Unemployment in Malaysia [Updated, June 2012]

By Jackie, Researcher
Topic: Society (employability)

The objectives of this research are to find out the latest unemployment rate in Malaysia,to determine which is the worst affected sector, the reasons behind all these problems, suggestions to tackle those problems, discussion on the effectiveness of certain government’s plans and actions to cope with these problems so far, the employers' views regarding this issue and what should the fresh graduates do to secure a better job in the future.

Research Essay

INTI International College Subang

            Normally unemployment rate in developed countries is higher than developing countries due to higher competition. For example, in the last three quarters of 2011, United Kingdom’s unemployment rate has rose from 7.8% to 7.9% and followed by 8.3% respectively. At the same time, Malaysia’s unemployment rate has went up from 3% to 3.2% and followed by 3.3%, and was ranked at 170th place (see note 1) out of 198 countries based on their degree of severity (The Human Resource Ministry of Malaysia and CIA World Factbook, 2012). Observation reveals that youth unemployment rate (see note 2) is even greater than the overall unemployment rate for both of the countries suggesting that youngsters are facing more difficulties in finding jobs as compared to adults. In Malaysia, one of the badly affected sector is the nursing field (see note 3) whereby in 2010, more than 54% of the private nursing graduates were unemployed three to four months after graduating, compared to only 21.7% in 2008 (The Star, 2012). It is a worry situation as fresh graduates find themselves difficult to get employed despite having a solid academic qualification.

Comparison of Malaysia unemployment rate with United Kingdom unemployment rate in 2011.

                 Firstly, graduates lack of working experience and generic competencies. For instance, “jobless nurse” which is the most popular unemployment topic in Malaysia recently, Khoo and Liow (2012) agree that this is due to minimal qualification and zero practical training experience (see note 4). Ideally, organisations prefer to hire people with relevant experience as they can spend lesser time and money to train them (Chong, 2005). Meanwhile, in a survey conducted by Ranjit (2005), 258 Malaysian private sector managers have identified certain soft skills which were lacking in Malaysian graduates such as planning, organizing, problem-solving, decision-making, leadership, creativity, critical thinking, conceptual and networking skills. According to his observation of job advertisements in two leading English newspapers in 2004, he found that the generic skills which are most sought-after by employers are interpersonal skills, oral and written communication, leadership skills, teamwork, problem-solving, creativity and computer literacy. As a solution, Malaysian government has allocated RM10.5 million to launch Graduate Employability Programme (GEP) in 2010 to enhance the skills and competencies of unemployed graduates. 

Generic competencies which are most sought-after by employers

                Secondly, poor command of English. In 2009, JobStreet.com has conducted an English Language Assessment (ELA) test whereby it had ranked Singaporeans first, Filipino second and Malaysians third. This has proven that Malaysian command of English is not up to standard. The survey revealed that 65% of employers have turned down job seekers due to poor command of English, which is the official business language for 91% of Malaysian companies. Chook (2009) states that ‘Proficiency in English influences one’s ability to communicate effectively, and to articulate ideas and solutions well. It also affects self-confidence, the ability to work in team and excel.’ As a solution, in 2003, English was readopted as the medium of instruction for Science and Mathematics in primary and secondary school but sadly, in 2009 government has made decision to revert back to Bahasa Malaysia starting from 2012 onwards, claiming that the step is ineffective as only 19.2% of secondary teachers and 9.96% of primary teachers were sufficiently proficient in English. Fortunately, 89 American educators were invited to teach English in Terengganu under English Teaching Assistantship (ETA) programme since 2009. This programme received positive outcome and therefore, ETA has been spreaded to Pahang and Johor while Education Ministry look forward to hire teachers from Britain and Australia also (The Star, 2012).

              Thirdly, graduates lack of positive attributes. In October 2011, JobStreet.com’s survey taken by 571 human resource practitioners reveals that unrealistically high salary or benefits demand is the top reason why fresh graduates were not hired. According to Siti (2011), many candidates were caught unprepared during interview and she elaborates further that ‘They attend interview without even basic knowledge about their potential employers. It makes a very bad first impression.’ In addition, some of the poor attitudes from the employers’ point of view are choosy about jobs, unwilling to learn, reluctant to serve beyond their own comfort zone, job-hopping (see note 5) and lack of self-confidence (see note 6) in finding a job.

Comparison of the expected salary with the actual salary received for the diploma and degree holders in 2011.

                Fourthly, there is a mismatch between the type of graduation degree and the requirements for the available jobs in the labour market. Naroden (2010) highlights that colleges and universities should provide their students with proper career guidance and information, ensure that their syllabus were relevant to the current industrial needs as well as conduct researches on the market needs to prevent students from taking irrelevant courses. It is better if they could identify the job available in the market before they start the students enrolment. Jeyakumar (2012) has pin point this situation where a freeze was made on the intake of new students in private institution until existing graduates secure jobs as the need for new nurses is only about 1,500 a year in private sector but on average 12,000 students will graduate annually.

                In addition, some external factors give negative impacts towards employment. For instance, the retirement age (see note 7) of private sector has raised from 55 to 60, with an option of four-year extension while for civil servants, it has raised from 55 to 58 (Manimaran, 2011). This will eventually diminish the needs for new recruitment to replace the senior employees. Besides, the extension of maternity leave (see note 8) from 60 days to 90 days seems unfavourable to some employers. They voice out that this will affect work operations and productivity whereby they have to find other people to replace their jobs temporarily, and have to pay additional costs for extra 30 days maternity leave. This may cripple business and cause losses (Indramalar, 2010).

                  In conclusion, fresh graduates must keep upgrading themselves from time to time with a mixture set of skills and lower down their expectation as well as change their negative attitude as competition is becoming stiffer plus the existing of external factors.  

Funny cartoon      

                                                              

Footnotes:

1.Unemployment rate (%) comparison and ranking between countries.

2.Youth unemployment rate in United Kingdom and Malaysia.

3.The Star Newspaper (3^th February 2012), “Nursing job woes cut deep”.

4.The Star Newspaper (8^th February 2012), “Attitude the biggest hindrance”; also please take note that   

   ‘Khoo’ is referring to Jeannie Khoo, Kelly Services marketing director for Singapore and Malaysia while 

   ‘Liow’ is referring to Malaysia’s Health Minister Datuk Seri Liow Tiong Lai.

5.The Star Newspaper (10^th February 2012), “Youths with an attitude”: 12% of workers job-hop every year  

    especially in lower-rank jobs in factories, restaurants or hotels. The Star Newspaper (19^th February 2012),  

    “Costly job hopping”: Employers had to spend an average RM25,000 to RM30,000 to replace each   

     employee who quit.

6. JobStreet.com Employee Confidence Index, a measure of a jobseeker’s confidence in finding a job.

7.The Malaysian Insider (26^th September 2011), “Private sector retirement age to go up”.

8.The Star Newspaper (12^th July 2010), “Demands of motherhood”.