This article first appeared in Digital Edge, The Edge Malaysia Weekly on May 27, 2024 - June 2, 2024

Freelancing has long been associated with creative and technological skills and is often perceived as being low value or low skill. However, the market is undergoing a significant shift, particularly in Southeast Asia, and is becoming the fastest growing segment in the gig economy for highly skilled professionals.

The industry is now seeing professionals from across the value chain gravitating towards the independent sector. Anurag Bhalla, co-founder and managing director for Southeast Asia at Outsized, says this is being driven by a change in how people view their relationship with their employer and the evolving nature of how organisations are choosing to build capabilities, moving from fixed capability and fixed-cost models to flexible capability and variable-cost models.

“Individuals are now seeking greater control over their careers, building their brand equity and professional identities as well as shifting from being defined by their employer to being defined by their skills. And they realise that the perceived job security of a permanent job cannot be relied upon,” he says.

“People are looking to build portfolio-based careers focused on the accumulation of knowledge, skills and experience, as opposed to years of service and job titles. Individuals realise they need to create security through upskilling, as opposed to it being provided to them by the nature of their employment contract.”

Outsized has seen independent talent registration growth of 85% in Southeast Asia alone on its platform over the past year. Highly sought-after talents include project managers, strategy consultants, marketers and digital product owners, as well as those with digital-related skills such as data scientists, technology architects and transformation experts.

Independent talents in Southeast Asia command day rates of US$600 (RM2,822) on average, driven by variables such as types of skills and the demand for those skills, as well as levels of experience, relevant projects previously carried out and the duration of the engagement.

The nature of the role, scope of work and interest level of the individual in question, as well as client brand value and reputation regarding the treatment of independent talents also matter, says Anurag.

“Those with proven hands-on experience in real-world execution with 10 to 20 years of experience who can operate as practitioners as well as communicate effectively with senior-level stakeholders are some of the most sought-after individuals in the region, especially those who can bridge the gap between business and technology,” he adds.

Companies announcing the end of working from home or hybrid work arrangements have been in the news lately, but Anurag says the post-pandemic myth that people don’t want to work on site is not what the company observes. In fact, independent talents are happy to travel and be on site for project-based work.

“The lifestyle of an independent means that individuals can work anywhere and live anywhere, that they are not tied to a fixed location given that they move from engagement to engagement. Independents are highly flexible and will travel where the interesting work is and enjoy the experience of being in new markets or cultures and meeting and working with new people,” he says.

Instead, what has been witnessed is the inevitable use of hybrid models, for example, three days on site and two days remote, or purely remote for projects of shorter duration and where the project team is spread across markets, as opposed to working in a single hub.

For longer-term, execution-focused projects, organisations tend to prefer the on-site working model, says Anurag. However, they are now open to engaging talents from across borders, where previously they would have limited their reach to the local talent pool.

“Flexibility for talent comes from being able to choose who you work for, the rate you charge, the type of work you do and where you work. This is what they value. It isn’t that they want to sit on a beach and work from a sun lounger, as a lot of imagery we see in the market crudely and lazily suggests,” he says.

Being a diverse region, there is often a need for proficiency in the local language in addition to the skills and expertise required for the engagement. Anurag says this can often restrict the volume of opportunities individuals can apply for despite having relevant experience.

“We still see the majority of roles being purely English-speaking, and there is an increasing number of independents becoming multilingual and pursuing new language skills development in between projects,” he adds.

As the independent sector in Asia and Africa is less established than markets such as the UK, the US and Europe, there is still a lack of established rate benchmarks available to independent talents. This can lead to challenges in pricing, variations in client budgets and the need to negotiate, says Anurag.

Outsized is trying to address this. Through its Talent-on-Demand report and the thousands of data points that have been collected over the last eight years, the company is compiling unique insights and analysis on rates that are used to support both sides in aligning on fair and consistent pricing.

When it comes to tax and compliance, Anurag says each market has its own tax and regulatory environment, so independents often struggle to know where they stand. Many worry about how to ensure they remain compliant and find it difficult to get simple and trusted information.

“Given that we operate across the region, we’re able to provide reliable and up-to-date resources and information, as well as support independents to set up their entities and file taxes correctly. In addition to this, rights to work can also become a complex barrier as some markets offer easy access to business and freelancer visas, for example, in Malaysia, Vietnam and the Philippines,” he adds.

“Others, like Thailand, Hong Kong and Singapore, are tougher markets in which to attain the legal right to work. Through our ecosystem of local partners, we can support independents to gain the necessary visas and permits quickly, opening up previously inaccessible work opportunities.”

To enhance the viability of freelance jobs in Malaysia and stimulate their contribution to the local economy, the government could implement several policy measures, the first being a continued commitment to freelancer-friendly visas.

The recently introduced digital nomad visa, DE Rantau Nomad Pass by Malaysia Digital Economy Corporation, is a great initiative, says Anurag. The industry has already seen first-hand how this has stimulated the Malaysian freelance market by attracting top talent from across the region and around the globe. “It also encourages collaboration and knowledge exchange, enriching the local talent ecosystem,” he adds.

There is also a need for taxation reforms for freelancers. Anurag says by developing more concrete tax regulations and tools specifically designed for freelancers, it could simplify tax filing processes, provide clearer guidelines on deductible expenses and offer taxable claims unique to freelancers.

“By easing the tax burden and providing financial incentives, freelancers would find it easier to operate and reduce the time and effort they currently need to allocate to remain compliant,” he adds.

Ultimately, the rights of freelancers need to be upheld by establishing a supportive regulatory environment for them, ensuring fair treatment and protection of their rights. Anurag says this could involve setting up mechanisms for dispute resolution, minimum payment terms, creating platforms for them to access legal advice and establishing freelancer-friendly labour laws.

“By enhancing job security and providing avenues for recourse, freelancers would feel more confident in pursuing their careers, leading to greater economic productivity,” he points out.

Finally, easier access to financial services and protection solutions will help freelancers. Anurag says the world was built for permanent employees, so freelancers continue to find it difficult to find credit, cash flow and retirement and protection solutions, despite often earning more than when they were in permanent employment.

“Freelancers lose the support infrastructure provided by employers and so platforms like Outsized need to work closely with other market players to build the necessary services and solutions to help make the career of an independent talent aspirational, achievable and rewarding,” he says.

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