Career prospects of fresh graduates unlikely to improve soon, say experts

Hailey Chung Wee Kye

A lack of high-skilled positions amid an excess of graduates has led to widespread underemployment and job mismatch in Malaysia. – The Malaysian Insight file pic, March 24, 2021.

FRESH graduates are not likely to see better job prospects in the near future even as the Covid-19 threat is gradually brought under control in Malaysia, economists said.

They told The Malaysian Insight it was an old problem of a surplus of graduates meeting slow wage growth and lack of career opportunities that had began well before the pandemic last year.

“Even when herd immunity from the vaccination programme is reached and the labour market recovers, the salaries for fresh graduates are unlikely to improve due to long-term structural issues,” said Benedict Weerasena, an economist at independent research institute Bait Al Amanah.

“These include the lack of high-skilled job creation amid an excess in supply of graduates.

“As such, fresh graduates have no choice but to take the available jobs in the market, putting downward pressure on wages and creating a major underemployment problem.”

Weerasena said the latest labour market review by the Statistics Department highlighted the persistent issue of job mismatch and skills-related underemployment among graduates.

“More graduates in the country are taking up jobs that do not match their qualification or their field of study as the shortage of skilled jobs is further worsened by the Covid-19 health crisis,” the report stated.  

Meanwhile, Weerasena said Malaysia had remained heavily dependent on low-skilled foreign workers.

“It puts the nation in a low-wage, labour-intensive and low-productivity investment trap which then suppresses the growth of overall wages in the long term.”

Mohd Sedek Jantan, head of investment and financial planning at UOB Kay Hian Wealth Advisors, said salaries were determined by labour market dynamics.

“It refers to changes in jobs that take place as well as entries into and departures from economic activity affected by hirings, separations and the establishment and closure of self-employment activities.”

Employers’ view of paper qualifications as a desired commodity was a contributing factor to  underemployment

He said degrees served as a proxy for work performance even though there was no correlation between the two. “This idea is not just biased but also a push factor for students to try to game the system,” Sedek said.

Likewise students who see their education as a commodity could perform worse than their motivated peers, he said.

As for why good, experienced workers were also facing stagnant pay, Sedek said this was due to the employers’ “sticky wage” theory.

“Wages are slow to rise because they are even slower to fall. So managers hold on to cash and delay salary increments because they know how hard it will be to cut salaries later.”

He advised employers who could not afford pay raises to offer better worker benefits.

“For example, most B40 workers are used to getting healthcare at the government hospitals.

“So instead of paying for them to go to private hospitals, employers could let them make grocery or basic necessity claims, which would be more useful”

Sedek said fresh graduates who opted to further their studies in the absence of a well-paying job are creating the phenomenon of a “sandwich generation”.

“The sandwich generation is when the fresh graduates’ parents are caught in between. They need to take care of their parents and in-laws, at the same time, taking care of their children,” Sedek said.

Another economist who requested anonymity supported the prediction that fresh graduates’ salaries will remain stagnant for a while.

“It is not because low salaries are a result of the pandemic, but there are too many structural problems in education and the economy.

“On advice to fresh graduates: grab any job and never do a postgraduate degree thinking that it will get you a higher salary.

“This is unpatriotic but pragmatic, go to where your talent and capabilities are appreciated and compensated accordingly,” the economist said.

A communications degree graduate, Darren Tay Zhu Wei, 23, said he was finally hired in March after completing his tertiary studies last May.

He now works as a copywriter in the e-commerce industry in Kuala Lumpur.

“I gave RM2,000 as my expected salary, despite knowing the standard salary for fresh graduates is RM2,500, as I wanted to get hired as soon as possible.

“To my surprise, they gave me RM2,400 and I was more than happy.”

The Johorian said salaries and wages for internships and fresh graduates in Malaysia are not high.

“Such wages may be adequate in rural places like Pontian, where I come from, but not in urban centres like Kuala Lumpur, Shah Alam and Subang Jaya where the standard of living is really high.

“Salaries are moribund and we’re not getting paid what we want.”

Another fresh graduate who declined to be named said she is unsatisfied with her pay. She graduated in July last year and was hired a month later in the finance sector.

“The money is not enough to pay for the education of my younger sibling. I accepted the job to survive and gain work experience.”

She said she was frustrated that she was not taught the job requirements in university and that she had to upskill after graduation.

She wants the government to cut inflation and living costs and to compel employers to share their high profits with the workers via wages.

A business graduate who asked for anonymity said she had a full-time job but regularly took on work on the side,

“I am lucky to have landed a job at a reputable company with a lucrative salary.  However, many of my peers haven’t been as fortunate.

“I have friends with the same degree who are earning way less than RM2,500 and their companies do not contribute to the Employees Provident Fund (EPF) or Socso too.”

She said graduates needed to be aware of salary rates and their rights.

“What frustrates me most is that companies would take advantage of desperate fresh graduates who are ignorant with the current rates. And there are no strict repercussions to these companies.”  – March 24, 2021.

Sign up or sign in here to comment.


  • Willing buyer, willing seller. As long as employers are not breaking the law, they should be at liberty to pay whatever they wish to pay. If you think you are being exploited, then just don't work there. No one is forcing you to do so.

    Posted 3 years ago by Yoon Kok · Reply

  • Salaries are moribund and were not getting paid what we want. ... That is true, but are you worth what you want?

    Posted 3 years ago by Yoon Kok · Reply

  • Our education policy need to revamp to train our graduates to be internationally so they can both survive locally and at overseas

    Posted 3 years ago by WK T · Reply