PICTURE graduating after years of lectures, exams and assignments, only to find yourself working in a job that requires none of the skills you spent years acquiring. This is the precise reality for a growing number of young Malaysians who are just entering today’s labour market.
Yet, headline statistics can obscure deeper labour market challenges.
For many young Malaysians, the problem is not unemployment so much as underemployment. Increasingly, graduates find themselves in semi- or low-skilled jobs that have little connection to their degrees.
According to the Department of Statistics Malaysia, nearly 1.96 million workers were in skill-related underemployment in the fourth quarter of 2025, up from 1.46 million in early 2019. While these workers are technically employed, their skills and education are not being fully utilised.
Research suggests the issue begins almost immediately after graduation. Analysis by the Khazanah Research Institute, drawing on data from the Higher Education Ministry’s Graduate Tracer Study, estimates that roughly one in three fresh graduates start their careers in jobs that do not align with their qualifications or field of study.
It would be tempting, perhaps self-comforting, to perceive this as an individual career setback, but its implications extend far beyond the early years of employment.
Graduates who begin their careers in roles far below their qualifications often struggle to transition into higher-skilled positions later on. Skills that are not applied can deteriorate over time, while employers may become hesitant to hire candidates whose experience appears disconnected from their academic training. This perpetuates a cycle where graduates remain trapped in lower- skilled roles which limits their career mobility.
At a national level, widespread underemployment represents a significant underutilisation of human capital. Years of investment in education by both families and the state fail to translate into productivity gains for the economy, culminating in slower innovation and reduced competitiveness as our workforce are unable to apply their training meaningfully.
Several structural factors contribute to this mismatch. Among them, the rapid expansion of higher education over the past two decades has seen increased access to tertiary education, producing hundreds of thousands of graduates each year. However, the creation of high-skilled jobs has not kept pace with this expansion, leaving many graduates competing for a limited pool of professional roles.
At the same time, technological change is reshaping industries faster than many educational institutions can adapt. Employers increasingly seek workers with digital capabilities, problem-solving ability and practical experience. Yet many graduates leave university with strong theoretical knowledge but limited exposure to real-world applications.
Economic structure also plays a role. Much of Malaysia’s economy continues to rely on labour-intensive sectors that generate relatively fewer high-skilled opportunities. Statistics show that only about two out of every 10 high-skilled jobs in the country are held by young workers, reflecting how difficult it can be for new entrants to secure positions in professional sectors.
For some young Malaysians, the response has been to look beyond traditional career pathways. Many graduates have found comfort within areas of work opened up by digital platforms such as content creation, e-commerce management and digital marketing. For some, these roles offer flexibility and the possibility of higher short-term earnings compared with entry-level corporate salaries.
But the rise of gig work also raises questions about long-term stability, social protection, and career progression. While such opportunities may provide immediate income, they do not always offer the structured training and advancement pathways traditionally associated with professional careers.
Others opt for a different route altogether by choosing to seek opportunities abroad.
Malaysia has long grappled with the issue of brain drain, and underemployment risks accelerating this trend. An estimated 5.5% of Malaysians currently work overseas, a figure higher than the global average of around 3.3%.
Even when the jobs taken abroad fall below their qualifications, the economic incentives can be difficult to ignore. For some young Malaysians, the prospect of earning more after currency conversion outweighs the desire to pursue a career aligned with their field of study at home.
Ultimately, the challenge of youth underemployment highlights a deeper question about the relationship between education and the labour market.
For decades, higher education has been promoted as the most reliable pathway to upward mobility. However, confidence in that promise begins to erode when graduates struggle to translate their qualifications into meaningful careers.
Addressing this issue will require closer coordination among universities, industries and policymakers. Curricula must evolve alongside technological change, while employers should play a greater role in shaping training pathways that reflect real labour market needs. At the same time, economic policy must prioritise the creation of higher-value industries capable of generating skilled employment.
Malaysia has made remarkable progress in expanding access to education. The next challenge is ensuring that the opportunities awaiting graduates are worthy of the aspirations that education was meant to fulfil.
Malaysian youth advocate Jonathan Lee Rong Sheng traces his writing roots to The Star’s BRATs programme. The views expressed here are solely the writer’s own.
