Market intelligence for international student recruitment from ICEF
18th Oct 2017

Intense job competition spurring demand for graduate degrees in Malaysia

The Malaysian economy is in transition, and this has resulted in uneven employment prospects across different business sectors and very competitive job market for new or recent graduates. Like other major emerging economies in Southeast Asia, Malaysia has made the shift over the last 30 or 40 years from a resource-dependent economy to one more reliant on manufacturing and services. After the setback of the global economic crisis in 2008/09, the economy recovered quickly and has averaged growth of nearly 6% per year since 2010. The government has set a target to achieve high-income status by 2020 – an economic benchmark that the World Bank defines as a gross national income per capita US$12,236 or more. In 2016, Malaysia’s per capita GNI was estimated at US$9,850. To make that push to high-income status, Malaysia needs to boost the output of its labour force and carefully calibrate skills development to labour market demand. “Accelerating productivity growth is the main path for Malaysia to achieve convergence with high-income economies,” says the World Bank. “Accelerated implementation of productivity-enhancing reforms to increase the quality of human capital and create more competition in the economy will be key.” As these shifting economic sands suggest, Malaysia currently finds itself with a foot in two different economic modes: established business sectors that emphasise manufacturing and service exports on the one hand and, on the other, emerging business sectors that focus more on information technology and the digital economy.

Challenging conditions for graduates

This all sets up a challenging and uneven job market in Malaysia, and one that has proven to be intensely competitive – especially so for new or recent graduates. The Malaysian Department of Statistics’ Labour Force Survey Report 2016 reveals that 27.5% of the country’s labour force has some level of tertiary education. A smaller percentage (just over 12%) have a first or advanced degree, but about a third of the roughly 504,000 unemployed Malaysians in 2016 had also undertaken some tertiary education. As Bank Negara (that is, the Malaysian Central Bank) notes in its 2016 annual report, “Despite the workforce increasingly becoming more educated, job creation in the Malaysian economy has remained concentrated in the low and mid-skilled jobs.” A Ministry of Education “Graduate Tracer Study” finds a similar mismatch between graduate qualifications and labour market demand. Nearly nine in ten (88%) of the 273,000 students who graduated from Malaysian tertiary institutions in 2015 hold either undergraduate degrees or diplomas. Of those, 53% were reported to have started working, 18% chose to pursue further studies, and 24% were still unemployed six months after graduation. Across all graduates, Bachelor’s degree-holders registered the highest unemployment rate at just under 28%. Perhaps it is not surprising then that an August 2017 survey of Malaysians aged 21-to-30-years-old recorded 65% of respondents who said it was difficult to enter the job market with only 56% indicating that they felt secure in their current employment.

Make mine a master’s

This combination of a drive to a more advanced economy for tomorrow and a challenging job market today is now encouraging more Malaysian students to pursue post-graduate programmes. Malaysia’s Ministry of Higher Education reports a 15% increase in students earning master’s degrees between 2014 and 2015. This is partly a function of the broader shifts in the Malaysian economy that we noted above, including a growing emphasis on the digital economy and higher-level skills. But it also reflects the increasing availability of advanced degrees via on-campus delivery in Malaysia, expanded online learning options, and the wider adoption of prior learning assessments that make graduate studies more flexible and affordable for Malaysian students. But, again, questions persist with respect to how well those graduate qualifications will match up with employer demand. Speaking to The Star newspaper, Robert Walters Malaysia Managing Director Sally Raj advises graduates to first gain practical experience before going after an advanced degree. “By doing this, your master’s degree will be more meaningful,” she says. “In Malaysia, employers in general do not specifically request for master’s degree graduates. But having such qualifications can be an added advantage for certain posts, especially for leadership roles like general managers and chief operating officers. Management consultancy firms also tend to value candidates with an MBA.” This drive to pursue advanced degrees may be contributing to continued growth in Malaysian outbound over the last several years. In any case, it appears that recruiters with specialised graduate degrees in key areas of demand, particularly business and information technology, are likely to find a strong and growing market in Malaysia going forward. For additional background, please see:

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