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KRI: 40 pct skilled grads in Malaysia are underpaid

KUALA LUMPUR: More than one-third of Malaysia's local graduates who started off with mismatched jobs tend to remain in that predicament over time.

And nearly 40 per cent of experienced graduates are having a tough time getting well-paid jobs that match their skillset, according to Khazanah Research Institute's (KRI) latest report, Shifting Tides: Charting Career Progression of Malaysia's Skilled Talents.

"Since starting one's career on the wrong foot could have enduring effects on future career trajectory, last-mile active labour market initiatives are important to facilitate the education-to-work transition. 

"This could ultimately overcome the underutilisation of skilled talents in driving the nation's development and maximise the return to higher education," said Hawati Abdul Hamid, the lead author of the report.

She said that while the government has supported job seekers by offering grants for entrepreneurship, upskilling and on-the-job training programs, and job search assistance, the influence on graduates' employment results is limited by their knowledge and ability to access these programmes.

Analysis from the Ministry of Higher Education's (MOHE) Graduate Tracer Study shows about 60 per cent of graduates have been employed in high-skilled occupations throughout the past decade. 

Similarly, around 59 per cent of graduates worked in fields related to their study courses in the last five years.

In terms of starting pay, the share of degree holders earning RM2,000 and below has decreased from 63.3 per cent in 2010 to 43.2 per cent in 2022. 

A similar downward trend is also observed for diploma holders, with the share of those earning RM2,000 and below dropping from 93.7 per cent to 78 per cent during the same period.

Meanwhile, the report iterated that graduate employability issues are not solely a supply-side issue. 

Rather, limited vacancies in high-skilled occupations due to sluggish high-skilled job creation in the past decade signal a deeper structural issue within the labour market. 

Even with increased government efforts and improved job matching efficiency in the labour market, weak linkages between the supply and demand of graduate-level jobs contribute to the high incidence of skill-related underemployment and wage stagnation among Malaysian skilled talents, it said.

The report noted there is a pressing need to accelerate the progress of demand-side initiatives and regulations, encompassing high-skilled and well-paying job creation, a fair and decent wage regulation, improved job matching efficiency, and a stronger link between the demand and supply of skilled talents.

In achieving better employment outcomes, the synergy between educational institutions, industry, and the government will be pivotal in shaping the future of work for graduates and, in turn, Malaysia's trajectory as it achieves high-income nation status, it said.

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