Survey: Overqualified M’sian Fresh Grads Will Work for Less Pay in Low-Skilled Sector

The latest research done by Khazanah Research Institute (KRI) on the employment market for youths entitled the school-to-work transition survey (SWTS) was just released today (Dec 12) with surprising results. The survey said that young Malaysians were experiencing difficulties transitioning from school to work as they could not find jobs. The study was done in late 2017 until early 2018 targeting youths aged between the ages of 15 and 29.

Based on the survey, here are some of the key findings:

1. Fresh grads are willing to work for low salaries

Source: nst

The insights gathered from the survey showed that the lowest pay that the fresh grads would accept for a particular type of job starts from as little as RM1,550 a month. First-time job-seekers had higher expectations in the beginning but as they got more experienced, they lowered their salary expectations.

“What is interesting is the low reservation wage of those who are currently employed. The main reasons for this group to seek another job are to have better prospects or higher pay, yet the minimum salary they would accept for a job is on average RM1,550 per month and the modal salary is only RM1,000 a month,” the survey said.

Yet, a survey by Jobstreet said that fresh graduates are asking for salaries from RM2,400 to RM3,000. This has led to the misconception that fresh grads are picky, Malay Mail reports. Perhaps they are just asking for more and waiting for employers to negotiate with them? 

Source: scmp

KRI said that Bachelor degree holders had lower than expected salary expectations, at RM1,900 and those with higher qualifications were asking for RM2,000. Meanwhile, postgraduates only had a median salary expectation of an average of RM2,200.

This has led to a mismatch in supply and demand, with industries holding out for cheap labour and too many graduates that do not qualify for the jobs that are already in the market. Due to this, about 85% of workers with tertiary qualifications take up low-skilled or manual jobs.

2. More Malaysian youths are forced into informal, precarious jobs

Source: the phil star

The survey also found that a growing number of young people are taking up jobs which offer them less security and legal protection or embracing the “gig economy” where the job is unstable or insecure. Based on the research, 32% of youths aged 20 to 24 already work in the informal sector while 20% of those aged 25 to 29 are already employed informally.

3. 95% of fresh grads are overqualified for their current jobs

Source: new zealand now

KRI said that 95% of young graduates have higher qualifications than needed for their jobs and 50% work in low-skilled non-manual occupations where their skills are not fully utilised. They have to accept jobs that are more inferior in terms of levels of education or skillset, which means talents go to waste.

“Over-educated young people are likely to earn less than they otherwise could have and are not making the most of their productive potential. Not only do the skills mismatch signify wastage of human resources but they also put into question the view often expressed in the media that youths are ‘choosy’ about jobs — they should not be considered ‘choosy’ if they are doing jobs below what they are educated or trained for,” KRI explained.

4. Multinational companies offer the lowest starting salaries

Source: today online

You would have thought that multinational companies would offer higher salaries but not in the case of Malaysia-based multinational companies, where the salaries they offer is much lower than those in the civil service. In fact, findings show that the maximum median income offered by multinationals to a postgraduate is RM1,250 while even small enterprises offer RM450 more than this.

You can read the full report here.

It looks like our perceptions of fresh grads may have been a little skewed as in reality, they are not as picky or greedy as we think. After all, employees in the low-skilled sector are mostly staffed with people who have tertiary qualifications. KRI recommends that the solution to this mismatch is that hopeful students must be guided about the career path the degrees can take them.

Looks like something has to be done to get to the root of this problem!

Also read: Over 50,000 Fresh Grads in Sarawak Still Jobless As Their Degrees Are Not In Demand