Graduate Unemployment in Malaysia

"The top industry that leads the job market is in the Manufacturing & Logistics sector"

Every year over 200,000 students graduates from institutions of higher learning. Being a university graduate no longer guarantee a job. As the number of graduates climb each year, students are facing tough competition amidst a shaky economy. This article seeks to state the facts why fresh graduates are unemployed in Malaysia, and what can be done to increase employability.

Unemployment issue in Malaysia

Research has it that one of the factors that contribute to the unemployment problem among the Malaysian graduates is the quality of the graduates.

There are employers in the industry, who gave negative comments on the graduates and mentioned that the graduates do not have suitable skills and qualifications to meet the needs of the industry. The graduates are also weak in respect of employability skills and lack of good quality work performance.

A study conducted by Central Bank of Malaysia in 2002 also found that the Malaysian graduates are less skilled as compared to the international graduates. The skills include technical skills, problem-solving skills and communication skills, especially in English language. Research also found that several primary weaknesses of Malaysian graduates are in the areas of management, problem-solving, communication, leadership, creativity, critical thinking, proactive, self-confidence and interaction skills.

These are obstacles for the graduates in finding jobs. It was also stated the several factors also contributed to the unemployment problem among the graduates such as the lack of the interactions between educational institutions and the industry resulting in the lack of training to prepare graduates for the real world.

Industries has also reported that the reason for job vacancies is because of lack of candidates who are qualified for the posts. This is shown from a report by National Associated of Manufactured (NAM), in which it is revealed that there are gaps exists in the range of skills in almost all of the working fields. Consequently, this is the reason that makes a candidate not selected for failing to meet the requirements of the industry.

A study conducted in 2008 found that graduates of Higher Educational Institutions in Malaysia has minimum preparation in facing the challenges posed by globalization and k-economy phenomena. This situation may result in the hiring of foreign workers.

A good academic achievement therefore is no longer a guarantee for our graduates to land a job. Since there is a big gap between the quality levels of the Malaysian graduates with that expected of an international standard, this provides us with a big challenge in order to ensure that our country has skilled, versatile and marketable graduates.

Human capital theory state that human capital that has a high knowledge and skills contribute to the increase of the country’s economic productivity. It also stated that a high investment in producing useful human capitals is important as long as it give high and positive impacts to the economic productivity.

The Current Scenario

Finding shows that unemployment in Malaysia is concentrated among the youth. About 200,000 students graduate annually where one in four fresh graduates remain unemployed six months after graduation. Six out of 10 of those unemployed are below the age of 24.

Among fresh graduates with tertiary education 31.4% degree holders are unemployed, of which 43.4% come from the arts and social science. The Field of studies breakdown are, Arts & Social Science 43.4%, Technical 24.5%, Science 20.2%, ICT 8.1% and Education 3.9%.

The majority of unemployed fresh graduates are from public universities (IPTA) at 51%, 34% from private Universities (IPTS), 13% from Polytechnics, 2% from Community Colleges. Based on Job Street Survey, 64% of employers said they did not care whether graduates were from foreign, private or public universities.

As per JobStreet survey, employers are saying that 68% of fresh graduates were asking for unrealistic salary and benefits, with 30% expecting a starting salary of RM6,500. Top reasons for fresh graduates unemployment are poor attitude or character 59%, poor command of English 64%, and poor communication skills 60%. Employers also felt graduates lacked adaptability, multitasking skills, decision making skills and problem solving skills.

Job postings on JobStreet only fell 1% in 2015.  88% of employers stated that they are maintaining or increasing hiring in 2016.

The top 5 industries leading the job market are manufacturing and logistics, banking & financial services, construction, ICT, and wholesale & retail.

The top three specialisations that is in high demand are sales & marketing, accounting and engineering.

The technology related jobs that are trending are cloud related jobs, mobile developers, SEO/SEM specialists, UI/UX designers and digital/social media marketing specialists.

How to increase employability

·         Improve proficiency in english. The majority of companies conduct their business in english, so it is critical to be proficient. They must practise both written and oral english, surround themselves with the english language and to keep improving and learning. It is a marathon not a sprint.

·         Gain work experience. This allows one to observe how skills, ideas and knowledge are applied in the working world. This can be done by taking up an internship during semester breaks, participate in job shadowing programmes and to take part in extracurricular activities.

·         Develop skill sets to be more well-rounded. Straight A's, 1st class honours or a CGPA of 4.0 does not guarantee employment.Hard skills in computer literacy, numeracy, writing skills and language skills need to be learned and developed. Soft skills such as communication, problem solving, creativity & innovation, time management and teamwork are also crucial.

·         Be responsible. One in three employers stated that candidates often fail to turn up for the interview. One must prepare well for the interview, must be appropriately dressed and most importantly to show up for the interview.

What it meant is that candidates should develop transferable skills, not just specialist skill, to enable them to do other job roles.