Asia Malaysia The future of employment

The future of employment

Analyst Sharifah Zahra takes a look at employment trends in Malaysia




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Towards the end of 2019, Malaysia recently announced its Malaysia Critical Occupational List (COL) for 2020 and beyond.

COL basically registers jobs which employers need to fill but have difficulty filling. COL will continue to expand creating a comprehensive map of Malaysia’s most in demand current and future skills and talent towards the Industrial Revolution 4.0.

The problem
An issue which has been hotly debated is that underemployment and unemployment is mostly due to lack of skilled labour, lack of creativity among job seekers, inability for job seekers to face challenges, lack of innovative skill sets or initiatives and other personal development issues that preclude the ability for a person to be hired or taken into service.

Recently in November 2019, Tun Mahathir addressed this issue by highlighting “that the demands of the current working world had evolved, and workers needed to be creative, adaptable, agile and prepared to expect the unexpected; which were traits that youth may not have. When a big proportion of our youth are unemployed, we lose their potential contributions to the country, waste the investment we have made on their education, and create a fertile ground for discontent and instability.”

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Is the Government doing it right?
In recent years we have seen a growing interest in technology-driven innovation in financial services, especially, in Malaysia. It is said that new technologies, digitization, automation, and other trends like Industry 4.0 results in changing demands for sophisticated skills and the trend towards employment.

However, too much emphasis on the problems mentioned above does not fairly explain the reason for unemployment in Malaysia.

Other areas of concerns

  1. National R&D expenditure – In 2018, Malaysia has recorded only 1.4% of the country’s GDP, only 0.2% increment from the previous year. For years, research, digitalisation and technological advancement have been the subject in economic development, however, we have yet to see commercialisation and importance in this area.
  2. Lack of coordination between the educational institution and industry players making local grads not suitably prepared for actual work required – Most of the universities in Malaysia are unable to link students to proper internship programmes. Industries refuse to be part of the tertiary education lines limiting our students’ exposure to having a first-hand experience to current industry development. For example, in University of Auckland New Zealand, frequent sessions are conducted between students and CEOs in order to expose the student with the current innovation and industry demand.
  3. Easy excess to foreign labour – Based on the Department of Statistics and Bank Negara as reported by the Edge, for the past years, an incredible 81.5% or four out of five jobs created in 2016 went to foreign workers, even as graduate unemployment saw a sharp increase from 2011. It is sadly believed that this trend will remain.
  4. High cost of living but low income –2018 BNM Annual Report findings suggest that incomes received by Malaysian employees are not commensurate with the value of output they produce. This is particularly evident in the wholesale and retail trade, food and beverage and accommodation industries that make up 19% of economic activity and 27% of total employment in Malaysia. These industries are generally more labour-intensive, and dependent on low-skilled workers”.
  5. Weak government policy and enforcement on education and labour laws – labourers regardless of high end or low end are mostly afraid to bring up issues due to the political environment that all of us know exists.

Moving forward, it is vital to understand that there are other ways to spur our industrialisation and grow our economy. Yes, digitalisation is important but what will be the social consequences that we are going to have? It depends on the role of the Government to develop robots or to take care of the social welfare of the nation.

If the economy is not ready to produce more robots especially AI and FINTECH in all industries than maybe we should just limit the technological advancement to certain sectors of the economy. Today’s technology development is seen as “peer pressure”.

It is because all the other nations are doing it so it becomes a push factor for us to force our development further.

In 2018, BNM has reported that the Malaysia economy itself does not create sufficient high-skilled jobs to absorb the number of graduates entering the labour force. In addition, a study by Khazanah Research Institute has also found that 95% of young workers are in unskilled jobs and 50% of those in low-skilled manual jobs are over-qualified for these occupations.

It is easy to just shift the direction from one to the other by publishing reports such as COL.

However, the key to the future is more to develop the right root for future employment. As long as the economy has not reached its optimal production and population, there is always room for jobs and opportunities. Instead of focusing on the lack of creativity among youngsters and youths, the government should have a thorough analysis on how to generate new platforms for unskilled grads or maybe we should also focus on the lack of creativity by the Government in handling this issue. -/TISG

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