The School-to-Work Transition of Young Malaysians Date: 12 December - - PowerPoint PPT Presentation

The School-to-Work Transition of Young Malaysians

Date: 12 December 2018 Venue: Mercu UEM, KL Sentral

Khazanah Research Institute

SWTS key findings

Khazanah Research Institute

Youth education and training for employability

+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

10 20 30 40 50 60 Soft skills Work experience Hard skills

%

+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 needs

5

+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 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

+THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS

• 2. Policy implications and options

To improve TVET

7

Overhaul the current TVET system to:

• ensure strategic coordination among large number of

training providers,

• prioritize demand-driven approach with close industry

involvement,

• establish reliable competency standards and

qualifications framework, and

• 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 context

3

+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

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 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…

%

+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

+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

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)

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

+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

Khazanah Research Institute

Their job search process

+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,

• pen interviews

Employability training course Answer advertisements Apply directly to employers Assistance of relatives/friends

Young workers Job 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

+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

+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 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

+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

Khazanah Research Institute

Their employment status and working conditions

+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

10 20 30 40 50 60 70 80 90 100

Upper- secondary youth Tertiary education youth Job seekers Young workers

More job

• pportunities

Less job

• pportunities

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

+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

+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)

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

%

+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

+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

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

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

+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

+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

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

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 %

+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

Khazanah Research Institute

Employers and their demand for young workers

+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

• n 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

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

10 20 30 40 50 60 70 80 90 100

Large Medium Small Micro Overall

%

Have an annual training budget No annual training budget

+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

• f 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

• ther to address current misperceptions

Encourage and support youth entrepreneurship

1 2 3 4

28

+THE SCHOOL TO WORK TRANSITION OF YOUNG MALAYSIANS

Summary

Youth Labour Supply vs. Demand

29

SUPPLY DEMAND

Youths in labour force recognise importance

• f 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

• utcomes 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

Khazanah Research Institute

Thank you

Lim Lin Lean Junaidi Mansor Mohd Amirul Rafiq Nur Thuraya