Grads earn more now but skills mismatch still high, survey finds

PETALING JAYA: While degree and diploma holders are better paid now, more than one-third are stuck in mismatched jobs, says the Khazanah Research Institute (KRI).

"In terms of starting pay, degree holders earning RM2,000 and below decreased from 63.3% in 2010 to 43.2% in 2022.

"A similar downward trend is also observed for diploma holders, with those earning RM2,000 and below dropping from 93.7% to 78% during the same period," KRI said in a statement on Monday (March 4).

ALSO READ: Skills mismatch or graduate oversupply?

However, the report noted that over one-third of Malaysia’s local graduates who start in mismatched jobs tend to remain in that predicament over time.

“Since starting a career on the wrong foot could have enduring effects on future career trajectory, 'last-mile' active labour market initiatives are important (in) the education-to-work transition.

"This could overcome the underutilisation of skilled talents in driving the nation’s development and maximise the return to higher education,” said the report's lead author, Hawati Abdul Hamid.

The "Shifting Tides: Charting Career Progression of Malaysia's Skilled Talents" report was based on a survey tracking the career progression of Malaysian graduates.

The survey also found that although graduates with more working experience under their belts fared better than younger graduates, low pay remains prevalent.

ALSO READ: Urgent need to reduce mismatch

"The survey shows that additional years of working have led to... advantageous improvements among experienced graduates, with the older cohort generally (having) better outcomes than (the) younger.

"Nonetheless, amid the growing supply of tertiary-educated talents and an increasingly competitive job market, skill-related underemployment and low pay remain prevalent for around 40% of experienced graduates regardless of... years (of working experience)," the report stated.

Meanwhile, the Higher Education Ministry's graduate tracer study revealed that about 60% of graduates were employed in high-skilled occupations throughout the past decade.

"Similarly, around 59% of graduates worked in fields related to their study courses in the last five years.

ALSO READ: Job mismatches and the reality of finding work

"Even with increased government efforts and improved job matching efficiency in the labour market, weak linkages between supply and demand of graduate-level jobs contribute to the high incidence of skill-related underemployment and wage stagnation among Malaysian skilled talents," the report added.

KRI noted that there is a pressing need to address these issues to ensure Malaysia remains on track to become a high-income nation.

The institute added that cooperation is needed among educational institutions, industry and the government for better employment outcomes for graduates.