Decoding The Gig Economy
The original definition of the word ‘Gig’ was derived from the music industry where musicians would take up jobs which are short-term or for a specific number of performances. Today, the term ‘Gig Economy’ refers to a “free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.”
There are 2 categories or ‘gig economy’ workers— independent worker or contingency worker.
What is an Independent Worker?
The former are typically skilled workers who are freelancers. This includes digital marketers, writers, photographers, designers, programmers and more. They are their own managers and would submit quotes as well as invoices on their own based on the services provided.
What is a Contingency Worker?
A contingency worker would work for other companies just like a regular employee. Hence, they are often deemed as temporary or independent contractors. The main difference is, they do not enjoy the benefits that a permanent employee would. Typical job positions would include telemarketing, customer service, telecollectors and administrative work.
The Difference Between ‘Gig Economy’ Workers, Remote Workers and Contract Workers
While they will all be ultimately working for the same company, there are several differences in these types of employment.
‘Gig Economy’ Workers
Gig workers are a great way for companies to fill employment gaps. These group of workers will enjoy a monthly salary or project-based fees, depending on the arrangements made with the company. However, they will not receive additional benefits such as monthly EPF and SOCSO contributions, medical, insurance and so forth.
Often mistaken for freelancers, remote workers are employees of the company but they would not need to be physically present in the office. However, they are expected to be dedicated to the company and to perform just like any other employee. On the flipside, freelancers will work towards achieving the agreed outcome for a specific job or project.
These are a group of employees retained by a company for an agreed duration. The remuneration package for contract workers is likely to differ from that of a permanent employee. For example, they will not enjoy annual bonuses and if medical or insurance benefits are given, the amount is likely less. They are, however, expected to function like a normal employee which includes being present in the office.
Gone are the days when companies hire only permanent or at most, contract employees. According to the World Bank Data, approximately 26% of the Malaysian workforce are freelancers or opt for flexible work arrangements. These numbers are expected to grow as employees are increasingly seeking flexibility. Hence, it is crucial for companies to identify their own internal needs and to fully embrace the different types of employment opportunities available.