Skills mismatch an issue of concern

SKILLS mismatch has been a persistent issue in Malaysia where the expertise of jobseekers, particularly fresh graduates, do not match industry requirements.

This situation has caused some employers to look for the right talents abroad and ended up hiring non-nationals or expatriates for certain positions.

Hence, there is a need to reflect upon the larger picture or structural issues that underly skills mismatch in the country.

The Higher Education Ministry and Human Resources Ministry are two key ministries which play a crucial role in addressing the supply (jobseekers) and demand (job vacancies) in the labour market.

Our education system today churns out approximately 300,000 graduates every year and what is of great concern is that Malaysia has one of the highest graduate unemployment rates in Asean.

Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan views skills mismatch as a costly affair.

“The estimated cost (from skills mismatch of global workforce) is an annual Gross Domestic Product loss of US$5tril (RM21.25trillion), bigger than the size of Germany’s GDP,” he said.

He quoted data from the Organisation for Economic Co-operation and Development (OECD), whereby an estimated one-third of the global labour force, equivalent to more than a billion people, have the wrong skills.

“Skills mismatch is of great concern to us employers. Someone has to take the responsibility to lead and address structural issues for the longer term,” he stressed.

Declining supply

As Malaysia is now in the rapid globalisation era with the Fourth Industrial Revolution in full throttle, more digital jobs are being created and the need for jobseekers to be highly skilled, adaptive and resilient with good command of both English and the national language is becoming increasingly necessary.

On the contrary, it has become apparent that students opting for the science stream are declining in numbers while there are more students acquiring degrees in general disciplines that do not meet the current industrial needs.

Should this continue, Malaysia may not be able to produce a highly employable workforce and it may take a much longer time for the country to achieve the vision of becoming a sustainable nation with sustainable workforce.

According to The Centre of Applied Data Science chief executive officer Sharala Axryd, Malaysia’s graduate unemployability rate is about 11%, while at the same time, the country has one of the highest brain drain in Asean.

Axyrd observes that one of the main reasons that jobseekers do not have skills required for future jobs is that the education system does not have clear indicators on the actual industry demand.

“We have a colossal mismatch for a country ramping up towards Industry 4.0 requirements and the type of companies that we attract as investors into the country,” said Axryd.

She believes that Malaysia’s education system requires extreme adaptability on digital skills needed and agility to promote a continual lifelong learning process and access.

“We tend to produce graduates with degrees that are very specialised in a specific vertical. And for whatsoever reason a company ceases to exist, then those skills will not be relevant to another industry,” she said.

“The traditional way of doing business has become impossible, especially with the post-Covid19 situation. Businesses must have a plan on where they are and where they want to be with digitalisation,” she emphasised.

Labour market data

MEF sees the Hiring Incentive Programme, introduced in the National Economic Recovery Plan (Penjana), as a catalyst for the Human Resources Ministry in transforming the delivery of employment services.

The Government has entrusted the ministry’s agency, the Social Security Organisation (Socso), with the responsibility to implement several initiatives under Penjana including the Hiring Incentive Programme (PenjanaKerjaya) and the national job portal, MYFutureJobs.

Through PenjanaKerjaya and MYFutureJobs, employers can post vacancies and jobseekers can register to apply for jobs, and benefit from the hiring incentive programme.

Samsuddin said with Socso managing the hiring programme, it could also closely monitor labour market information as the system is capable of providing real-time data.

“Key indicators that can help the ministry and Socso to plan and coordinate strategies to increase the employment rate are certainly a strong value-add from the job portal,” he noted.

With the hiring incentive made available for employers to tap into, it reduces the burden of employers especially after having gone through difficult times from the impact of Covid-19.

Under the programme, employers can utilise the incentive of between RM800 and RM1,000 for hiring workers.

They can also benefit from the training fees provided by the Government of up to RM4,000 to train each individual hired through the programme.

On job portals and recruitment fairs, Shamsuddin is of the view that they only “treat the symptoms” rather than provide a solution to skills mismatch in the labour market.

He said a proper diagnosis is needed on this matter, where the relevant agency should urgently act on it.

“The problem with the current system is that we lack proper data to help the Government make efficient and effective policies, while having to juggle with much fragmentation of overlapping functions within the same ministry, particularly in the area of labour demand.

“The establishment of a single window that looks at the overall implementation is very significant and timely at this point in time,” he pointed out.

Job portals and recruitment fairs provide precious opportunity for jobseekers – including graduates, school-leavers, the unemployed and retrenched workers – to gain employment, especially during economic slowdown, according to Malaysian Trade Union Congress’ Selangor and Federal Territory chairman Wan Noorul Azhar Mohd Hanafiah.

Wan Noorul Azhar said MYFutureJobs is a practical job portal and user-friendly with a strong matching capability that employers and jobseekers should make full use of.

He knows people who have found jobs either by registering at MYFutureJobs portal, attending open interviews at Socso’s career fairs or were employed through the PenjanaKerjaya programme.

He said the portal is free for both employers and jobseekers, and understands that Socso has a team of close to 400 career counsellors and an additional 500 career counsellors by October to provide handholding for jobseekers who are vulnerable and require close monitoring. “For us workers, this is certainly a value-added service as we do not pay any additional premiums for the services to receive such assistance from Socso,” he added.

According to Datuk Mohd Sahar Darusman, Socso’s chief of Employment Insurance System Office, there has been a significant increase in the number of vacancies and job seekers registration on MYFutureJobs portal since Penjana was implemented on June 5 this year, where on average more than 2,300 jobseekers and over 2,000 vacancies are posted daily.

In total, more than 204,000 jobseekers have registered and there are close to 200,000 active vacancies on the portal.