Automation threat to workers in sales, services

KRI chairman Tan Sri Nor Mohamed Yakcop noted that the unemployment rate in the country had rose to 5% in April and 5.3% in May 2020 (estimated 770,000 people jobless).

KUALA LUMPUR: Malaysia’s most common occupations, the sales and services workforce, face higher automation risk in light of technological advancement, according to a Khazanah Research Institute (KRI) report.

The report, entitled Work in an Evolving Malaysia: The State of Households 2020 Part II, said this was worrying as sales and services provided 22.6% of total employment in 2019.

Also, in KRI’s School-to-Work Transition Survey (SWTS) database, 48.7% of the surveyed full-time young employed persons aged 15 to 29 held jobs with high risk of automation.

Occupants of jobs at higher risk of automation tend to earn lower incomes (average monthly income of RM1,500) and are more likely to be non-graduates (only 7% with bachelor’s degree of more).

This implies that low income jobs that do not require high levels of education are more likely to be susceptible to automation.

The report also highlighted that most jobs with higher automation risk are also found to be least likely to be able to work from home, making the workers more vulnerable under the on-going pandemic situation.

Yet, unavoidable lags in modern technological adoption provide opportunities for policy intervention to ensure that workers can benefit and complement technology, rather than being displaced, the report says.

Conversely, jobs such as health and teaching professionals are less likely to be replaced by technology.


While skilled occupations still face risk of automation, semi-skilled occupations are more liable of being automated.

The report also noted that earnings from paid employment continued to be the largest source of household income, although its share had steadily declined from 66.6% to 61.6% between 2012 and 2019.

Meanwhile, the share of household income from self-employment remained flat at around 17% during the same period, despite the rising number of self-employed workers in recent years.

In 2019, close to 80% of household income was from paid and self-employment earnings.

Another key takeaway from the report was the central region (Kuala Lumpur, Selangor and Putrajaya) continue to chart higher labour force participation rates, especially among women, and lower unemployment rates than other states.

The central region’s concentration of better-pay economic activities, skilled and educated workers explains their higher wages and higher household income levels compared with other states or regions.

Meanwhile, the demand for skilled workers may be dampened by the slowdown in the accumulation of tangible capital in recent years, as well as the lack of intangible capital investment such as research and development activities.

KRI chairman Tan Sri Nor Mohamed Yakcop noted that the unemployment rate in the country had rose to 5% in April and 5.3% in May 2020 (estimated 770,000 people jobless).

“This far exceeded the average unemployment rate of 3% to 4% previously.

“Although this fell to 4.7% in August 2020, the unemployment statistics can mask the real labour market because some workers are forced to accept part-time work although they desire full-time jobs.

“Also, those who were self-employed have also lost their source of income, ” he said in his speech before the online presentation of the KRI report to the media yesterday.

Nor Mohamed also pointed out that the labour force participation rate of women was also lower (55%) compared with men (88%). To address this, he suggested flexible work arrangements, more involvement of husbands in childcare and removing policies that hinder the participation of women in the workforce.

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