Greater collab needed to enhance skills, address challenges in labour market
On top of policy reforms, analysts highlight the need for greater collaborations between government, the industry and educational institutions to ensure education and training programmes are aligned with the evolving skill requirements and challenges of the labour market.
In its response to Bank Negara Malaysia’s (BNM) review of Malaysia’s labour market in its 2023 Economic & Monetary Review, the research arm at Kenanga Investment Bank Bhd (Kenanga Research) said it is in sync with BNM regarding the necessity of implementing labour market reforms.
It pointed out that these reforms are necessary to mitigate the impacts of structural issues and the ongoing trends that could impede the establishment of future-ready workforce.
“As for the reforms proposed, we would like to include the need to form and enhance a collaborative relationship between the government, the industry and educational institutions.
“This collaboration is essential to ensure that education and training programs are aligned with the evolving skill requirements of industries, as outlined in the 257,052 job vacancies posted (as of February 2024) on MYFutureJobs,” it said.
Notably, it said, semi and low-skilled positions currently dominate the vacancies, accounting for a 64.5 per cent total share, while BNM report that overall employment remains primarily concentrated in semiskilled segments, with more than 70.0 per cent of the jobs in the agriculture, construction and manufacturing sectors are in the semi-skilled category.
Aside from that, it noted that to create more high-skilled jobs, technological improvements and adoption are needed, especially among SME’s.
Additionally, the adoption of advanced technology can drive productivity growth, making firms more attractive to investors.
“Redesigning immigration policies is necessary to reduce the country’s dependency on foreign workers, especially for low-wage and low-skill jobs, ensuring alignment with development needs.
“Meanwhile, attracting highskilled foreign talents for highskilled jobs is advisable to foster knowledge transfer, especially to local workers,” it said.
Adjusting the minimum wage of graduates according to their skill level would also ensure that workers are fairly compensated for their labour.
Lastly, for social protection aspects, flexibility in the labour market, especially in work arrangement and gig work needs to be introduced, especially in the informal sectors. Social protection plans like EPF and SOCSO can pave the way for greater penetration of social insurance.
Overall, Kenanga Research maintained its 2024 unemployment rate forecast at 3.2 per cent versus 3.3 per cent by the BNM.