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This study explores the graduate employment market in Malaysia and investigates
graduate employees work skills that are perceived most important by the Malaysian
employers of several sectors or industries. In this study, 534 employers from various
sectors are surveyed via a structured questionnaire. Data are analyzed by utilizing
parametric statistical analysis and the gap analysis developed by Parasuraman et al.
The survey findings suggest that on the average, Malaysian graduates have strong ICT
skills, ethical values and team work skills. The result from the gap analysis
demonstrates that Malaysian employers perceive that the graduate employees work
skills are still below their expectations. Some of the critical work skills that have wide
gaps are Decision Making & Problem Solving, Communication and Interpersonal,
Critical Thinking and Work Planning. These skills are vital in improving
employers outlook on the graduate employees skills and quality, and ultimately the
marketability of the graduates.

Keywords: Graduate Employment, Work Skills, Gap Analysis, Job Matching Theory


High economic growth and continuous expansion of real per capita income are
nations intention. Since Solow in 1956 introduced production function, economists
acknowledged the role of high-talent human capital and innovation in driving
economic growth. Empirical evidence and modern economic growth theories indicate
that the long-term economic growth is not solely driven by capital, but innovation
activity (Lipsey, Carlaw and Bekar 2005). Accordingly, knowledge based economic
growth models proposed by Tapscott, Lowy and Ticoll (1998) and Kelly (1998) also
noted the pertinent roles of high-skilled workers and policies in stimulating innovation
in science and technology. The Government of Malaysia allocates huge investment in
high-skilled human capital from the pre elementary school up to the post tertiary
education. Investment in education and training in the Eighth Malaysia Plan (8-MP)
was RM 43,729 million, equivalent to 25.7 per cent of the total Federal Government
Development Budget (Economic Planning Unit 2006). While in the Tenth Malaysia
Plan (9-MP) RM 40,127 million has been allocated for this sector (Economic
Planning Unit 2010). The main outcomes in the allocation of government budgets to
produce graduates with the skills demanded and matched by firms (Ministry of Higher
Education 2007) and stimulate economic growth (NEAC 2009). In todays rapid
economic change, the most critical issue in graduate employment is the recruitment of
the 'right' graduate for the right job in a competitive market. Regardless of the
enormous expansion of higher education since the 1990s, major graduate recruiters
still experiencing problems getting the right-quality graduates they want.

Each year in Malaysia, some 60,000 students graduated from the local public
institutions alone, flooding the job market (Ministry of Human Resources 2009). It is
also learnt that approximately an equal number of graduates being produced by the

local private colleges and abroad, which means that there is likely strong competition
for jobs among fresh graduates within the country. Tremendous change in the
technological developments and globalization has formed significant impact on the
nature of work where advanced use of technology is a necessity in order to compete in
the global arena (Singh & Singh 2008). Therefore, a more flexible workforce with
well developed generic skills such as creative thinking, problem solving and
analytical skills, is greatly needed by employers in various industries in order to meet
the challenges faced by businesses. Employers are also increasingly seeking graduate
to be recruited with a wide variety of skills apart from those associated directly with
their area of studies (Rawlings, White & Stephens 2005).

The competitiveness of nations and companies in todays knowledge based economy

relies more on their knowledge and intellectual capital than on other resources (Lubit
2001, Malaysia 2008). Highly quality workers embedded with strong cognitive,
functional and social competencies to perform tasks efficiently and effectively are
crucial for a companys competitiveness. Malaysia has recognized that knowledge
workers are the most critical element in developing advance technologies, improving
productivity and continuing to attract foreign direct investment (FDI) (Fong Chan
Ong 2006, Malaysia 2002, Tan & Gill 2000). The success of companies in the
knowledge based economy today lies heavily on efforts towards human capital
accumulation (Malaysia 2008, Sieh 2000). This has pointed to the importance of
human capabilities as factors of investment, economic development and as key
elements of competitiveness (Garelli 2002).

Since employers are among the most important stakeholders with regards to
graduates employability, it is therefore crucial to examine their perceptions over this
issue. Thus, the main objective of this paper is to empirically explore perceptions
among employers toward graduates employment. It is also pertinent to investigate
employers perceptions regarding the types of graduate employees work skills that
the graduates should possess in order to increase their employability level. First, this
paper presents a brief explanation on the graduate employment market and graduates
work skills principles (literature review); second, it discusses the methodology
adopted and tests conducted to obtain the reliable measures of variables. Third, it
determines the correlations among work skills. Fourth, it highlights the results of the
gap analysis. Finally, the results are then discussed and implications highlighted.



In recent years, many tasks are becoming more interdependent and employers are
beginning to seek graduate who displays a blend of technical and human relations
skills (Zargari 1997). Based on comprehensive previous evidence, Cotton (1999)
suggested that employers prefer graduates who possess basic, higher-order and
affective skills. In another study, Leon & Borchers (2002) discovered that employers
require graduates with more intrinsically humanistic skills rather than academic or
technical skills. Success in the graduate labour market is typically defined as
graduates securing employment in jobs that make appropriate use of the skills and
knowledge developed in the course of their university studies. A key element of the
government rationale for higher education expansion is the economic and

organizational restructuring associated with the knowledge-intensive economy and
the perceived necessity of increasing the supply of high-skilled labour to ensure
national competitiveness (Wilton, 2008).

Mason, Williams & Cranmer (2009) pointed that employability refer to

workreadiness that is, possession of the skills, knowledge, attitudes and commercial
understanding that will enable new graduates to make productive contributions to
organisational objectives soon after commencing employment. Studies of employer
demand for graduates have found that appropriate work experience and evidence of
commercial understanding rank highly as selection criteria because of commercial
pressures to seek graduates who will not require long learning curves when they start
employment (Mason 1998, 1999). A study by McLeish (2002) stated that work skills
for small and medium enterprises consist of five core abilities, i.e. personal values,
interpersonal skills, initiative and enterprise skills, learning and workplace skills.
Poole & Zahn (1993) categorized work skills required by employers as personal
values, problem solving and decision making, relation with other people; task related
skills, communication skills, maturity, health and safety as well as job commitment.
The core component of work skills consists of communication, team work, problem
solving, initiative and enterprise skills, planning and organizing, self management,
learning skills and technology that contribute productive employee (ACCI 2002). The
nature of work has changed dramatically, requiring a highly skilled graduate with
proficient in more language, mathematics, technological literacy, and problem-solving
skills (Zargari 1997).

On the other hand, Leon & Borchers (2002) regrouped the work skills into nine skill
categories namely; reading, writing and math; communication; critical thinking; group
interactions; personal development; computer skills; technical systems; leadership;
and team work. The following skills were mentioned most frequently; knowing how
to learn; competence in reading, writing and calculation; effective listening and oral
communication skills; adaptability through creative thinking and problem solving;
personal management with strong self esteem and initiative; interpersonal skills; the
ability to work in teams or groups; effective leadership; and basic technology skills
(Imel 1990). However, Cotton (1999) segregated the work skills into three clusters:
basic skills, higher order thinking skills; and affective skills; and traits. Further,
Kilpatrick and Allen (2001) concluded that work skills with high demand are skills for
knowledge work (ideas, design, innovation, marketing, monitoring and management),
soft skills (conflict resolution, leadership, team-building and workplace
communications), literacy, and numeracy skills. Baker and Henson (2010) identified
only three areas of work skills namely generic skills, career management skills and
career sector knowledge. In addition, Le Deist and Winterson (2005) associated
employees competency with cognitive, functional and social competence.

Al-Dosary, Rahman, & Aina (2006), stated that a majority of employers reported
quality shortcomings among job applicants for graduate employment. The major
problems of national human resources development fall into two broad categories: (a)
those related to lack of high-level manpower with key skills and competency and (b)
those related to redundant or under-utilized manpower. Thus human resource
development is basically concerned with the two-fold objective of building
knowledge and skills and providing employment and broader opportunities for
unutilized or under-utilized manpower (Al-Dosary, et al. 2006). Moreau and

Leathwood (2006) pointed out that in a context of considerable changes in the labour
market and higher education, a discourse of employability has become increasingly
dominant. Universities are urged to ensure that they produce employable graduates,
and graduates themselves are exhorted to continually develop their personal skills,
qualities and experiences in order to compete in the graduate labour market. For the
individual, employability depends on the knowledge, skills and aptitudes they possess,
the way they use those assets and present them to employers and the context (e.g.
personal circumstances and labour market environment) within which they seek work.

A local study by Azmi (1988) revealed that employers rated items such as arrive on
time, demonstrate a sense of responsibility, cooperate with supervisor and possess a
positive attitude toward work, as the major desirable employee traits. Mustapha and
Greenan (2002) identified the employers perceptions of work skills, and found that
besides the basic work skills (such as technical skills, communication skills, social
and interpersonal skills, self-motivation, critical thinking and problem solving skills),
entrepreneurial skills and positive attitude toward work are components needed by the
k-economy. Recent studies indicated that private university graduates exhibited
slightly higher level of mismatch between employers needs and undergraduates
skills namely in criteria such as critical analysis, planning, problem solving, oral
communication, decision making and negotiating skills (Chung-Khain Wye & Yet-
Mee Lim 2009). The Malaysian employers prefer to recruit graduates with high ICT
skills, ability to work as a team, interpersonal skills and proficient in English (Singh
& Singh 2008). According to them interpersonal and communication skills, academic
qualifications and work experience are key selection criteria used by employers when
recruiting new graduates. A research done by Wilton (2008) highlighted knowledge
gained by graduates, combined with transferable skills and widely recognised, highly
valued, certificated degrees may give graduates and their employers critical
advantages in the local and global market.


The underpinning theory that governs the theoretical framework of this paper is job
matching theory. The main goal of education and training is to prepare graduates for
the tasks they are going to perform on their jobs (Barnard, Veldhuis and Van Rooij
2001; Holton and Trott 1996). According to the job matching theory, a mismatch
between the required skills and the skills a graduate actually possesses has important
consequences for productivity, wages and probability to get a job (Arrow & Spence in
Tachibanaki, 1994). Therefore, the competency level (qualification) required by
employers must be equivalent with competency level of the graduates. The match
between graduates field of specialization and the field of specialization which is
required for the job is also relevant. Job match also can be identified by the degree to
which graduates are able to utilize the knowledge, skills and attitudes to the work
context (Barnard et al. 2001).

In matching theory, unemployment or underutilisation of graduate-level skills in

employment reflects mismatches between graduates and employers that may emerge
for a number of reasons (Mason, Williams & Sue Cranmer, 2009). Mason et al. (2009)
highlighted that matching theory, together with the literature on over-education and
under-utilisation of skills, pointed to several reasons why the teaching, learning and
assessment of employability skills might be expected (all else being equal) to

contribute to superior labour market outcomes for graduates in possession of those
skills. Work or employability skills are conceptualised as those transferable skills that
one might expect to be developed in an undergraduate programme but which have
broad applicability in the workplace (Wilton 2008). This refers to the work skills
transferable from higher education into employment in a wide variety of contexts. The
employability skills highlighted by Wilton (2008) refer to problem-solving skills,
written and spoken communication, foreign language skills, numeracy, basic
computer literacy, advanced IT or software skills, research skills, creativity and ability
to work in teams.

DEST (2002) defined employability skills as skills required not only to gain
employment, but also to progress within an enterprise so as to achieve ones potential
and contribute successfully to enterprise strategic directions. According to Moreau &
Leathwood (2006) employability refers to a set of achievements related to skills,
understandings and personal attributes that make graduates more likely to gain
employment and be successful in their chosen occupations, which benefits
themselves, the workforce, the community as well as the economy. As a consequence,
many higher education institutions have attempted to embed skills in the curriculum.
In relation to this, they also (Moreau & Leathwood 2006) highlighted that some
employers had placed very high importance on generic skills (such as communication
skills and team-working) and personal attributes (such as resilience and commitment).