Articles   •   May, 2017

Globally, youth unemployment remains a concern with youth unemployment rates surpassing national unemployment rates. In the ASEAN region, the trend is similar and Malaysia is no different. While Malaysia’s youth unemployment and national unemployment is not as high as that in Europe or elsewhere in the region, it is still a major concern for the future development of our nation. Youth unemployment in Malaysia is three times higher than the national unemployment rate, and of more concern is that 15.3% of those with tertiary education are unemployed. The problem with unemployment is not confined to just being without work and income, but it is also about the ability of young people to find meaningful employment.

Unemployment not by choice

In urban areas, youths with stronger family financial support may not be in a rush to find employment and may take longer to find a job that they find meaningful. On the other hand, those less privileged especially from rural area, are impacted more than their peers by the economy and are more likely to be unemployed not by choice. Economic developments need to extend out to sub-urban or rural areas as well to balance the economic growth of the country. The availability of job opportunities is crucial for youths to remain in less urban areas and still be gainfully employed. Jobs need to be created not just in urban areas, but also in places where there is economic potential.

Some young people resort to temporary employment or become under-employed (i.e. being over qualified for the job) or to work in jobs that are unrelated to their qualification, with the hope that the temporary employment may serve as a “stepping stone” to more stable and better-paid jobs. However, there is limited evidence according to OECD, that this type of temporary employment will improve young people’s chances of transitioning to better permanent jobs. With public sector jobs becoming lesser and harder to come by as the government seeks to control the size of the civil workforce, youths are forced to compete for even more limited and competitive private sector jobs.

Create jobs and make it attractive to locals, not foreigners

Malaysia need to shake itself off its dependency on foreign workers but our local youths will not be attracted to work, especially 3D (dangerous, dirty and difficult) jobs, if the working conditions are not improved and society not adequately informed or educated about the potential career prospects of skilled employment. Youths need to be well informed and attracted to skilled work while employers need to improve working conditions to help improve the perception of skilled work.

Our economic market need to move away from the lower or mid-skilled industries which depend heavily on being cost efficient such a cheap labour. As emerging ASEAN countries such as Myanmar are opening up and becoming more competitive, it will be more challenging for Malaysia to sustain its economic growth if it is to remain in lower value-added economic activities.

Everyone has a role to play

To address youth unemployment, a single solution is insufficient. It is a systemic issue that requires a concerted effort. Employers, education institutions and the government through policies need to work closely together to better match youths to available jobs while creating an environment in which businesses can thrive so that jobs can be created. Educational institutions need to be in sync with market needs and engage potential employers early on to work out placement channels to enable young people to gain the experience and skills that industry requires. Of course, employers will need to reciprocate by re-looking at their workforce composition and make suitable positions open to these young people for placements.

Young people should also consider other venues of employment rather the solely looking toward traditional employment opportunities. In other words, if you have an idea or interest, think and innovate, create your own employment by having an entrepreneurial spirit to create and do something that you are interested in and that can benefit others.

Young people need to be mentored, nurtured and/or taught how to start out on their own with whatever little funds they have and generate funds rather than solely being dependent on grants. Considering that people are now generally living longer past retirement age, retired business or corporate figures can come together and offer their insights and advise to young people who are starting out on their own. Being young and inexperienced, these young entrepreneurs will benefit and gain a lot from the guidance and mentorship from these retired and experienced business or corporate figures.

And not forgetting, work ethics and attitude. Some foreign workers are disciplined and work hard no doubt, and Malaysian youths need to step up and fill in those shoes with the right skills and attitude. Businesses can only reduce our dependency on foreign labour when our own young people are willing to take up those jobs with the right attitude. We risk slowing our nation’s economic growth potential and risk becoming an unsustainable high-income nation. While Malaysia has made good progress over the years in this effort, more a concerted effort is required to ensure real productivity and efficiency gains, not just on paper alone.

About the Author(s):

Carmen Lee is the Head of the Education Sector at Evant & Co., a management consulting firm with offices in Kuala Lumpur and Jakarta. Our purpose is to help our people and our clients to realise their aspirations while improving lives through business. We advise leaders on strategy, human capital, digital, and outsourcing.