Introduction

Unemployment is defined as a situation where someone of a working age is willing to work

and actively finding a job but is not able to get a job currently.

There are four types of unemployment which are known as the frictional unemployment,
structural unemployment, cyclical unemployment and seasonal unemployment. Frictional
unemployment occurs when workers are in between jobs. Precisely, they have the skills but
no information of the job. There is always likely frictional unemployment to occur in an
economy as people take time to find job that suits their skills. Whereas structural
unemployment occur due to a mismatch of skills or geographical location. For example,
occupational immobility. There may be skilled jobs available but not many people have the
relevant skills for that jobs provided. Therefore, firms may face difficulties to recruit workers
due to occupational immobility. Cyclical unemployment occurs when there is a negative
economic growth which is known as recession in the economy. For example, during an
economic downturn, some firms will close down their business and that causes workers to
lose their jobs. Seasonal unemployment occurs when the demand for specific work and
workers change due to the weather, variations in the tourism and other calendar related events.
For example, during raining season, the demand for umbrellas will rise, therefore the market
have to produce more output. In order for the market to product more output, they need more
workers to increase productivity of the umbrellas.

There are 10 factors that contribute to the increase in unemployment rate which are lack of
experience ,poor English proficiency, unrealistic salary and benefit expectation, poor
character, attitude of personality, migrant labour has taken away jobs from Malaysian, quality
of education system, quality of lecturer, graduates attributes, technological change and
recession in the economy.

Unemployment can be calculated using the formula below :

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑢𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑
Unemployment rate = × 100
𝐿𝑎𝑏𝑜𝑢𝑟 𝑓𝑜𝑟𝑐𝑒

According to Statista.com, the unemployment rate in Malaysia shows an upward and

downward trend. The unemployment rate in Malaysia stated the highest in 2009 with 3.7%
and the lowest in 2014 with 2.9% and dropped to 3.4% in year 2017 compared to 3.5% in the
year 2016.

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High Youth and Graduates Unemployment through Lack of Experience

Nowadays most of the companies prefer to employ people with experiences rather
than those without working experiences. Based on our research, there are several reasons
leading to the high unemployment rate.

People lacking of experience are mostly fresh graduates from university or college.
The syllabus in university should provide more exposure on real-life industrial training, such
as industrial attachment and internship program. Different circumferences have to be
managed in different solutions, and the problem-solving skills can be accumulated from the
real-life experiences. For example, a programmer has to be familiar with a series of computer
languages such as C++, PHP, Java and etc. If the applicant did not meet the basic
requirements of the company, the company cannot offer the job to this applicant.

In University, the knowledge is mostly gained from textbooks, but sometimes the
knowledge learnt is hard to be applied on working environments. University may extend the
required internship period from 3 months to 6 months or even longer. If the training duration
is not long or sufficient enough, students may not be able to apply what they have learnt in
school on their works. University students are suggested to apply for companies related to
their courses. This may help them improve the learning and practical skills. It is not
recommended to join those companies which simply arrange the trainees sitting in front of
the computers and do nothing but day dreaming.

Firstly, the reason why employers prefer experienced employees is because

experienced employees can complete the jobs easily without spending much time on learning
their works. Having employees without experiences, companies need to provide additional
training and courses for those employees. This will definitely contribute to the cost of the
company.

Besides, the employee may be not familiar with the industry, thus, it is possible that
they cannot complete the job well on time. It is not ensured that they are able to complete
their jobs precisely and correctly with their assigned supervisors. They may spend some time
on adapting to the new environment and less focus on the jobs. Therefore, students who
graduated with excellent academic results are no longer secured with good jobs or
competitive edges in career advancement.

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Poor English Proficiency

Today, English language is playing an important role as one of the most effective
communication medium in international business and technology based industries. English
education is meant to prepare individuals for the real challenging world. Majority of
Malaysian students are not proficient in English even upon completing the eleven years of
education.

It has been observed that many students in Malaysia, upon receiving minimum eleven
years of English education in schools, are still unable to use the language proficiently. This
leads to institutions of higher education, having to teach English to graduates as these
graduates are having difficulties in obtaining jobs. Being top in class and the number of
degrees that one has will not make the person good and proficient in English because the
communication skill that is possessed is the one that helps in the real world. This is the issue
that is worrying the employers. There are a lot of employers complaining about the level of
English language proficiency among graduates. The employers are getting stressed as the
quality of students that graduate from local university are not able to perform because they
are not prepared to face the real world as they are only good to perform well in examinations.

In todays of globalization economy, the success of the nation depends mainly on the
skills and the knowledge that the individual show in competing towards the growth.
Education plays a crucial part in every country which does not only help in the growth of the
economy, but it is also important in the development of the nation. It is not new that
individuals with higher levels of education tend to enjoy greater economic prosperity. One
will be able to have good communication with a wide range of people from various
backgrounds, religions and ethnicity. The education system in Malaysia has become the
centre of attraction. At the moment, this is not what we are seeing in Malaysian’s students as
the students who complete their education and move on to the higher education level, are not
able to use English fluently. The main reason why one is unable to secure a good job,
especially in the private sector is due to the lack of proficiency in English.

Malaysia has long recognized the importance of English and has placed various
strategies in the education system to improve the standard of its citizen’s English language
capability. Institutions of higher learning (IHL) in Malaysia emphasized on the teaching of
English in its endeavour to improve English proficiency of its students in line with the
national education policy and system provided by the country’s policy makers. English is a

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necessary language for students and they need to master this language to prepare them for the
world which is full of competition. To meet the demands of globalization, they will also need
to have good communication skills, as only the best will be selected by employers.

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Unrealistic Salary and Benefit Expectation

Factors that causes unemployment issue among fresh graduates goes further than the
economic situation and are more likely due to their unrealistic salary and benefit expectation .
Of the 571 human resource practitioners who took part in the survey, 64% felt that the top
reason why fresh graduates has been rejected after the interview was because the candidates
were asking for unrealistic salary or benefits. A previous JobStreet.com survey disclosed that
60% of fresh graduates expect a salary of RM3500 for their first job while 30% want to be
paid as high as RM6500 in order to live comfortably. However, the average salary offered to
fresh graduates is only between RM2100 to RM2500. The actual salaries for various position
varies based on many factors such as market demand and supply, academic grades and
acquired skills and the compensation and benefits policies of the hiring company.

Among the factors which contribute to fresh graduates demanding for unrealistic
salary were parents financial support which exposed them to a high standard of lifestyle
during student life and their parents would stop supporting them once they started working.
Some of the students now already own their own cars before started working. Therefore, they
need a job with high salary to support the high cost of living. The fresh graduates were
actually offered with some job opportunities but they turned down the offer because they
reckoned the salary given is too low. The survey results also indicated that 86% of the
employers did not discriminate against graduates from a specific type of university. They did
not mind hiring fresh graduates from the local public university, local private university or
even foreign university. But the fresh graduates sometimes is very choosy when applying for
their jobs.

According to a survey from JobStreet.com last month, they want the salary from more
than they deserve. Besides that, they want the job location to be near from their home because
easy for them to commute from their home to the workplace. The fresh graduates have no
working experience but demand a high salary which is not reasonable. Most graduates were
not willing to apply for jobs that offer contract-based work. These graduates need to realize
that most of the jobs available today will not offer them permanent positions. Most of them
are contract-based but if they prove to be a good employee, there is no reason why the
employer will reject to give them a permanent position later on.

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Poor Character and Attitude or Personality

Poor character, attitude or personality of our graduates is also another factor why the
unemployment rate among fresh graduates in Malaysia is rising. In Malaysia education
system, students are taught to memorize rather than to have an actual taught process about the
subjects that they are studying. Students are told to “ just keep quiet and follow instructions”,
raising questions to the teachers is bad.

When they get jobs, graduates did not appreciate the opportunity given by their superior.
They simply complete the job and some of them always do the last minute work. They submit
the tasks given by their superior late and it is incomplete. Besides, they also skip meeting and
always late to work. They also constantly give unreasonable reasons such as wake up late,
traffic jam and the list goes on. They also tend to not admit to their mistakes when they make
mistakes at work instead they push the blames to others. This working attitude made the
employer disappointed in them and hence terminate their service.

In a nutshell, Malaysia has created a few generations of young adults who are unable to
form proper thoughts, who are afraid to ask questions and who do not bother to even try to
understand why things work the way they do. They just sit and take instructions quietly and
that is the extent of their ability to communicate and their ability to show their attitude and
personality. Besides, graduates are not prepared to face challenges and not bold enough to
take risks. It may inferred from the graduated students perspectives that graduates inability to
adapt and learn new things with their wrong attitudes to learning may have led to the lack of
graduate readiness for employment. So, most of them failed to apply what they learnt in
school when working.

6
Migrant Labour has Taken Away Jobs from Malaysian

Migrant labour is a person who works in a country other than the one of which he or
she is a citizen. Malaysia is one of the country many Asian countries receiving foreign skilled
labours, semi-skilled and unskilled workers from abroad. These workers are mostly from
Indonesia, Bangladesh, Nepal, Myanmar, Thailand, China, Philippines, India and Sri Lanka.
Attendance of foreign workers in Malaysia are to help the country to overcome the shortage
of workers. As Malaysia moves inexorably towards high income nation status, more and
more of them are seeking jobs within a comfortable salary scale. Most of the local workers no
longer want construction and labour jobs and these are left to the migrant workers.

Malaysian are not interested to work in low class sector such as construction,
manufacturing and plantation industries. Migrant labour do the three jobs that Malaysian do
not want because for them the environment is dirty, dangerous and the job is too difficult.
Malaysian seek the comfort and status of office jobs, preferring executive positions in
corporations, or being business owners on their own right.

For the migrant workers, they came to Malaysia with the dreams and aspirations of a
better life. The wages of migrant labour is lower than a Malaysian that causes the employer
prefer to hire them. As an example, usually Malaysian expect their salary to be RM2000 and
above but for migrant workers, they expect their salary to be RM1200 is enough for them.
Most of the migrant labour are hardworking compared to the local graduates and workers.
They came here to earn a living cost and also to support their family back in home country.
The employers prefer to hire migrant labour rather than Malaysian because migrant labour
can reduce production cost and expand output and exports.

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Quality of Education

Nowadays, quality of education is important for youngsters to build their

characteristics and attitudes instead of just focus on the achievement of academic goals.It
is an important criteria in order to prepare them to be a more competitive human capital in
the future and as an important asset that determine the future economic growth in
Malaysia.

Based on the findings of Hoy and Miskel (2005), it stated that the factors that affect
the effectiveness of an educational instituition are leadership, quality of curriculum,
classroom climate, achievement-oriented , effective learning time, structured teaching and
recognition of success. Findings of the study shows that many respondents are agreed that
the quality of education affect the unemployment rates among Malaysian graduates.

The increase in the competition among the educational instituition in Malaysia due to
the increasing number of public and private educational instituitions in Malaysia had been
lead to the increase in the unemployment rates among graduates in Malaysia.

Deputy minister of Human Resources, Abdul Rahman Bakar, stated that the main
factor that causes unemployment problem among graduates is the failure to ensure
educational syllabus or curriculum consistent with the matters required in the job market
(Utusan Malaysia, 18th May 2005).

The curriculum and educational structure provided by the educational instituitions

have no relation and match to the skills required in the workplace and thus causes
graduates unable to contribute what they had learned to the requirement of jobs because
they have not obtained any skills that can match with the jobs and we can say that there is
a mismatch of jobs.

Based on the study of UKM, employers and industry also mentioned that the
curriculum at the higher educational level should be revamped as many of the graduates
produce by the instituitions did not meet a satisfactory level of job competencies.

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Quality of Lecturer

The quality of lecturer is an important factor that determine the quality of graduates
and universities. The higher the quality of lecturer, the higher the competency and rankings of
the university as they are able to produce many effective graduates who are the country’s
future effective workforce that determine countries economic growth.

Besides of educating, the personality and attitudes of lectures become a model and
examples for students to be learned based on the study conducted by Nur Zakiah Hani and
Masnora (2011). The responsibility of lecturers is important as they carry an important task to
educate and influence the graduates in order to produce an effective human capital for the
country as graduates are an important assets that determine the growth of country. However,
the competency of the lecturer in educating and influencing students are a very important
criteria in all the educational institutions in Malaysia. The lack of quality such as competency
of lecturers often decrease the efficiency in producing a productive workforce in Malaysia. It
may threatened Malaysia’s economic growth and decrease the competition of Malaysia in job
market as compared to other countries such as the ASEAN 4 countries and restrict the
opportunities of Malaysia in expanding and entering international market.

Finding from Zalina Hanapi, Mohd Safarin Nordin, 2013 stated that many respondents
are agreed that the competency of lecturer will influence the achievement, ability and skills of
Malaysian graduates. The findings also show that lecturer should be provided with training
and consistent courses to enhance their skills in line with the latest technology, skills and
information. Based on the study conducted by Ahmad Eismat (2009), stated that there were
lecturers at a higher educational institutions in Malaysia who did not emphasize on planning
and organizing skills in teaching and learning activities. However, lecturers should be aware
that all these latest skills are important to be learned and mastered by graduates as it may help
graduates to apply in the future job market.

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Graduates Attributes

Graduates attributes refer to the skills, knowledge, abilities and qualities that needed to
be gained and developed by graduates when they are at the higher educational level. However,
there are two types of skills, that is technical and employability skills. Technical skill refers
to the specific tasks related to technology that is needed to be learned and mastered by
graduates to prepare them in the future job market. Whereas employability skill refers to the
quality and personal insight by which a graduate should have to help them to be a
competence and competitive workforce.

Finding from Zalina Hanapi, Mohd Safarin Nordin, 2013 show that majority of
respondents agreed that lack of technical skills and employability skills among the graduates
is one of the important factors that causes unemployment issues. Based on researcher’s
Aminah, who stated that technical skills are an asset to the graduates, if the graduates cannot
master it, how they are going to work? But most of the students, they cannot recall what they
have learned in the past. Based on the researcher’s Syiris, stated that employability skills are
important in order to keep the existing job, communication, body language, and a high
commitment should be there whilst working.

Based on the study conducted by Ramlee at Al (2008), stated that university students
have a less preparation in facing the globalization and k-economy era. Consequently,
graduates are facing problem in the working market and they are unable to compete in the job
market which lead to the increase in unemployment issues in Malaysia. Based on The
Graduate Tracer Study Report (2009), stated that there is about 81.7% of the unemployed
graduates are in need of additional training such as training of English language skills, career
development, ICT skills, communication skills and entrepreneurial skills.

The current world market are more emphasize on the technical skills and employability
skills. However, employers stated that the lack of communication skills, team work, positive
work ethnic and leadership are an important factor that lead to the unemployment among
Malaysian graduates.

10
Technological Change

Technological change refers to an increase in the efficiency of a process or product that

results in an increase in output without an increase in input. Technological change is
important on increasing the efficiency of production in a lower cost and in helping the
economies to evolve. The more rapid the technological change, the higher the efficiency in
the production of goods and services that leads to economic growth in gross domestic product
(GDP) of a country.

Based from the finding by Azeem Fazwan Ahmad Farouk (2017), technological change
disrupts humanity. The fourth revolution is different from the third because it is a
combination of cyber-physical systems which is the internet of things and the internet of
systems. In his findings, it is stated that the first three industrial revolutions has shaped how
society modern lives evolved, shaped by the increase in manufacturing industries. The second
revolution handed society a template for modern lives that support consumption economy.
However, even when the first three revolutions had leave a great impact of economic growth
and wealth, it unfortunately came with a great social cost.

Based on Azeem Fazwan Ahmad Farouk (2017) findings, the shift from an agricultural
industry to industrial industry was wrenching and breaking up communities and making hard-
learned trades suffering. In western countries as well as Malaysia, industrial revolution
increased social mobility but widened social divide. In rural area, machineries does the work
of the labours which causes them to lose their job. Technological advancement causes the
process of production to be efficient and it cut cost at the same time hence, the labours is not
needed in doing the jobs.

Based on the research by Daniyal Rehman, (2015), it stated that low-skilled workers faced
the most harm from technological change as machineries and robots as well as computing
advancements replaced workers undertaking repetitive tasks. Unemployment is on the rise
within sectors such as administration, service work and even within construction in Malaysia.
However, past technological shocks have increase the overall employment rate for nations.
Technological shock will decrease the demand for low skilled workers however this depends
on the flexibility of the labour force in regards the changes in technology.

11
Recession in The Economy

Recession in the economy refers to a period of temporary economic downturn during

which trade and industrial activity are cut down, generally identified by a fall in gross
domestic product (GDP) in two quarters. During recession, there is a fall in five economic
indicators which are the real GDP, income, employment, manufacturing and retail sales.

According to Prof Hoo Ke Ping (2017), Malaysia will be facing recession in the economy
on this year 2018 due to a decline in consumer confidence and retrenchment of workers from
various sectors such as, oil and gas, banking, retail and electronics. A decrease in oil and gas
industry, banking industry, retail and electronics industry causes unemployment.

According to Kimberly Amadeo (2018), the first sign of an upcoming recession occurs in
one of the leading economic indicators which is the manufacturing jobs. Usually,
manufacturers will receive huge orders few months ahead. If the orders stars to drop, factory
based jobs will starts to drop as well. When manufacture industry stops hiring labour forces,
it simply means that other sectors of the economy will experience slowdown. Usually, the
decrease in customers demand is the one that causes businesses to face losses. As business
faces loss, they will stop expanding and they will stop hiring new workers to cut cost.
Recession in the economy is very destructive as it creates a wide-spread of unemployment
where it can go up to 10%. This is what affects most people. As unemployment rate increase,
the consumer purchase will decrease.

According to Steven Nickolas (2018), recession effects can worsen the situation. When
there is a massive retrenchment of workers, consumers tend to save more money, tightening
the money supply and those who are unemployed or workers with low wages will save more
and spend less, decreasing the demand on goods and services as well as decrease in consumer
spending. The decrease in the demand lower down the growth rate of businesses which leads
to major losses in small businesses and higher unemployment rate in Malaysia.

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 Conclusion

Nowadays, the employer will find the worker who had a lot of experienced one
compared to the one without experience. Lack of experience and skills are also causes of
graduate unemployment. Generally, most organizations prefer to employ graduates with
experience. Furthermore, in Malaysia, the private sector today is not interested in recruiting
local graduates because they lack essential skills, such as proficiency in English and
interpersonal skills. There appears to be a disparity between what employers require and what
skills graduates have.

In view of this, the government has implemented several measures to reduce the
problem of graduate unemployment. One such measure is the introduction of several Training
programmes for fresh graduates. For instance, the Ministry Of Human Resources, through
their training agencies, has introduced the 'Unemployed Graduates Training Scheme' in order
to equip graduates with certain skills and experience. The Domestic Trade and Consumer
Affairs Ministry, likewise, has initiated a programme where established retailers have started
recruiting graduate and diploma holders as management trainees. This scheme aims to not
only provide employment opportunities for fresh graduate but also to expose them to fields in
the private sector other than the ones they specialized in.

Another measure involves a review of the tertiary education system. Soft skill
development should be incorporated into the education curriculum where students can
participate in extracurricular activities to enhance soft skills such as personal qualities,
interpersonal skills and, critical and creative thinking. These soft skills should be acquired
through participation in extracurricular activities while they are studying for their degrees. A
lecturer, for instance, can develop students' skills and knowledge by stimulating their minds
with discussions and case studies. These skills will enable them to communicate effectively,
manage relationships, lead team, solve problems and succeed in the job market. Thus, there is
evidence that lack of skills and experience are the main causes for graduate unemployment.
To overcome this problem, the Ministry of Higher Education must ensure that the tertiary
education system is relevant and up-to-date. It should continually evaluate the tertiary
programs to help produce quality graduates who meet the needs of industries. Also industries
need to play their part by providing more opportunities for training fresh graduates while the
graduates themselves need to be more open and take up these offers.

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