Youth empowerment for a better M’sia

LAST month, our country celebrated its 61st Independence Day under a new administration.

The change of government after the 14th General Election was largely due to the high voter turnout of youngsters who formed some 40% of total registered voters who became the voice of Malaysia in highlighting major issues such as high cost of living arising from GST, high unemployment and low income.

Therefore, it is imperative to address concerns on youth well-being, given the negative effects it has on youth development. In fact, an area of great concern is the rising rate of unemployment among youths, in particular graduate unemployment.

Statistically, Malaysia’s total unemployment rate has remained steady since 2000. However, the youth unemployment rate has been creeping higher: from 9.9% in 2014, it has now reached a record high of 10.8% in 2017.

Delving deeper into this, there is a pressing concern on the sharp rise in graduate unemployment, with 9.6% or around 204,000 graduates being unemployed in 2017. When compared to 2012, the figure was lower at 8.8% or around 163,000 graduates.

With globalisation, followed by urbanisation and more recently, digitalisation, Malaysia may have to step up its efforts to move up the value chain towards a more knowledge-based driven workforce by increasing the share of high-skilled jobs in tandem with efforts to transform Malaysia into a high income and developed nation within the next few years.

The high number of graduate unemployment in Malaysia is a complex issue and requires a collaborative effort from all social groups to overcome.

Tracking the progress of graduates from 2007 to 2015, a study conducted by the Minister of Education gave much-needed insight into possible causes of high graduate unemployment. The data showed different findings contrary to mainstream perception that graduates usually demand high wages, with an estimated 80% of graduates expecting salaries of less than RM3,000.

The study also concluded that graduates were active job seekers who are aware of their skill gaps, particularly in communication skills, and showed interest to improve by attending relevant courses.

In addition, the study showed graduate unemployment are mainly influenced by three main factors - socio-economic background of families, economic development in certain states, and social standing of the graduates.

It was noted that families earning below the national household median income recorded the highest numbers of graduate unemployment. The findings also indicated that social connections play an integral part in assisting graduates in securing a job.

The lack of opportunities within low-income regions encouraged the migration of graduates to higher-income centres, in search of better job prospects. In doing so, they face another discouraging obstacle where they are required to adapt to a whole new environment, while at the same time competing with other graduates who are already in the midst of seeking jobs within the centres.

These three main factors show that there is an obvious discrepancy of opportunities between the higher-income states and lower-income states, which puts Malaysia at risk of significant socio-economic problems if this problem continues to persist.

Socio-economic mobility plays an important role in promoting economic growth and reducing income inequalities. That said, a key driver towards achieving high socio-economic mobility is to be able to successfully develop human capital primarily through the provision of quality and relevant education.

According to a research conducted by Khazanah Nasional Berhad, it is encouraging to find that around 62% of Malaysian children attain better education than their parents. Furthermore, there is satisfactory education mobility in terms of tertiary education of those born to parents without formal education, especially within the Chinese and bumiputra groups.

However, the rapid expansion of both private and public institutions of higher learn- ing are producing mass numbers of graduates without the required working skillsets. For employers, the mismatch of skills in graduates coupled by the unaccommodating structure of labour market contributes to the challenge to hire more recent graduates.

This speaks volumes as the development of human capital is mainly driven by the education system. It can be observed that although human capital development in Malaysia has achieved, to a certain extent, a substantial scope in terms of the quantity of educated graduates, the quality of graduates remain ambiguous.

Citing a study done by the British Council on the employability of graduates in Malaysia, it was found that employers pay a heavier emphasis towards soft skills in comparison to hard skills.

This is in contrast with Malaysia’s education system, which is known to favour hard skills. Consequently, this has resulted in a clear mismatch between the actual skills of graduates and the expectations by potential employers.

In recent times, it seems that more attention is given to a graduate’s ability to deploy a strong set of soft skills. The effectiveness of local universities in promoting soft-skills has not been encouraging given the apparent lack in communication skills, especially in English.

In comparison, graduates of overseas universities are preferred over local graduates, in view of high communication skill as well as problem-solving ability.

Therefore, there appears to be an urgent need to reform Malaysia’s education system in terms of its criterion in developing human capital. While stressing the needs of good academic achievements, the system should also focus on the development of soft-skills in graduates.

Enhancing the continued collaboration between higher education institutions and industry players could help in identifying and matching graduates’ skills with the need of the industries.

To achieve a high-income status, the nation needs a dramatic shift in labour market structure, via reduction of its dependence on skilled and semi-skilled foreign workers.

However, the reality is that the shift is a work-in-progress. This is mainly due to the fact that some employers show reluctance when it comes to adapting to change, as they have easy access to a large supply of foreign workers.

According to a recent labour market report by an investment bank, for every 100 job vacancies advertised, only 13 vacancies are for high-skilled and medium-skilled roles. It is evident a large number of cheap foreign workers in the economy has adverse effect in terms of job creation for local graduates.

Consequently, the rapid expansion of tertiary education is not followed through with adequate employment opportunities. In addition, the lack of industry training for the graduates in their final year of education further exaggerate the problem, intensifying skill mismatches.

Overall, this problem has manifested into the inability to retain domestic talents, as evidenced from the migration of semi-skilled and skilled workers to neighbouring countries.

Despite the ongoing issues, the government has been placing encouraging efforts to implement sound policies in developing a highly-competitive workforce. However, the effectiveness of such policies should be monitored closely as well.

Although the country has done well in ensuring sustainability in jobs creation, the vacancies mainly comprise of low- to medium-skilled jobs which indirectly affects Malaysia’s goal towards achieving a high-productivity workforce.

In line with the rapid changes in technological advancements, effective policies aimed at levying the expectations of the education system and the labour market are needed to reduce the persistent issue of skill mismatches.

These improvements would require substantial amounts of human capital investments to ensure that the bedrock of human capital development and the labour market goes through significant changes to transform its level of quality, concurrent with the demands of the economy.

Initiatives from the government such as the Eleventh Malaysia Plan 2016-2020 and Malaysian Education Blueprint 2013-2025 are clear plans to tackle these issues, but the effectiveness of these initiatives will still rely heavily on the competency of the current institutions and the labour market to make bold changes to ensure that the goals of these plans are met.