers Federation, said most employers were considering a reduction of their workforce as the pandemic has caused the economy to shrink.

“While many sectors of the economy are reeling under pressure, the gig economy is actually bucking the trend by registering growth and is expected to continue even after restrictions under the movement control order are lifted.

“Currently, there are about 400,000 self-employed and due to the difficulties of employment, the number is expected to grow up to 2.8 million this year,” Shamsuddin told FMT.

A recent survey by the SME Association of Malaysia found that 23% of SMEs would downsize their businesses while 28% said they would restructure, with only 19% believing they would be able to resume operations as usual.

According to AmBank Research, as retrenchment exercises begin to pick up the pace, Malaysia’s unemployment rate could rise from 3.3% to between 3.4% and 3.6% this year.

The rising unemployment rate is likely to push people into the gig economy, which includes the e-hailing sector, with companies such as Grab and MyCar. Other popular gig platforms include Lazada, Carousell, Airbnb, Kaodim and Foodpanda.

Shamsuddin also said many industry players switched to digitalisation as a means to survive, grow and to tackle the economic crisis.

“We had seen how farmers switched to e-commerce to sell their vegetables after suffering losses during the initial period of MCO as their products couldn’t be delivered to the markets.

“The high demand for technology has contributed to the creation of job opportunities in the gig economy,” he said.

He said that with the rise of demand in technology, certain academic qualifications may not be relevant in the near future.

“It is difficult for those with general academic qualifications to be employed. The employability rate was already below 50% before the Covid-19 crisis,” he said. - FMT