Unemployment Crisis Among Fresh Graduates


By Isaac Teoh Shi Yang


Unemployment is a distressing occurrence for graduates because it impacts many aspects of their personal lives, particularly for those who took out student loans. Statistics show that the graduate unemployment rate has increased over the last decade as the number of graduates entering the labour market has increased. Since the start of the economic recession in the United States in 2007, graduate unemployment has been rising, making it harder for graduates to find or keep work in their chosen fields. Graduates who are unable to find work in their field of study are obliged to look for work in fields unrelated to their degrees. Unfortunately, to avoid any future dangers, most firms rarely accept graduates from other areas. Unemployment and underemployment among graduates have resulted from a mismatch between graduates’ aspirations, employment criteria, and available possibilities. The increase in local and international graduates competing in the market pool, educational institutions that do not keep their curriculum relevant to the industry, college pressure to pursue something that does not really matter, and the belief that an academic degree is the only path to success and security have all contributed to the increase in graduate unemployment.

Unemployment prospects in Malaysia

Unemployment among young people with diplomas and degrees is now three times the national average. According to the Malaysian Ministry of Education, 53 percent of the 273,373 graduates in 2015 were employed within six months of graduation, while another 18 percent chose to continue their education. This leaves 24% of all grads jobless. According to the Ministry of Human Resources, youth account for almost two-fifths of the jobless rate. According to the Department of Statistics, Malaysians with tertiary education account for 34.6 percent of the 463,700 unemployed. Malaysia has a high unemployment rate. With 4.6 percent, Indian graduates are the ethnic group with the highest percentage of youth unemployment. Bumiputera (5.5 percent) and Chinese are the next two groups (2.9 percent). Those without a formal education make up the majority of the unemployed in both Indian and Chinese ethnic groups. This has raised worry among Bumiputera people. Selangor has the most employers, accounting for 23.2 percent of total national employment, as well as the most unemployed graduates, accounting for 2.8 percent of general unemployment and 9.4 percent of youth unemployment in 2017. While Malaysian universities produce over 200,000 graduates, one out of every five graduates is unemployed, with the majority of degree holders being unemployed. As a result, the purpose of this study is to look into the elements that may lead to graduate unemployment in Malaysia.

Recent updates in relation to the COVID-19 pandemic

In 2020, the world will be slammed by the unprecedented COVID-19 occurrence, which will cause Malaysia’s worst economic crisis since 1998. The execution of various Movement Control Orders (MCO) to restrict the spread of COVID-19 has resulted in an increase in the number of job losses and, as a result, a 200-thousand-person increase in the country’s unemployment rate to 718.1 thousand in 2020. The epidemic has an impact on new entrants to the labour market, particularly recent graduates. With more unemployed folks who lost their work during the epidemic, the competition for jobs among graduates is becoming more difficult.

Factors identified/reported contributed to such crisis

    • Poor command of English

Malaysia’s principal business language is still English. English proficiency is no longer an advantage, but rather a must for efficient communication. However, many Malaysian fresh graduates find it difficult to speak effectively in English.

Because most job interviews are performed in English, many graduates fail at the first stage of the hiring process because their poor command of the language impairs their self-confidence during the interview sessions.

    • Lack of technical and soft skills

Companies do not want to train employees from scratch, therefore fresh graduates are expected to be well equipped with the necessary skills and expertise to immediately add value to them.

Employers and industry participants claim that the majority of Malaysian fresh graduates lack the technical, problem-solving, and soft skills needed to compete for jobs in the country.

As a result, the employment market is extremely competitive, as only a small number of people have the necessary skill sets to get hired.

    • Picky about the job or company

In comparison to earlier generations, most fresh graduates nowadays would not accept a job just to get a job. Candidates nowadays are searching for a better overall compensation package, including allowances and non-monetary benefits, in addition to a higher income.

Aside from that, Malaysian fresh graduates value company culture, work-life balance, and other factors. However, not all organisations provide these benefits, and only the best and most uncommon skills are hired, leaving others jobless.

    • Unrealistic salary and benefits expectation

Malaysian fresh grads are notorious for their entitled attitude when looking for work. This is reflected in the fact that new graduates demand far better beginning salary and benefits than industry norms.

Employers are frequently surprised by recent graduates’ excessive expectations, given their lack of knowledge and experience. Those who refuse to accept lower pay are pushed by companies to hire other graduates who are willing to take the market rate and have a strong desire to learn.

    • Lack of digital skills

The world is in the midst of a digital and automated era. As a result, digital abilities such as digital marketing, big data analytics, and e-commerce are among the most in-demand employment talents.

While digitization created new employment in Malaysia, the majority of incoming graduates lacked the necessary digital skills to fill them. This has also contributed to lower starting pay for new graduates in a competitive employment market.

    • Poor attitudes at work

Malaysian young graduates are commonly described as ‘bruising easily,’ unable to bear employment and societal stress due to their parents’ overprotection.

Freshmen are frequently regarded as lethargic but demanding, passive, full of excuses, and quick to quit. These perceptions undoubtedly reduce their employability, hurting the labour market in general.

We agree that it is a rising concern in Malaysia, even though it does not apply to the entire population.

    • Delay in the job hunt

A growing proportion of Malaysian fresh graduates are deferring their job search because they want to take a long break following graduation.

While it is understandable to recharge after years of education, the prolonged period could be damaging to recent graduates’ employability.

Furthermore, many job openings may be filled by someone else because organisations have already employed someone.

Measures taken by the Malaysian government

The government wants the jobless rate to fall below 4% by 2022, according to Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz, and that it is said that the aim of 600,000 jobs is achievable because, as of November 30, 2021, the government has created about 497,000 jobs, or 99.3% of the 500,000 jobs targeted for the year, whereby there will have the Malaysian Family Work Guarantee programme being carried out next year, and one of the initiatives under this programme is the Malaysia Short-Term Employment Programme (MySTEP), which offers roughly 80,000 jobs in the public sector and government-linked businesses.

In addition, the government is upskilling the workforce to provide 220,000 job openings, and partnering with the Social Security Organisation (Socso) to provide employment incentive initiatives to 300,000 job seekers.

As of November 2021, the government had distributed RM8.8 billion (US$2.1 billion) to 11 million Malaysians via Bantuan Prihatin Rakyat (BPR), COVID-19 Special Assistance, and Income Loss Assistance (BKP).

Lastly, according to Bernama, 1.9 million workers have benefited from the Wage Subsidy Program, while a million MSMEs have received assistance through the Prihatin Special Grant.

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