Whose fault is it when so many grads are unemployed?

Tan Wan-Peng

Prof Dr Md Zabid Abdul Rashid says we can’t blame graduates when it is the nation that has failed them on the employment front. – The Malaysian Insight pic by Nazir Sufari, April 30, 2017.

AT any one time, Jobstreet lists 5,000 to 6,000 posts targeted specifically at fresh graduates. This is in addition to the 25,000 to 35,000 job listings on the portal daily.

So, if you were to ask Simon Si, head of regional communications at Jobstreet, what is the job outlook for 2017, his reply is: “Yes, there is a slowdown but firms are still expanding or hiring”.

In other words, the economy, while not robust, still needs fresh graduates.

Yet, in the last few years, the number of unemployed graduates has gone up to the extent that Khazanah Research Institute (KRI) said it would undertake a long-term nationwide study on the problem.

KRI in its State of the Household II report released on August 29, 2016 said in 2015, 33.8% of those unemployed had tertiary education, compared with 35.2% in 2014 and 30.6% in 2013.

A tracer study by Higher Education Ministry in 2015 also showed that a quarter of the 254,161 students who graduated that same year remained unemployed six months after graduation.

Choosy, ill-prepared grads

For Si, with 11 years of hiring experience, the feedback and complaints from employers are like a bad case of déjà vu.

Topping the list are poor English and communication skills, unrealistic salary and benefit demands (asking RM3,000 when the market rate is RM2,000), too picky (engineering grads who turn down a job requiring them to do field work) and “bad” attitude.

Some graduates turn up not knowing neither about the job scope nor the company, said Si, and when they are so poorly prepared, it affects their confidence and ability to communicate.

Preparation, Si said, is the key. “If they are prepared, they would exhibit good communication skills, good English, understand the company and understand what the salary and benefits they are offered.”

Si’s observations come as no surprise to a vice-chancellor at a private university, who said simply that graduates can’t find jobs because they lack technical skills.

“I’m not going to be very popular,” said Prof Dr Md Zabid Abd Rashid of Universiti Tun Abdul Razak (UniRazak), directing our attention to a global competitiveness study, which showed that in almost every aspect related to talent – from quality of graduates to growth and retention – Malaysia’s ranking has slipped.

Simon Si, head of regional communications at Jobstreet, says that graduates lack technical and communication skills. – The Malaysian Insight pic, April 30, 2017.

Short-term v long-term goal

For starters, businesses and the government do not have any long-term vision.

 “If we want to build a klia3, based on Malaysian experience and expertise, it might take five years but the stakeholders want it done in three because the cost of capital is high,” said Zabid.

“So, you cannot depend on the local talent supply. You need to import… when you do that, what’s the consequence?”

The nation then finds itself juggling long-term interests with short-term objectives: fancy airport built with minimal local talent.

The biggest problem for any institution or university is to fill this gap in the short term, Zabid said, which is impossible.  

Stuck in comfort zone

A Penang Institute report shows that the overall share of high-skill employment in the economy has actually decreased over time.

In 2011, high-skill employment took up 26% share of total jobs, but this figure has stagnated and even fell by 1% in 2015. On the other hand, the share of low-skill jobs in the country rose from 12% in 2011 to 14% in 2015.

His frustrations, Zabid said, stem from the fact that as a nation, we are losing out daily with our complacency, and the private sector is not a driver of the economy.

“We are not making any effort in leapfrogging because we’re still doing (things) incrementally.”

The lack in urgency is reflected in the foreign worker numbers.

“Why are we allowing two million foreigners here? Every month they give RM1,000, that’s RM2 billion…  one year RM24 billion. Why can’t you just pay a local RM3,000?”

Again, it is the Malaysian tendency to take the easy way out. A restaurant worker, for instance, earns a basic RM1,800 but Malaysians don’t want to work there.

Going low and cheap

Almost all the foreign workers employed in Malaysia are in low-skilled sectors and do nothing to push the country up the value chain.

To go up the value chain, like say, Singapore’s research and development hub, means that Malaysian businesses must be willing to invest in their employees and pay more.

“If you have low margins, how are you going to invest?

“Malaysians go cheap. We need to change this mindset,” Zabid said, referring to the chase to the lowest cost.

“Malaysians still go for the cheapest. This whole policy was because we control the prices of goods and we control salaries.”

“And industries are happy to remain where they are.” – April 30, 2017.

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