Abstract

The rising unemployment rate among new university graduates today is surprising.
Now the group of unemployed graduates is increasing to a level of concern even in
some high growth economies. This is due to a number of factors or causes that cause
major causes and issues / impression on the unemployment of many new graduates.
As we can see, currently graduates with a degree still have no jobs. This is because
graduates who have recently completed their course, are not always easy to find
valuable contacts to recommend work or get recommended. Precious connections not
only guide them in the right direction but also help new graduates to step into the
workplace easily.

New graduates who are unskilled and inexperienced will find it difficult to get jobs and
cause unemployment as most employers will seek professional workers with a set of
specific work skills to sustain the company's performance during the recession. The
impact of unemployment among graduates is mainly financial issues. Graduates
usually do not have enough savings or stable sources of income to support
themselves, their majority will face inadequate money usage every day. With the lost
income and the frustration involved in it, the recent unemployed may experience
negative attitudes towards the ordinary things of life. In addition, the effects of
unemployment include the loss of skills and new graduates' talents.

Percentage of unemployment among graduates in Malaysia has continuously

become an issue until nowadays. The unemployment figures have increased from
2.6% in 1996 and 3.7% in 2009 and the total percentages are still above 3% until the
year 2013 (Department of Statistic, Malaysia). A graduate is considered as
unemployed if he or she works in a short time or works in jobs which require lower
qualifications than achieved (Ishak et al., 2008).
Furthermore, there is also empirical evidence that the number of unemployed
graduates in ASEAN increases every year from 1996 to 2015. According to “ASEAN
Community 2015: Managing integration for better jobs and shared prosperity” report,
employment growth has slowed in ASEAN in recent years. Although in 2012
employment grew by 1.9 per cent, the number decreased to 1.5 percent in 2013 and
this figure was at par with the global rate of 1.4 per cent.

In addition, according to survey of human resource personnel and bosses conducted

by Jobstreet, a Malaysian employment agency in 2005, the survey shows the main
problems faced by employers in hiring fresh graduates were poor command of
English with 56%, poor character, attitude or personality with 37%, demanding of
salary with 33%, irrelevant Degree or job mismatch with 30%, fresh graduates too
choosy selecting jobs and company with 27% and no suitable job opportunities with
16% (Ministry of Higher Education Malaysia, 2012). Thus, this show that most of
Malaysian graduates unlikely to have employability skills wanted by future
employers.

Results from several studies have shown that there is a mismatch of employment
requirements between industries and knowledge and skills possessed by university
graduates. Therefore, degree holders have difficulties in securing jobs as they
cannot meet expectations of the industries.
Problem Statement

Malaysian people have been taught facing on the issue of high unemployment rates
among the local graduates. This issue has been a phenomenon to the current news
as it has been aired on the television, unemployment among Malaysia graduates such
as lack of skill experiences, Malaysia graduates demand too much on salary and
employer does not believe in fresh graduates.

The main problem ability of the unemployment among Malaysia graduates is the lack
of skills. Nowadays a lot theoretical subject have been taught without implementing
the practical sides and without skills. Then, they are lacking of English command skill
and poor communication skills that make them difficult to get a good job.

Next, another problem of unemployment is Malaysia Graduates demand too much on

salary at the unreasonable. They want the salary more than what they are deserve.
Besides that, they want a job location must near from their house because easy for
them to commute from their house to the work place.

Last but not least, employer does not believe in fresh graduate`s ability. Fresh
graduates have no experiences. The employer nowadays requires graduates to have
some work experiences in order to requirement of qualified. Other than that, employer
expectation of fresh graduates is also one of the factors that lead to the unemployment
of graduates.

There are several factors that may affect the fresh graduate unemployment rate lack
of skills, demand to salary and don’t have experience. Three of variables were chosen
to determine whether they had a direct relationship with the employer either positive
or negative.
Objective of The Study

For this research, some objectives have been identified. The objectives of the research
are:

1. To study the impact of unemployment on fresh graduates

2. To identify whether there is any significant difference between the

perception of employers and the perception of graduates with regards
to employability skills.

3. To identify the important graduate employability skills as perceived by

employers.

Research Question

This study attempts to answer the following questions:-

1. What are the major skills required by employers?

Literature Review

According to Department of Statistics, Malaysia (2013) the unemployment rate in

September 2013 shows a decrease rate compared to August 2013 with 3.1 % to
3.2% respectively. Furthermore, there is also a decrease rate of unemployment
compared to last year on September 2011 with 3.3 % to 3.1 % on September 2013.
Moreover, the labour force participation rate show positive growth with 69.6 % in
September 2013 compare to the previous month with 69.1 %. However, there is
slightly increased on the number of unemployed labours in the last three month with
421,200 unemployed labours on July 2013, 441,800 unemployed labours in August
2013 and 443,200 unemployed labours on September 2013.

Furthermore, according to the Labour Force Survey Report Malaysia (2012), the
labour force participation in 2012 show an increasing rate from 64.4 % with 12.7
million labour forces in 2011 to 65.5 % with 13.1 million labour forces in 2012. While,
the unemployment rate on 2012 shows a decreasing rate from 3.1 % with 391,400
unemployed labours in 2011 to 3.0 % with 396,300 unemployed labours in 2012.
However, there in an increasing number of unemployment recorded in 2012. The
rise of the number of employed and unemployed labour force is resulted by the
increase number of population in the labour market.

For the year 2017 the percentage was 3.4%. According to Department of Statistics,
Malaysia the unemployment rate in 2017 shows a decrease rate compared to year
2016 from 3.5 % to 3.4 %. But in year 2015 the unemployment rate at 3.1 % rose
sharply to 3.5 % in year 2016. According to Bank Negara Malaysia's 2016 annual
report, the unemployment rate among youths rose 1.2% from an estimated 9.5% to
10.7% in 2015. In comparison, the national unemployment rate went up by only 0.2%
from 2.9% to 3.1%. In addition, the largest unemployment age group recorded is the
age group of 20 to 24 years. The youth age of 20 to 24 years old has an increase
rate of unemployment 0.6 %, with 40.0 % in 2011 to 40.6 % in 2012. However, more
than half of unemployed labours are secondary educated or high school leaver with
60% which show an increase rate compared to the last year with 56.3%. While, the
second large group unemployed labours is tertiary educated or university graduates
with 27.3% in 2012 which show a decrease to 29.8 in 2011. According to the statistic
of graduates in the labour force Malaysia (2011), the highest unemployment rate
among graduates was recorded in 1987 with 5 % due to the economic recession
which also reflected on 1998. However, the unemployment rate of graduates decline
from 3.8 % in 2005 to 3.1 % in 2010. In contrast, the number of unemployed
graduated increased since 2007 from 53,500 unemployed graduates to 65,500
unemployed graduates in 2010. Surprisingly, most of unemployed graduates are
from Social Science, Business and Law field study with 39.4 %, followed by
Engineering, manufacturing and construction field study with 21.7 % and Science,
Mathematics and Computing with 17.9 %.

In 2014 to 2015, Malaysia's unemployed youth aged 15-24 grew drastically from
9.5% to 10.7%. This is a larger margin than the unchanged unemployment rate of
the country, which rose from 2.9% to 3.1%. This shows that youth unemployment
rates in Malaysia continue to increase for the last 2 years. It is important to consider
structural barriers when solving the problem.

In the March 2017 monthly Labour Force Survey conducted by the Department of
Statistics Malaysia (DoSM) released on May 15, DoSM said Malaysia’s employment
expanded in March to 14.42 million, while labour force grew closer to 15 million
persons. This meant 20,000 new jobs were added as compared with the previous
month. While the unemployment numbers went down by 4,000 to 0.51 million.For
people outside from the labour force rose slightly to 32.3% in March from 32.2% of
working-age population. Thus, this show that there is an unemployment problem
among graduates in Malaysia that needs to be concern of.

Job mismatch are common topics related to unemployment among graduates. Work
mismatch can also be determined as non-conformities. This applies if the formal
education level of the worker is deviated from what is required for the job. Skills
mismatch occurs if the employee has a higher level of skill or lower than what is
required to perform the task (Berlingieri & Erdsiek, 2012). According to research
conducted by Shujaat Farooq (2011), job mismatch phenomena can be divided into
three categories. First, there is a job mismatch compared to the level of graduate
education. Second, job mismatches compared to graduate qualifications. Lastly, job
unsuitability is compared to the degree of postgraduate studies.

There are numerous researches on employers who have unemployment problems

among graduates. In addition, most graduates do not have the skills to speak or
write in English (Md Yasin, et al, 2010, MoHE, 2008; Tneh, 2008; World Bank, 2005;
Ambigaphaty & Aniswal, 2005; Spear, 2005). English proficiency is very important for
graduates. According to the Association of Language and Academic Learning
(2009), English language proficiency can be defined as the ability of students to use
English to communicate either in the vocal context and written in anxiety to use
correct grammar and sentence structure (Arkoudis, S., et al, 2009). In this century,
the Center of Higher Learning raised concerns about the issue of marketability
among graduates where graduates could not get a job after graduation. This is due
to the lack of job skills among graduates below average from employer expectations.
Job ability can be defined as the ability of a person to get a job according to their
respective education backgrounds (Wickramasinghe & Perea, 2010; Dearing, 1997).
 Theoretical Framework and Hypothesis

JOB MISMATCH

UNEMPLOYMENT
AMONG
ENGLISH MALAYSIA
PROFICIENCY GRADUATES

EMPLOYABILITY
SKILLS

Independent Variable Dependent Variable

Research Methodology