Skills mismatch or graduate oversupply?
I WAS fortunate to attend the Quacquarelli Symonds (QS) Higher Ed Summit: Asia Pacific 2023 in Kuala Lumpur last month.

QS is the company behind the QS World University Rankings often used in university league tables.

Graduate employability, a much-debated issue here in Malaysia, was a recurring theme across several of the sessions that I attended.

There seems to be an ongoing narrative, not only in Malaysia but also in other countries such as the United Kingdom and United States, that a mismatch exists between what industry needs in terms of talent and what universities are delivering as a graduate workforce.

While there may be elements of substance in this narrative, it should not be generalised as a sweeping truth, nor taken as a sign that the higher education system is somehow “broken” and needs to be fixed.

If that really was the case, we would not expect graduate employability in Malaysia to be as high as 90.2% last year, as shared by former Higher Education Minister Datuk Seri Mohamed Khaled Nordin in news reports.

At my own institution, many final year students are offered excellent jobs even before they graduate, not only in Malaysia but increasingly in Singapore.

Although what is counted as being employed may be a point of further debate, the 90.2% suggests that, overall, universities are doing a reasonable job of producing graduates that find employment.

Of course, the picture is not as rosy and there are many other factors at play. According to the Statistics Department, Malaysia recorded a total of 5.92 million graduates in 2022, of which 53.9% were degree holders. However, Social Security Organisation (Sosco) noted that some 40% of graduates are underemployed in semi-skilled or low-skilled jobs.

One might argue that this is a function of graduate oversupply, namely, the university sector churning out too many graduates to fill a limited number of graduate-level positions. A similar but more acute problem has recently surfaced in China, where the mushrooming of the university sector has outpaced available graduate jobs due to a slowing economy, resulting in high levels of graduate unemployment.

According to Higher Education Ministry statistics, public and private institutions in the country produced 147,247 degree graduates in 2022, which begs the question of whether industry has an equivalent number of graduate-level positions available to fully absorb these graduates.

Furthermore, as student fees are the main source of income, varsities are motivated to expand student enrolment to financially sustain themselves. It is also not unusual for public universities to have private arms as a strategy for expanding enrolment.

The second important consideration is that graduate employability varies across disciplines and sectors. It’s no surprise that graduates in accounting and computing are in high demand, with the most capable graduates readily snapped up by employers who are prepared to pay a salary premium and offer attractive working conditions.

In the past few years, data scientists have also been in demand, and it is evident more universities are including data science in their programme offerings and curriculum.

However, universities may be unable to produce sufficient graduates quick enough to meet the demand. This is where lifelong learning, training and microcredentials play a role.

On the other hand, the chronic shortage of teachers and nurses in Malaysia has also been highlighted in the media, and the undersupply may be due to a lack of interest in pursuing such careers due to low pay, the challenging work environment and other factors that make the profession less attractive.

Individual sectors therefore have their own supply-demand dynamic for talent, with oversupply in some sectors and undersupply in others. In an ideal world, supply and demand are balanced.

From the employer’s perspective, graduates who are most valued are those who can hit the ground running and make a positive contribution from day one. Employers will always want more of such graduates to ease the burden of talent recruitment.

Fortunately, there are tried-and-tested models in place for achieving this based on curriculum alignment and professional placements. For example, a five-year medical degree in Malaysia typically involves two to three years of clinical training in a medical setting, followed by a two-year housemanship after graduation. My own institution has a four-year accounting and finance degree where the third year is spent in industry.

Clearly, the more immersion a student has in a real work setting, the more likely they are to be “work-ready”. The issue is about scaling up the number of academic programmes adopting these models.

In some professions, it is a requirement for degrees to be recognised by a professional body, such as in the case of medicine, pharmacy, law, accounting and surveying.

To conclude, the job market acts like any other market based on supply and demand. Top talents will be attracted to top-tier employers willing to pay a salary premium, including those located outside of Malaysia.

Less capable talent will need to compete for the remaining available jobs or join the gig economy where the pay may be comparable or even more favourable. The more graduates there are, the tougher the competition for jobs.

Of course, universities can and should make every effort to enhance the employability of their graduates, and it is in their own interests and reputation to do so. Universities can also do more to review and refresh their programme portfolios and seek to address supply-demand imbalances which present themselves as opportunities.

However, to assume there is a structural mismatch in skills between universities and industry does not do justice to the excellent work many universities do to prepare graduates for their future.

Prof Wing Lam is the provost and chief executive officer at University of Reading Malaysia, an international branch campus of University of Reading, United Kingdom. He has held a variety of academic positions in Malaysia, Singapore and the UK. Prof Wing completed his PhD in computer science at King’s College London in 1994. He has published over 80 peer-reviewed articles and journals. His current areas of research interest include technology and innovation. The views expressed here are the writer’s own.
Quacquarelli Symonds (QS),Reading University Malaysia,unemployment,jobless,fresh graduates
I WAS fortunate to attend the Quacquarelli Symonds (QS) Higher Ed Summit: Asia Pacific 2023 in Kuala Lumpur last month.