Tough love for STEM threatens labour market

As part of Generation Y – also known as the Millennial Generation, born between 1980 to 1995 – you probably grew up with the mindset of pursuing science, technology, engineering and math (STEM) as the cornerstone for success in life.

After all, the majority of us during this period experienced the shift from analogue to digital early in our childhoods. So, most of us were aware of the importance STEM studies will have in our advancing lives.

The push towards this was supported on a government level as well, as our government had made it clear since the 80’s that they would be pursuing a 60:40 ratio of science to art stream students in our secondary schools.

You would think that the constant tech breakthroughs and advancements in our daily lives would surely convince us all that STEM is the way to go, but in reality, this hasn’t been the case.

In a recent statement, Minister of Education Dr Maszlee bin Malik revealed that while the demand for STEM related roles in the country has been growing constantly, there has been a worrying downtrend of students taking up STEM subjects – dropping from 48 per cent in 2012 to 44 per cent in 2017.

Job Vacancies by Type & Sector (‘000). (Source: CEIC Data and MIDF Research)

The revelation of this downtrend has sparked much discussion on this topic in the past weeks, and many commentators believe that this is due to a multitude of reasons – from a slowing demand of STEM related jobs in our labour market to parents discouraging our youths from undertaking the ‘harder-to-score’ STEM subjects in fear of lower grades.

The jury is not out yet on what is exactly happening, but one thing for sure is that STEM related roles, especially in our tech space, has been steadily increasing in recent years and our downtrend of students undertaking these subjects may soon cause a severe mismatch in our labour market.

Downturn in STEM related roles – truth or fiction?

There has been much debate on whether there is a downturn in STEM related roles, and from reviews of various literature on our labour market there seems to be a consensus that we were in a severe downturn but now we’re steadily on the upturn.

In an economic review report by the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), the research arm reported that low value-added jobs still continued to dominate Malaysia’s job vacancies, despite slow and steady expansion of employment and labour market growth, and a steady low unemployment rate.

Overall, things have been looking on the up and up as growth in both our labour force and employment has been outpacing unemployment growth for the last 23 months since March 2017.

“The stable job market reflects healthy development of Malaysia’s economy and provides a solid fundamental factor for the economy particularly in supporting domestic demand,” the research arm explained.

“However, low value-added jobs continue to dominate Malaysia’s job vacancies. For instance, 77.6 per cent of job vacancies last year were for elementary occupation and 11.8 per cent for operators, while the remaining 10.6 per cent for medium and high-skilled jobs.

“Prior to the 2009 Global Financial Crisis (GFC), job vacancies for low-skilled jobs were less than 50 per cent. In 2005, elementary occupation and operators constituted 30.9 and 15.4 per cent of job vacancies respectively.

“High-skilled roles such as senior officials, professionals and technicians held 19.8 per cent in 2005 against 4.2 per cent in 2018.

“In a simple word, for every 100 jobs offered in 2018, 89 opportunities are for low-skilled, 7 for medium-skilled and 4 for high-skilled workers,” lamented the research arm.

Severe mismatch between education and occupation

Conferring with these statistics, a study survey by Khazanah Research Institute (KRI) entitled ‘The school-to-work transition of young Malaysians’ reported that their survey has indicated a severe mismatch of our youth’s current jobs and what the occupations they actually prefer.

When surveying our current youth’s actual occupations, KRI noted that wholesale and retail trade roles which do not require any specific field of study or even tertiary qualifications, dominated across the board, appearing as one the top three actual occupations of youths in every single category of surveyed fields of study. Overall, it was the highest actual occupation of our youths.

Yet, the occupation did not once appear as one of the top three preferred occupations by youths in any field of study.

The KRI report continued on to showcase that of the 95 per cent of those working in unskilled jobs, 50 per cent were considered to be over-educated for their roles.

“Young workers appear to have been forced to ‘dumb down’ and accept inferior forms of employment relative to their levels of education or skills training.

“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 mismatches 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 and trained for,” said the report.

Additionally, the KRI study also inferred that high youth unemployment continues to be a persistent issue as data taken from the Department of Statistics (DoS) showcase that while our overall unemployment levels have remained low and steady at circa three per cent, youths aged 15-24 accounted for 56.5 per cent of our 502,600 unemployed Malaysians in 2017 and those aged 25-29 accounted for another 21.1 per cent.

“The unemployment rate was 15.4 per cent for those aged 15 – 19 years and 9.6 per cent for those aged 20 – 24 years, as compared to the country’s total unemployment rate of 3.4 per cent.

“For those aged 25 – 29 years, the unemployment rate was 3.9 per cent. While the unemployment rate for Malaysian youth aged 15 – 24 years was below the global rate, it was higher than that of other countries in the presented regions, except for Indonesia,” reported the study.

With a large proportion of our current STEM graduates working low-skilled jobs that have nothing to do with their field of study and our high youth unemployment rates, it is entirely possible that this depressing view of our labour market may have in turn discouraged our Gen Z (1995 and onward) youths and their parents from these ‘harder-to-score’ subjects as they attempt to search for brighter career pathways.

On the bright side of things, this severe downturn of our skilled labour market since the Global Financial Crisis of 2009 has shown steady improvement in recent years.

According to online job recruitment portal Monster.com, online hiring activity in STEM-related industries has been on the rise, with the exception of the engineering, construction and real estate industry that has seen some stagnant growth.

For instance, engineering job roles registered on Monster.com had seen the steepest annual decline since August 2016 by 16 per cent in February 2019.

“That having said, this decline is mainly due to new emerging jobs and the fast-growing digital industry. New jobs are emerging more rapidly than at any other time in history.

“Roles that did not exist five years ago have been created through the evolution of traditional roles. Top emerging jobs for Malaysia are mostly related to technology, making them hybrids of new and traditional roles that require soft skills such as management and communications skills,” Monster CEO Abhijeet Mukherjee explained.

Based off the numbers provided by Monster Employment Index, the IT industry has recorded a year-on-year growth of 25 per cent in February 2019 – leading to increased hiring activities for tech professionals by a positive four per cent as comparted to 2018.

“Digital marketing and data scientist professionals continue to gain more traction and popularity in Malaysia’s job market.

“The decrease in STEM-related jobs in the Malaysian market does not necessarily result from the lack of interest in STEM fields of study amongst secondary level and pre-tertiary students but more because of the changing job ecology within the sector,” Abhijeet suggested.

Better labour market planning needed

It’s pretty clear that we do have ongoing issues in our labour market, particularly in the fact that low-skilled roles still continue to overshadow our middle to high-skilled roles.

However, as suggested by data from Monster.com, this situation has seen consistent improvement in recent years as STEM-roles, especially those in the tech space, continue to expand.

With expanding middle to high-skilled roles in our employment market, we should be ensuring that our labour market can match up to these demands in the longer term.

Of course, this isn’t an easy task to undertake as it will take collective efforts by private companies, educations and training facilities and the government to ensure that they are implementing the right strategies aimed at moulding our youth into a labour force that we need for our economy.

To this end, KRI’s study offers a very simple solution that will help ensure that all parties are on the same page – to widely publicise and support the use of the Critical Occupations list.

Just like how countries like Australia are readily and openly advertising their critical occupations lists to attract prospective skilled migrants and raise awareness in their citizens, Malaysia would benefit from this in a similar way as it would provide better training programs and career counselling to our population.

“It is crucial not only to ensure that education and training match skills to current demands but anticipate future demands.

“Skills anticipation is a strategic and systematic process through which labour market actors identify and prepare to meet future skills needs, thus helping to avoid potential gaps between skills demand and supply.

“Skills anticipation enables training providers, young people, policy-makers, employers and workers to make better educational and training choices, and through institutional mechanisms and information resources leads to improved use of skills and human capital development,” the study explained.

From their survey, the study identified several important competencies and skills that they deemed are the most useful for job seekers.

The top five give are: communication skills, creative and analytical thinking, being honest and hardworking, organisational adaptability and English language proficiency.

Based on the critical occupations list 2017-2018, the top ten most in-demand jobs in Malaysia are:

1. Engineering:

Whenever we hear the word engineer, we automatically assume that it is linked to construction. Yes, our large construction industry of over RM102.2 billion does play a significant role in our economy but the roles of engineers are not just limited to that.

Virtually everything we might see and use in our daily lives has been a product of engineering so the value of this occupation will always be a priority to any nation.

Some of the in-demand engineering jobs identified in Malaysia are civil, mechanical, chemical, electrical/electronics, mechatronics, and mining engineers. Even engineering technicians with diplomas are also widely sought after.

2. Information and Communication Technology (ICT):

This one is a no brainer, from AI-powered virtual assistants on our phone to seamless global workplace collaboration with cloud computing, ICT has become an integral part of our lives and all sectors have reported that they are urgently seeking ICT professionals such as system analysts, software developer, applications programmer, database administration and network engineers.

3. Business:

This is one field of study that has been immensely popular due to lower barriers of entry and wide breath of potential future pathways it offers.

Unfortunately, employers are still reporting shortages of business professionals with relevant working experience. While our graduates have the knowledge from their business studies, our employers are looking for candidates with experience in marketing, business administration, finance, economics and management.

4. Accounting:

Money makes the world go round, and with the 22nd largest financial sector in the world, someone needs to manage it.

The in-demand accounting jobs are currently: auditor, tax consultant, account executive, management accounting and financial controller.

5. Actuarial Science:

It’s on almost every critical occupations list in the world but it’s probably one of the lesser known field of studies. Actuaries traditionally work in insurance industries, but their data-driven problem solving skills which can be applied in a range of other fields, including the financial services sector with banks and investment companies and government bodies, make them a very in-demand occupation.

6. Occupational safety and health (OSH):

A new entrant to Malaysia’s critical occupation list, OSH officers are here to keep the rest of us safe in our working environments and ensure that companies comply with all safety regulations in place. Industrial safety officers, technical safety officers and occupational health and safety officer are all high sought after by employers currently.

7. Education:

Our education system is understaffed, but not in our primary or secondary segment. University and college lecturers are now in high demand so if you’re thinking about getting your Masters or PhD, do keep in mind that your job prospects will likely be pretty good.

Lecturers specialising in the medical and health sciences, sciences, languages, education and engineering are particularly needed.

8. Medicine:

With rumours that some of our medical graduates are waiting up to a year to get their placements in overcrowded hospitals, you wouldn’t think we have a shortage of doctors. But despite our abundance of medical graduates, we are still facing a large shortage of specialist doctors to help care for our citizens. So, if you’re a doctor still deciding on a specialist pathway, do take note that some of the more critical roles are: psychiatrist, paediatrician, dermatologist, orthopaedic surgeon, urologist and ophthalmologist.

9. Chemistry:

Another new entrant into the Critical Occupations List, many companies are now reporting an urgent need for chemists, particularly in the manufacturing and pharmaceutical industries. The in-demand jobs are in research and development, product development, quality control and dyeing experts. If you’re a whiz at Chemistry, consider taking it a step further and you might end up with employers courting you at your doorstep.

10. Communications:

It’s a running joke that mass communication students only have unemployment to look forward to after graduation but this is far from the truth as employers report that they are in desperate need for talent in public relations and advertising roles.

According to KRI, the talent shortage is not due to a lack of graduates in this field but rather due to a lack of candidates with releva+nt job experience and required skills such as time management and creativity.

Addressing youth unemployment with entrepreneurship

One rather popular solution to addressing the issue of high youth unemployment is entrepreneurship. The idea is that if there aren’t any jobs out there that you like, then it will probably be quicker to just make that job yourself.

You generate your own source of income and, in turn, contribute to the economic development of the country by adding value to existing industries and by opening up more employment roles for the labour market.

On paper, this concept is a win-win solution for everyone involved.

Unemployed persons by age groups, 201.
(Source: DoS and KRI)

However, the KRI study found a lack of entrepreneurial spirit amongst the youth as only 35 per cent of young workers and 20 per cent of job seekers in their survey had indicated a preference for creating their own jobs by starting a business.

In fact, only two per cent of all students surveyed identified entrepreneurship as the most important competency for success.

“Furthermore, they do not recognise the importance of entrepreneurship skills, whether to start and sustain business or to succeed in the gig economy. They are not aware of the incentives and supports for SMEs, and very few young people reported receiving government assistance,” added the research institute.

There hasn’t been much conclusive evidence indicating exactly why entrepreneurship levels are so low in Malaysia, but based off past studies on the topic, culture and family support, education and training, and economic and political stability in a region have all been identified as key factors.

To this end, the study suggested that employers can help drive entrepreneurship levels by helping young aspiring entrepreneurs start up through mentorship or youth start-up programmes that help these youths develop the necessary skills, resources and networks needed for them to succeed in their own venture.

Beyond being a good CSR move to help companies build a positive image, it also allows them to identify new emerging companies and opportunities for them to further grow.

Education support is also recommended to be particularly emphasised to the rural or B40 communities, as a Harvard Business Review article entitled ‘Why we should teach entrepreneurship to disadvantaged students’ found that when entrepreneurship skills were taught to underserved and disadvantaged students, the classroom setting allowed teachers to serve as mentors and provide direction, showing these students how they can use their abilities and circumstance to succeed in business.

The article highlighted that past studies have found links between poverty and higher entrepreneurship as often adverse environments and situations would motivate these youths to undergo riskier ventures.

“The classroom also gives would-be entrepreneurs the chance to innovate and disrupt without negative consequences. The results can be both life-changing and economically positive,” the article concluded.

Overhauling our education system

To better prepare our future labour market, there have been numerous calls for changes to be made to our current education system which has been deemed to be ineffective in developing graduates that are ready for the workforce.

This is suggested as the KRI study found that our local employers had no problem hiring workers that they currently need, but found majority of applicants are lacking the necessary skills.

Many attribute this to the deep segmentation of our education streams that have ended up producing students that have either the knowledge or the know-how but rarely both.

On this front, Education Minister Dr Maszlee Malik has announced that the new National Education Policy will see the removal of our traditional science and art streams in schools.

“We are not going to put our students into Science and Arts streams anymore. In a new curriculum we will implement, we will not only emphasise Science, but also Arts (and humanities) because knowledge is one; it cannot be compartmentalised and should be integrated instead,” he said during an open dialogue earlier this year.

He argued that the world forward would be to make STEM subjects a way of life for us, updating it to become STREAM which includes vital components of Arts and Humanities and Reading to ensure that the graduates produced had all rounded knowledge and skills needed for the future.

And not forgetting our Technical and Vocational Education and Training (TVET) students, there have also been efforts underway to make the education pathway more inclusive to their academic counterparts.

Local STEM enrichment centre, The Learning Curve, that helps local schools set up STEM enrichment workshops, seminars, courses and clubs, believe that our vocational streams should also be integrated into academic streams.

Speaking to BizHive Weekly, co-founder Kenneth Chai opined that the labour market is in a mismatch right now.

“We need graduates that know the necessary knowledge for their field of work but also the necessary skills to do them. In Malaysia, that is the main issue – either you are in academics or vocational. Anything in the middle of this is very hard to find,” he said in an interview.

Kenneth Chai

“For example in an agriculture unit, you teach academic students about photosynthesis but you do not teach them how to build an aquaponic system, you teach vocational students how to fertilise but you don’t teach them about how nitrites in the soil affects growth. Why not bunch all the kids together?” he questioned.

In other first world countries, Chai detailled that vocational schools are often regarded as technical schools and are very highly regarded as they churn out students that have broader knowledge and skills than students from purely academic backgrounds.

“If you graduate from a technical school in Germany, honestly, your degree is much more valuable than a degree in Science or Arts, because you have the knowledge of a particular subject and also the ability to put that knowledge to use.

“Companies hire people because they want them to solve problems and to add value to the company, so these are the people we need right now in the country, not students with 4.0s,” he argued.

The Learning Curve currently provides workshops and courses to local schools that give students a hands on experience to STEM subjects, from mechatronics to coding, all in the aim of enhancing their learning. They have also begun pilot programmes with TVET institutes that aims to provide similar workshops and courses.

“We are trying to bring STEM parts to vocational schools and vocational parts to academics, we are trying to merge the two. And only when we have good mixture of both, can we talk about the future.”

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