Framework for Action: Preparing for Malaysia’s Future of Work

Malaysia has an ambitious goal of becoming a developed nation through the implementation of various national development initiatives and masterplans, as it embraces the Fourth Industrial Revolution (4IR). However, there are still several hurdles on the route towards developed status, particularly the task of producing in-demand talent for the job market. An analysis of the country’s employability policies and skills gaps can help UK education institutions to understand how best to serve their Malaysian students as well as developing partnerships to support institutions in Malaysia.

Growth of Malaysia

The Vision 2020 development masterplan and Malaysia’s Economic Transformation Programme (ETP) were designed to keep Malaysia on course towards its development goal. The country is aware that beyond technological advancement, it also needs to ensure that its future talent can meet global market demands. 

Malaysia’s Education Blueprint 2015-2025 (Higher Education) was thus designed to future-proof talent for the 4IR. Talent Corporation Malaysia (known as TalentCorp) was also set up in 2011 to serve as a bridge between talent, industry, academia and the Government. Its key focus is to craft solutions to talent issues in Malaysia and to explore trends affecting the future of work, with the aim of producing quality talent.

In May 2018, Malaysia saw a newly elected government led by Mahathir Mohamad under the Pakatan Harapan coalition. Multiple initiatives were tabled in October 2018 in the Malaysian Budget 2019 to assist Malaysia in embracing 4IR, including initiatives aimed at small businesses, digital transformation of industries and rural broadband. Three strategic directions have been outlined by Malaysia’s education minister, Dr Maszlee Malik, as a compass for improving the country’s education system: value-driven education, improving the quality of the education system, and increasing autonomy and authority for all education institutions. On top of that, higher education institutions in Malaysia are also encouraged to emphasise collaboration and internationalisation efforts. 

Current Talent and Work Landscapes

According to the UNESCO Institute for Statistics, 41.9% of Malaysians were enrolled in tertiary education in 2017; a slight decrease from 44.1% in 2016 and 42.4% in 2015, with around 300,000 university graduates annually. Although the country expects to add more jobs to the economy in 2019, the unemployment rate is forecast to remain around 3.3% (The Edge Malaysia) while the total number of employed people is projected to increase from 14.8 million in 2018 to 15.1 million in 2019 (Economic Outlook 2019).

However, although tertiary education is typically believed to secure a better future, many Malaysians graduating from universities are unable to find employment. Looking at the country as a whole, tertiary-educated Malaysians experience higher unemployment rates on average than their counterparts who only have a primary or secondary education. The same trend is seen across each of Malaysia’s three main ethnic groups despite significant differences in overall unemployment between these groups.

Source: Department of Statistics Malaysia

The Ministry of Finance attributes this high unemployment rate among those with tertiary education to skills gaps. A total of 81% of employers reported feeling disappointed with the Malaysian graduates’ communication skills (TalentCorp Survey), while 56% claimed that they do not have creative/critical thinking ability. Around 50% of employers are not satisfied with the graduates’ analytical or problem-solving competencies. Universities are encouraged to work with industries to develop a curriculum for their students but only 10% of employers were consulted over the past years.

MIDF Research also pointed out another issue is that many of the available jobs in Malaysia’s current economy are low-skilled: in 2017, 86.3% were low-skills jobs, with 76% for elementary occupations (routine-based physical jobs) and 10.3% for plant & machinery operators. High-skills jobs such as professionals and technicians & associate professionals only made up 4.1% of total job vacancies.  According to the latest Central Bank of Malaysia's (Bank Negara Malaysia) report, the economy has not been able to provide sufficient high-skilled jobs for graduates. The report showed that throughout 2010 to 2017, although the net employment gains in high-skilled jobs stand at about 98,514 people, we saw 173,457 diploma and degree holders entering the job market per annum. In recent occasions, the government has expressed its interest in growing the job market to allow more work opportunities, However, there is no mention on how to increase high-skills job vacancies.

Future talent and work landscapes

Focusing on highly-skilled job opportunities, the 2017/2018 Critical Occupation List (by TalentCorp) shows the occupations that are skilled, sought-after and strategic across 18 sectors in Malaysia. The top 10 occupations are as below:

1. Managing Director and Chief Executive
2. Finance Manager
3. Policy and Planning Manager
4. Business Service Manager
5. Business Services and Administration Manager
6. Sales and Marketing Manager
7. Research and Development Manager
8. Manufacturing Manager
9. Construction Manager
10. Supply, Distribution and Related Manager
11. Followed very closely by ICT Manager, Chemist, Geologist, and Mathematician.

Based on data collected from employment agencies including Robert Walters Malaysia, ManpowerGroup Malaysia, Hays Malaysia, Human Resources Online and WEF, the following sectors in Malaysia are expected to experience the strongest employment growth over the next few years:

1. Information technology (IT)
2. Sales and marketing
3. Banking and finance
4. Global shared services
5. E-commerce
6. Supply chain

How does this affect recruitment?

While Malaysian students studying in the UK typically choose Law, Business and Allied Health subjects, university courses around IT, Marketing and Finance can expect a higher recruitment level (HESA Data 2018). The government is also promoting the importance of Science, Technology, Reading, Engineering, Arts and Mathematics (STREAM), on top of mastery of the English language.

The current Top 10 subject choices made by Malaysian students studying in the UK and its growth from 2014 - 2018:

Source: HESA

In demand skills

Based on a report produced by the World Economic Forum, the following abilities help determine an employee’s marketability in Malaysia:
1.    Critical thinking and analysis; complex problem-solving skills; future thinking
2.    Leadership & partnership/networking
3.    Communication and resource management skills
4.    Adaptability to digital world; digital literacy

An international education is still regarded as superior to the national system. Parents still view a UK qualification as a tool to land a better job in the future. The experience of living overseas also helps develop the soft skills which are crucial for the graduates’ employability. It is increasingly important to promote the employability development element. 

Closing: Challenges and opportunities

Recognising the challenges posed by 4IR can create opportunities for UK institutions to support education providers in Malaysia. Many Malaysian institutions currently lack institutional awareness and readiness for 4IR, with limited access to information on what employers want. Universities also face difficulties in designing more market-driven curricula. Educators at school level are not equipped with the knowledge to prepare and guide their students in choosing study and career pathways. 

Meanwhile, the UK has made great progress in developing more industry-ready curricula. Technology transfer programmes are sought after by the local ministries and education institutions. This is a great opportunity to foster better partnerships with local ministries and education providers. In recent months, UK institutions and the British Council had been mentioned by the Ministry of Education. Our opinions are valued and appreciated. The taskforce assembled by the Ministry to research on recognition of Unified Examination Certificate (UEC), as an example, mentioned its intention to consult the British Council. The institutions' involvement in the these knowledge sharing and partnership opportunities helps build awareness and exposure of the institutions among the Malaysian communities, which will be useful for student recruitment in the long run. 

At the same time, globalisation and internationalisation heighten students' abilities to perform in an increasingly diverse workforce. Awareness of the strong importance placed on communication skills, critical thinking and problem solving by Malaysian employers can help to train students in the relevant skills and promote the UK education experience as a platform to pick up these skills.