PETALING JAYA: Stronger integration between the education sector and industry is crucial to addressing graduate underemployment in Malaysia, says Malaysian Youth Council president Mohd Izzat Afifi Abdul Hamid.
He said support must go beyond generic employability programmes, focusing instead on systemic alignment.
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Mohd Izzat emphasised the importance of co-designing curricula with employers and incorporating mandatory industry exposure, apprenticeships, or project-based learning.
Targeted transition support is also needed to allow fresh graduates to improve their employment prospects.
“Structured graduate placement schemes, wage-sharing or hiring incentives for companies, and expanded career guidance even before graduation are crucial. The first 12 to 24 months after graduation often determine long-term career trajectories,” he said.
Mohd Izzat added that accessible, affordable, and industry-recognised upskilling pathways, micro-credentials, and reskilling support are especially important for B40 and M40 youths.
“It must also be noted that not all graduates will work strictly within their original fields. However, mismatches should be by choice, not necessity,” he said.
The call comes as the Department of Statistics Malaysia revealed that skill-related underemployment remains a challenge both locally and globally.
Underemployment refers to highly educated individuals taking jobs that do not utilise their skills, education, or qualifications.
According to the department’s Graduates Statistics 2024 report, released in November, the number of graduates employed below their qualifications increased by 3.9% to 1.6 million persons.
The report also highlighted that individuals aged 24 years and below recorded the highest rate of skill-related underemployment at 66.0% in 2024.
Another aspect of underemployment includes graduates working less than 30 hours a week due to insufficient work availability, despite being able and willing to work additional hours.
“In line with rapid economic development, the number of graduates in time-related underemployment rose by 17.6% year-on-year to 41,700 persons. Correspondingly, the graduate time-related underemployment rate edged up slightly to 0.8% from 0.7% in 2023,” the report stated.
Universiti Teknologi Mara’s Dr Mohamad Idham Md Razak described the figures as concerning, highlighting a structural problem in the labour market.
“There is a misalignment between graduate skills and industry needs, particularly in applied, digital, and problem-solving competencies. On the demand side, Malaysia’s economy remains dominated by mid- to low-skill jobs, with slower expansion of knowledge-intensive sectors,” he said.
Mohamad Idham added that addressing underemployment requires closer industry-academic alignment, stronger work-based learning and internships, and policies that encourage firms to move up the value chain to create graduate-level roles.
He warned that persistent graduate underemployment could suppress productivity growth, weaken innovation capacity, and limit income and social mobility among young workers.
“Ultimately, this can undermine Malaysia’s ambition to transition into a high-income, innovation-driven economy,” said Mohamad Idham, who is a senior lecturer at the Puncak Alam campus’ Department of Economics and Financial Studies.
