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Thought-Provoking: A Crisis of Overqualification Among Graduates in Malaysia

Key Takeaways: 

  • In an urbanized term, the reality of graduate overqualification could be coined as settling for less.
  • According to a report by the Khazanah Research Institute, graduates in 2021 are projected to earn less than RM2,000 despite holding tertiary education certificates. 
  • Overcoming challenges is intrinsic to societal progress, and collectively striving towards enhancing Malaysia’s human capital is paramount.

Saloma Link (2022)
Image by Al Kaff Zamsari

Malaysia is recognised as a nation committed to cultivating progressive human capital, aiming for societal advancement. Situated in Asia, Malaysia has gained global recognition for notable accomplishments and its harmonious multiculturalism. Preeminence in developing human capital is central to the nation’s aspirations, with leaders frequently engaging in dialogues to enhance societal well-being. In 2023, V. Sivakumar emphasized that the path to national greatness hinges on dynamic human capital. In this context, human capital refers to the collective qualities possessed by individuals and society, directly contributing to the nation’s value through knowledge, cognitive abilities, and health.

Presently, a pressing concern within the realm of human capital lies in the workforce, where the phenomenon of overqualified undergraduate students has reached a critical juncture. On the surface, it seems that Malaysia is grappling with stagnation in the enhancement of job opportunities and quality, serving as a primary driver behind the surplus of overqualified undergraduates. This crisis underscores a troubling mismatch between the skills acquired through higher education and the requirements of the job market. A report from the Khazanah Research Institute shed light on the pervasiveness and seriousness of this issue, revealing a systemic overqualification among Malaysian graduates, resulting in many individuals occupying positions that do not fully employ their qualifications or expertise.

This piece aims to provide deeper insights into the education and employment landscape that is happening right within our midst.

The Fidelity of Graduate Overqualification in Malaysia

In an urbanized term, the reality of graduate overqualification could be coined as settling for less. By settling for less, these graduates are underutilized to ensure that their necessities are sufficient enough back at home. The prevalence of job opportunities that do not align with their formal education has become increasingly common, jeopardizing their ability to sustain a livelihood despite their academic achievements. This mismatch isn’t a temporary setback but rather a persistent challenge that many continue to grapple with long into their careers. The consequences of this systemic overqualification are twofold, impacting both individual career paths and the larger economic environment.

Economically, the overqualification crisis signifies the underutilization of human capital, a critical asset in the knowledge-driven economy. When talents are not employed to their maximum potential, the economy suffers from lost productivity and innovation opportunities. For individuals, overqualification often translates to lower wages, diminished job satisfaction, and stalled career progression. This disparity between qualifications and employment roles not only undermines the value of higher education but also dampens the motivation of future generations to pursue tertiary education. But don’t you think that in a world where knowledge is power, having a surplus of educated individuals should be seen as an asset rather than a liability?

Vinay Singh's Quote (2023)
Image by Al Kaff Zamsari

School, Job, and Economy

The disparity of disconnection between education and market demand is the underlying factor of overqualification among graduates. The elevated degree of societal demand for education suggests that there is a discrepancy between the available talents and the market. The continuous production of talented graduates through tertiary education has contributed to the issue of overqualification, resulting in proposed solutions that could improve the stagnancy of the market demand. The rapid advancement of technology would create abundant job opportunities, but overlooking the importance of the players in the industry would be the real issue that Malaysia needs to address. 

To be able to acknowledge the disarticulation between higher education and market demand is what employers or key employers should focus on. On one side, the curriculum and training provided by tertiary institutions may not align with the evolving needs of industries, especially in an era marked by rapid technological advancement and digital transformation. From another perspective, the Malaysian economy’s structural issues, including a reliance on low-skilled labor and inadequate investment in research and development, hinder the creation of high-skilled jobs that could absorb the growing pool of educated talents. Moreover, the fast-paced nature of technological advancements further widens this gap, leaving graduates without the latest technical competencies required by employers. Soft skills, such as communication and problem-solving abilities, also play a crucial role, yet their development may not receive sufficient emphasis within educational curricula. 

According to a report by the Khazanah Research Institute, graduates in 2021 are projected to earn less than RM2,000 despite holding tertiary education certificates. This stark reality underscores the issue of wage stagnation, which persists as a significant concern in Malaysia despite the country’s economic growth and progress. As living costs continue to rise, stagnant wages make it increasingly challenging for workers to meet expenses, save for the future, or pursue further education and skill development. Furthermore, it exacerbates income inequality which widens the gap between high earners and the average worker. Without meaningful wage increases, consumer spending – a crucial driver of economic growth – may suffer, potentially hindering Malaysia’s overall economic prosperity. While inflation may influence employers to be selective in determining minimum wages, there is an opportunity for employers to initiate positive change, leading to broader and more lasting improvements.

Malaysia’s Brain Drain

The prevailing realities in Malaysia have given rise to a significant phenomenon known as ‘Brain Drain’, where talented individuals migrate or seek employment opportunities in other countries. These individuals are presented with opportunities to enhance their quality of life and pursue career advancement. Their departure is not merely a self-serving decision but rather a strategic one aimed at securing better prospects for themselves and contributing positively to their immediate communities. Having invested five years in tertiary education, individuals aspire to apply the practical knowledge gained during this time to their professional endeavors.

Brain Drain is symptomatic of the political instability prevailing in the country, as individuals seek the safety and security that they perceive to be lacking in the government’s governance. Rather than waiting for incremental progress, individuals must take proactive steps to improve their lives, seeking greater transparency and stability.

Addressing Brain Drain necessitates the implementation of policies aimed at retaining and attracting skilled professionals in Malaysia. This entails creating better career opportunities, fostering a conducive business environment, investing in education and research, and addressing the socio-political concerns driving emigration. Additionally, initiatives to promote inclusivity, diversity, and talent development within Malaysia are essential to retain skilled individuals and incentivize those who have left to return.

Martin Luther King, Jr's Quote
Image by Al Kaff Zamsari

Bridging The Gap

A graphical depiction of the divide between academic preparation and industrial requirements in Malaysia, featuring two contrasting environments. The left side displays a traditional educational setting with engaged students and a focus on theoretical learning. The right side shows an unoccupied, modern workplace equipped with the latest technology, suggesting a lack of skilled professionals to fill these roles. The gap between these two scenes underscores the mismatch between the education system and the labor market's requirements, with Malaysian cultural symbols subtly included.
Photo by Dall-E

Efforts to address these issues should involve collaborative endeavors among educational institutions, the government, and the private sector. Overcoming challenges is intrinsic to societal progress, and collectively striving towards enhancing Malaysia’s human capital is paramount. The strategies outlined below are crucial in closing the disparity between the outcomes of higher education and the needs of the job market:

Curriculum Reformation:

Educational institutions should constantly review and update their curricula to ensure alignment with current and future industry demands. Incorporating practical skills, digital literacy, and critical thinking into the curriculum can enhance graduates’ employability.

Industry-Academia Collaboration:

Enhancing the partnership between universities and industries can result in the development of more pertinent educational initiatives. This could encompass internship programs, industry-funded projects, and guest lectures delivered by professionals from the field. Such collaborations not only offer students valuable practical experience but also enable industries to mold a workforce that aligns with their specific requirements.

Enhanced Career Guidance:

Educational institutions ought to provide comprehensive career guidance services to assist students in making informed choices regarding their academic majors and career trajectories. This support should encompass information on market demand, prospective career opportunities, and the essential skills needed for different professions.

Government Policies and Incentives:

The government’s involvement is pivotal in fostering the establishment of high-skilled employment opportunities. This entails implementing policies and incentives aimed at encouraging growth in sectors with significant potential, such as technology, green energy, and creative industries. Furthermore, initiatives that support research and development (R&D) can fuel innovation and generate a demand for highly skilled workers.

Lifelong Learning and Upskilling:

Encouraging a culture of continuous learning and facilitating access to opportunities for upskilling are essential for graduates to stay abreast of evolving job market demands. Both the government and private sector can contribute to this endeavor by providing subsidies or tax incentives to support professional development courses and certifications.

Addressing Structural Economic Issues:

Long-term solutions should prioritize tackling the underlying structural challenges within the Malaysian economy that exacerbate the overqualification crisis. This involves diversifying the economy, improving productivity, and advancing along the value chain to foster the creation of additional high-skilled employment opportunities.

Thoughts Provoked?

An angry guy slamming the table and shouting
Photo by Andrea Piacquadio

Malaysia’s overqualification crisis among graduates presents a complex and multifaceted challenge that demands a collaborative, multi-stakeholder approach to resolution. In order to close the gap between the outputs of the education system and the evolving needs of the labor market, educational institutions, the government, and the private sector must work together closely to implement comprehensive strategies that not only address the current mismatch but also anticipate and adapt to future labor market trends.

As Malaysia endeavors to transition into a high-income, knowledge-based economy, tackling the overqualification crisis is not merely a choice but an imperative. The future competitiveness and economic vitality of the nation’s workforce hinges on our collective ability to effectively navigate and resolve this crisis. Through coordinated efforts and strategic interventions, Malaysia has the opportunity to transform this challenge into a catalyst for building a more resilient, innovative, and globally competitive economy that benefits all stakeholders.

On a last note, education and career opportunities must go hand in hand to pave the way for a brighter future for our nation. Neglecting this linkage means overlooking the broader perspective of enhancing the quality of life for Malaysians, which directly impacts our human capital and economy. By delving into research to gain a deeper understanding of this crisis, this discourse sheds light on the urgency of addressing the challenges faced by graduates. We owe it to our people and society to strive for improvement, which would ultimately benefit our country as a whole.

How DPI Media plays a role in this matter?

Des Prix Infinitus Media (DPI Media) provides a platform that significantly enhances visibility through our extensive network.

With a focus on the critical areas of education and career development, our aim is to foster job opportunities and build meaningful connections. We are committed to ensuring equitable media exposure, beginning in Malaysia with ambitions to expand across Southeast Asia. Our mission is to foster interactive business ideas and stimulate insightful dialogue for societal advancement.

Serving as intermediaries, we are dedicated to showcasing the excellence of Malaysian entrepreneurs and businesses, thereby contributing to a positive movement for societal improvement.

For inquiries about collaboration, please contact us (+603-5870 3168) to find out more.

Frequently Asked Questions (FAQs)

What is graduate overqualification?

Graduate overqualification occurs when individuals possess educational qualifications that exceed the requirements of their job role. It signifies a mismatch where the level of education, skills, or experience of the employee is higher than necessary for their current position. This situation often leads to the suboptimal of skills and knowledge in the workforce.

Why is graduate overqualification a problem in Malaysia?

In Malaysia, graduate overqualification is a pressing issue due to its implications for both the economy and individuals. It leads to underemployment, where highly educated individuals are not working in high-skilled jobs that match their qualifications, resulting in wage stagnation, job dissatisfaction, and inefficient utilization of human capital. This underutilization contributes to lower overall productivity and hampers economic growth, as the skills developed through higher education are not fully exploited.

Which fields of study are most affected by overqualification?

Industries such as Agriculture & Veterinary, Services & Others, Education, and Health & Welfare are significantly impacted by overqualification in Malaysia. Despite the expansion of these sectors, the quantity of high-skilled positions has not matched the supply of qualified graduates, resulting in a greater prevalence of overqualified professionals within these fields. This mismatch is particularly evident when there is a disconnect between the outputs of the education system and the requirements of the job market.

How does overqualification affect the economy and individuals?

In terms of the economy, overqualification results in a less-than-ideal distribution of labor resources, diminishing productivity and innovation potential. This disparity signals a disconnect between education investment and its economic returns, ultimately impacting both economic growth and competitiveness. On an individual level, overqualification frequently translates to lower wages compared to positions that align with one’s qualifications, leading to financial challenges and diminished lifetime earnings. Additionally, it often leads to heightened job dissatisfaction, decreased motivation, and potential erosion of professional identity, thereby impacting mental well-being and limiting opportunities for career advancement.