The School-to-Work Transition of Young Malaysians

1. The School-to-Work Transition of
Young Malaysians
Date: 12 December 2018
Venue: Mercu UEM, KL Sentral

2. KhazanahResearchInstitute
SWTS
key findings

3. KhazanahResearchInstitute
Youth education and training
for employability

4. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
1. Qualification and skill mismatches
Education not equipping youth with skills employers are looking for
Skills ranked most important by employers
▪ Malaysian education and training institutions emphasize academic and
professional qualifications but employers are looking for soft skills and
work experience
▪ Lack of emphasis on lifelong learning to adapt to the rapidly changing
nature and world of work
Source: KRI (2018)
4
50
31
27
0
10
20
30
40
50
60
Soft skills Work experience Hard skills
%

5. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
1. Policy implications and options
To address skills mismatches
• Promote teaching of soft skills, including ‘learning to
learn’ skills
• Emphasize work-based learning to better match the
supply of and demand for skills
1
2
5
• Incentivise employers to provide work-based
learning, with particular attention to support for SMEs
Widely publicise and support use of the Critical
Occupations List to identify & more effectively address
skills shortages
3
4
• Adopt a forward-looking approach to anticipate and
match skill needs5

6. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
2. TVET not a popular education pathway
TVET emphasized in Education Blueprints but low participation
▪ Only 13% of all upper secondary students are pursuing TVET courses;
while at higher education level less than 9% are in polytechnics
▪ Yet those already in the labour market identify TVET as the most useful
qualification for getting a ‘good job’
▪ Wage differential between TVET holders and other types of graduates
Youth in upper secondary education Youth in tertiary education
6
Source: KRI (2018) Source: KRI (2018)
1
2
2
2
6
9
13
29
38
0 20 40
Institutes for Teachers…
Overseas Colleges Branches
Community Colleges
Matriculations Colleges
University Colleges
Polytechnics
Colleges
Private Universities
Public Universities
%
68%
13%
12%
7%
National secondary,
fully residential and
form 6
Technical and
vocational schools
National religious
secondary schools
International/private
schools

7. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
2. Policy implications and options
To improve TVET
7
Overhaul the current TVET system to:
o ensure strategic coordination among large number of
training providers,
o prioritize demand-driven approach with close industry
involvement,
o establish reliable competency standards and
qualifications framework, and
o raise the status of TVET qualifications
Promote competency-based education and training
using short modular courses directly linked to specific skill
needs
1
2
Evaluate the applicability of the German dual
training system to the Malaysian context3

8. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
3. STEM education is still lacking
Take-up rate of science subjects and STEM courses unsatisfactory
70
63 63
56
97
30
37 37
44
3
0
10
20
30
40
50
60
70
80
90
100
Biology Chemistry Physics Additional
mathematics
Computer
science
Not
enrolled
Enrolled
%
STEM subjects enrolled by upper
secondary students
Main field of study of tertiary students
8
▪ Only about a third of all students at upper secondary and tertiary levels are
enrolled for STEM related subjects
▪ The government’s 60:40% target ratio for science to arts students has
yet to be achieved
Source: KRI (2018)
Source: KRI (2018)
2
4
9
16
4
4
4
7
8
42
0 10 20 30 40 50
Biotechnology
Information technology
Science, mathematics and…
Engineering,…
Agriculture and veterinary
Services
Education
Arts and humanities
Health and welfare
Social sciences, business…
%

9. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
3. Policy implications and options
To promote STEM
Make STEM more attractive and widely available
from a young age, including through setting up ‘maker
spaces’
Adequately equip teachers and students for STEM
1
2
9
Integrate STEM subjects with the Arts (STEAM) to
raise students’ interest in and understanding of science and
its application
3

10. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
4. Youth lack entrepreneurship skills
Entrepreneurship not viewed as a pathway from school-to-work
10
▪ Youth are not aware of importance of entrepreneurship skills, whether
to start and sustain their own business or to succeed in the gig economy
▪ Starting a business is not a popular option, except for those already working
0
5
10
15
20
25
30
35
40
Upper-secondary
youth
Tertiary
education youth
Job
seekers
Young
workers
Work for the government/public sector Work for a large international company
Start your own business Work for a large private company
Do not care, any job offered Not sure
Other
%
Preferred types of work
Source: KRI (2018)
0
5
10
15
20
25
30
Upper-secondary
youth
Tertiary
education youth
Job
seekers
Young
workers
Communication skills Creative and analytical thinking
Being honest and hardworking Organisational adaptability
English language proficiency Ability to get along with people
Knowledge of the business world Teamwork skills
Entrepreneurship Other
%
Entrepreneurship
Skills considered most useful for getting
a good job
Source: KRI (2018)
Starting a business Starting a business

11. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
Provide courses that develop entrepreneurial
qualities, including business acumen, initiative,
innovation, creativity and risk-taking among youth
4. Policy implications and options
To encourage entrepreneurial behaviour
11
Promote sustainable businesses - combine training
with access to funding, information and markets,
mentoring support, business development services and
conducive regulations
Take into account the specific constraints that
youth face in establishing sustainable businesses
1
2
Ensure that services offered by SME Corp. and other
government agencies pro-actively reach young people
3
4

12. KhazanahResearchInstitute
Their job search process

13. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
5. Mismatch of job search and recruitment methods
Mismatch between how young people look for jobs and how employers recruit workers
13
Source: KRI (2018)
Most used job search and recruitment methods
▪ Youth register at public employment services and attend job fairs or open interviews
▪ But employers rely on online advertisements, followed by informal networks of relatives
and friends
▪ The mismatch of job search and recruitment methods affects the smooth functioning of the
labour market
Apply directly to
employers
Assistance of
relatives/friends
Answer
advertisements
Public employment
service
Directly
approached by
employer
Employability
training
programme
Public
employment
service
Attend job fairs,
open interviews
Employability
training course
Answer
advertisements
Apply directly to
employers
Assistance of
relatives/friends
Young workersJob seekers
1
2
3
4
5
6
Employers
Online
advertisements
Relatives/friends of
employees
Relatives/friends of
employers
Print advertisements
Agent/labour
contractors
Educational
institution

14. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
5. Policy implications and options
To address the mismatch between job search and recruitment methods
14
Enhance the role of employment services, both
public and private
Ensure that employment services are available
where they are most needed, particularly in rural
areas
1
2
Strengthen the outreach of employment services by
integrating with other local service providers (one-stop
centres)
Make greater use of digital technology to facilitate
job search and job matching processes
3
4

15. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
6. Youth want migrant and expatriate jobs
Youth consider foreign workers as competitors for job opportunities
36 41
48 45
54
47 49 47
36 24
23 23
14
13
15 15
21
27 21 23 24
30 25 26
7 8 9 9 8 11 11 11
0
10
20
30
40
50
60
70
80
90
100
Upper-
secondary
youth
Tertiary
education
youth
Job
seekers
Young
workers
Upper-
secondary
youth
Tertiary
education
youth
Job
seekers
Young
workers
Migrants Expatriates
Yes, compete for
same types of job
No, do not want
the jobs they are
doing
Not sure
Do not know
%
Whether migrants and expatriate workers are a threat to job opportunities
15
Source: KRI (2018)
▪ The different youth groups feel that both low-skilled migrant and high-skilled
expatriate workers threaten their job opportunities
▪ They clearly want expatriate jobs
▪ When they do not want the migrant jobs, it is because these are ‘3D’ jobs offering too low
pay, particularly when they can get higher wages from doing such jobs in Singapore

16. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
6. Policy implications and options
To address the competition posed by foreign workers
Review Malaysia’s cheap labour policy
The review should aim to improve jobs and incomes
for young Malaysians and reduce the lure of ‘3D’ jobs in
Singapore
1
2
16
The review should also address the impact and
implications of a cheap labour policy on the country’s
productivity and growth
3

17. KhazanahResearchInstitute
Their employment status
and working conditions

18. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
7. Youth are going into informal and
‘non-standard’ employment
More opportunities but often poor quality of jobs
71
64 63 68
13
16 19
17
16 20 18 15
0
10
20
30
40
50
60
70
80
90
100
Upper-
secondary
youth
Tertiary
education
youth
Job
seekers
Young
workers
More job
opportunities
Less job
opportunities
Do not know
%
50
62
71
45
32
20
5 6 9
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
15 - 19 years 20 - 24 years 25 - 29 years
Regular
employment
Non-standard
Employment
Self-employment
Job opportunities linked to the internet Status in employment by age of young
workers
18
Source: KRI (2018)
Source: KRI (2018)
▪ Youth optimistic about internet and digital economy job opportunities
▪ Increasing freelance opportunities in the gig economy but work unstable and
insecure and with limited labour and social protection
▪ Informal own-account workers and contributing family workers have poor
earnings, low productivity and often difficult working conditions

19. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
7. Policy implications and options
To improve the status and protection of ‘non-standard’ workers
19
Establish portable social security benefits by linking
directly to the worker rather than an employer
Review labour legislation to improve status &
coverage of workers in informal, non-standard
employment
1
2
Provide support for youth in internet-related work
and the digital economy
Encourage young workers to organise for a
collective voice to more effectively dialogue with
employers, clients & the government & to improve access to
assets & supports
3
4

20. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
8. Youth are not ‘choosy’ about jobs
Notion that youth are selective about jobs is a myth
3
60
48
60
2
3
1
32
95
37
50
8
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Unskilled Skilled
manual
Low-skilled
non-manual
High-skilled
non-manual
Matching
qualifications
Under-educated
Over-educated
Young workers by skill group and
education
Important job characteristics for youth
Source: KRI (2018)
▪ Youth cannot be considered ‘choosy’ when most in unskilled and low-skilled jobs are
‘over-educated’; their current jobs are not related to their level or field of
education; and their actual jobs are not their preferred jobs
▪ High income ranks fourth in youth list of most important job characteristic 20
Source: KRI (2018)
0
5
10
15
20
25
30
Upper-secondary
youth
Tertiary
education youth
Job
seekers
Young
workers
Having work-life balance Steady job/job security
Interesting job to do High income
Job that uses skills and abilities Good promotion prospects/
clear career path
Others
High income
%

21. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
8. Policy implications and options
To correct the misperception that youth are ‘choosy’ about jobs
Strengthen the labour market information system
to better connect employers and young people
Improve career guidance and job search
counselling and review the relevance of current
psychometric tests
1
2
21
Attract and retain workers and talents by promoting
work-life balance and making job prospects
interesting, rather than just focusing on wages
3

22. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
9. Youth are not ‘asking for too much’
Notion that youth ask for ‘unrealistic’ wages is a myth
Mean of reservation and
actual wage (RM)
Mean of salary range offered by
employers for new hires (RM)
22
Source: KRI (2018) Source: KRI (2018)
1,555
1,577
1,471
1,387
1,669
1,598
1,514
1,641
1,715
2,435
1,846
1,961
1,486
1,621
2,378
1,550
1,319
3,190
0 1,000 2,000 3,000 4,000
Young workers
Regular full time
Temporary full time
Casual/on-call/daily paid
Own account
Contributing family worker
Part-time
Young employer
Job seekers
Tertiary students
Actual wage
Reservation wage
RM
1,024
1,270
1,703
1,628
1,529
2,066
2,682
2,809
0
500
1,000
1,500
2,000
2,500
3,000
School
leavers
TVET
graduates
Undergraduates Postgraduates
Minimum
Maximum
RM
▪ The SWTS data do not support the notion that young people have ‘unrealistic’
wage expectations and are ‘asking for too much’
▪ Many young people, particularly those in part-time and contributing family work, earn
below their reservation wage so as to have jobs

23. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
9. Policy implications and options
To address the issue of wages
Urgently conduct a review of wage levels and
differentials
Such a review could consider how the minimum wage is
being fixed in the country
1
2
23
The review could also consider the likely desirability of
establishing a living, fair and decent wage and not
just a minimum wage
3

24. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
10. Inequalities persist among youth
Even among the youth education and employment outcomes differ
1.35
1.66
0.0
0.4
0.8
1.2
1.6
2.0
Upper secondary Tertiary education
Gender Parity Index for upper secondary
and tertiary education youth
24
Source: KRI (2018)
Labour Force Participation Rate by
age group and sex, 2017
Source: DOS (2018-a, Table C1.2)
19
13
5 4
13
8
3 2
25
14
8
5
26
15
8 7
19
12
5 4
0
5
10
15
20
25
30
15 - 19 20 - 24 25 - 29 Overall
Bumiputera
Chinese
Indian
Others
Overall
%
Unemployment rate by age group and
ethnicity, 2017
▪ Girls outnumber and outperform boys but have lower labour force
participation and higher unemployment
▪ Ethnic and rural urban differentials persist; and those from poor family backgrounds
are disadvantaged in education and employment outcomes
Source: DOS (2018-a, Table A5.1)
2017 Male
2017
Female
0
10
20
30
40
50
60
70
80
90
100
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
%

25. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
10. Policy implications and options
To address inequalities among youth
Gender-sensitive Active Labour Market Policies can
effectively target disadvantaged or vulnerable groups
Preventive and integration strategies can target
those who are at risk of dropping out of school or face
problems integrating or re-integrating into the education
system or labour market
1
2
25

26. KhazanahResearchInstitute
Employers and their
demand for young workers

27. +THE SCHOOL-TO-WORK TRANSITION OF YOUNG MALAYSIANS
11. Employers play a limited role in enhancing youth
employability
It is not just education and training institutions that are responsible
Advice to education/training institutions
on skills requirements
27
Source: KRI (2018)
Training budget by size of enterprise
Source: KRI (2018)
▪ Almost three-quarters of all enterprises do not have training budgets
▪ Participation in employability training programmes is very low
▪ Employers have limited interaction with education/training
institutions, and with youth, except through work-based training
62
47
25
13 16
38
53
75
87 84
0
10
20
30
40
50
60
70
80
90
100
Large Medium Small Micro Overall
%
Yes
No
70
61
37
22 26
30
39
63
78 74
0
10
20
30
40
50
60
70
80
90
100
Large Medium Small Micro Overall
%
Have an
annual
training
budget
No annual
training
budget

28. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
11. Policy implications and options
To enhance the role of employers in promoting employability
Encourage employers’ organizations and chambers
of commerce to make the business case to their
members on why it is important to promote youth
employability
Strengthen the interactions between employers and
education and training institutions
Educate both sides, employers and youth, about each
other to address current misperceptions
Encourage and support youth entrepreneurship
1
2
3
4
28

29. +THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS
Summary
Youth Labour Supply vs. Demand
29
SUPPLY DEMAND
Youths in labour force recognise importance
of TVET, but participation is still low
Low take-up rate of STEM and Sciences
Youth are unaware of the importance of
entrepreneurship skills
Youth want expat & migrant jobs, except if
they are low-paying ‘3D’-type jobs
Youth cannot be considered ‘choosy’ as most
in unskilled/low-skilled jobs are ‘over-educated’
Increasing freelance opportunities in the
gig economy but work is unstable and insecure
with limited labour and social protection
Youths are not ‘asking for too much’; some
are earning below reservation wage as to have
jobs
Inequality in educational and employment
outcomes still persist
Malaysian education emphasize academic &
professional qualifications but employers are
looking for soft skills and work experience
Mismatch of channels for job search and
recruitment methods affects the smooth
functioning of the labour market
Employers think youth want high income,
while youth prioritise job security and work-life
balance as most important job characteristic
Employers have limited training budgets and
low participation in employability training
programmes
Employers have little interaction with
educational institutions or with youth,
except for work-based training

30. KhazanahResearchInstitute
Thank you
Lim Lin Lean
Junaidi Mansor
Mohd Amirul Rafiq
Nur Thuraya