Socio-Economic Research Centre executive director Lee Heng Guie.
PETALING JAYA: The latest employment data points to a critical issue that the authorities must pay more attention to – the lack of high-skilled jobs.
Despite the influx of investments into Malaysia, the creation of skilled jobs continue to lag behind new semi-skilled employment opportunities.
Of the 31,860 new jobs created in the second quarter of 2024 (2Q24), about 62.9% of them are semi-skilled, while only 26.7% are skilled jobs.
New skilled jobs created in 2Q24 contracted by 7.3% year-on-year (y-o-y), while new semi-skilled and low-skilled jobs increased by 2.2% and 13.3%, respectively.
The creation of skilled jobs is highly critical, considering that Malaysia struggles to exit the middle-income trap and graduates suffer from the skill-related underemployment issue in the country.
The Statistics Department reported that in 2023, 2.03 million persons in Malaysia were affected by skill-related underemployment. This represented 36.3% of employees with tertiary education.
Skill-related underemployment refers to those with tertiary education but end up working in semi-skilled and low-skilled jobs.
Based on the Statistics Department’s report yesterday, the semi-skilled category was the largest contributor of jobs in 2Q24 at 62.5% or 5.6 million jobs.
In comparison with 2Q23, total semi-skilled jobs – filled and vacant jobs – increased by 1.7% y-o-y.
Overall skilled jobs also increased by 1.7% y-o-y to 2.24 million, representing 25.1% of total jobs.
Low-skilled jobs marginally declined by 0.1% y-o-y in 2Q24 to 1.11 million.
Socio-Economic Research Centre executive director Lee Heng Guie told StarBiz that Malaysia needs at least 45% of high-skilled workers to support the industries’ transition into high value-add and technology-driven production.
“There is a time lag for the realisation of high value, high growth industries and investment to create high skill jobs, especially in the technology sector.
“Both the government and private sectors have to work in ensuring a continuous supply of talent, but also talent retention and reduce the brain drain.”
Lee pointed out that the government has set aside RM2.56bil in 2024 for skills training initiatives, encompassing diverse fields such as artificial intelligence, robotics, green economy skills and 5G technology.
To address the lack of skilled jobs, the economist called for a transformational shift in economic structure.
This would entail a greater focus on sectors that are experiencing high growth and have high-skilled labour demand like technology, green energy and advanced manufacturing.
“The government can also consider tax cuts or rebates for employers who are able to prove the inclusion of future-talent-need practices,” he said.
Meanwhile, Centre for Market Education (CME) chief executive officer Carmelo Ferlito said a predominance of semi-skilled jobs is “normal” for the economic structure of Malaysia.
“Skilled jobs are 44% in the European Union, so I would not be concerned with the 27% in Malaysia, which is a country still with a manufacturing and agriculture base.
“I would like to clarify also that the government does not create jobs and the government does not create a high-income nation.
“The government can, at best, create the right conditions for entrepreneurship to flourish,” he said.
Ferlito, however, called for a “serious look” at some stagnation trends in the domestic job market.
This included an increase in the loss of employment benefit applications.
In an earlier CME report, it was noted that the Social Security Organisation recorded 49,982 applications by end-2023.
This represented a 45.35% increase when compared with 34,388 applications filed in 2022.
“The situation is deteriorating further in 2024.
“In the first five months of the year, 22,315 applications were filed, against 18,026 in the same period of 2023 (an increase of 23.79%).”
Despite some of the challenges in the labour market, Malaysia has created a record number of jobs in 2Q24.
Chief Statistician Datuk Seri Mohd Uzir Mahidin said the number of jobs grew 1.5% y-o-y in 2Q24 to a total of 8.96 million.
Quarter-on-quarter, the growth was marginal at 0.2%.
He further said the growth in the number of jobs is aligned with the unemployment rate holding steady at 3.3% in 2Q24.
“The trend is foreseen to remain stable until the end of this year, subsequent to a strong domestic economy and recovering external trade.
“Looking ahead, an increase in the export performance is anticipated, along with potential investments coming into the country that will create more jobs.”
In 2Q24, the rate of filled jobs rose to 97.9% or 8.77 million filled jobs.
At the same time, the vacancy rate fell slightly to 2.1%, amounting to 191,400 vacancies.
