Penang, with its population of about 1.8 million, faces a perennial challenge of retaining human capital. Where this was once resolved by hiring from out of state, employers now grapple with caps on workforce – a causal effect of Covid-19 and dwindling profit margins.
Until October 2020, SOCSO reported 9,489 retrenchments in the state; this is nearly 10.6% of job losses nationwide since the onset of the pandemic.1 By the tail end of 2020, Penang’s unemployment rate rose to 3.5% – a level unseen since 1989.2
Out of job and in desperation, graduates are turning to the gig economy as a financial lifeline, working mainly as deliverers for companies such as Grab and Foodpanda. But this has also accentuated factors of skills mismatch and youth underemployment.
Redundancy is Avoidable
To upskill or reskill? This is the million-Ringgit question today. The foreseeable future looks uncertain, clouded by economic crisis and global supply chain disruptions; and in the longer term, hanging over everything is the inevitable approach of automation and digitalisation of all aspects of social and economic life.
Universiti Sains Malaysia (USM) has already begun implementing initiatives to improve the employability of its graduates. It launched its HEBAT Development Centre (HDC) in 2020, offering monthly career- and employability related competency courses for students. “These students are then graded based on their accomplishments and awarded with certifications upon graduation,” says Mohamad Kasyfi Mohamad Taufik, HDC’s assistant registrar.
To understand the latest in industry needs, HDC has forged university-industry partnerships between public and private entities. This includes InvestPenang, the government agency in charge of FDI into the state, among other things. “A major challenge we face is the general lack of awareness in students about the needs and requirements of different industries, or that skills and expertise in fields of engineering and computer science are the most sought-after these days,” he explains.
HDC facilitates opportunities for direct engagement between students and Penang’s industries by hosting career-oriented forums. But beyond this, Mohamad Kasyfi advises on self-improvement for students to better navigate the challenging labour market. “For instance, enhancing access to niche areas like analytical data, basic web development and entrepreneurship is important.”
Education is Not the Government’s Responsibility Alone
Another institution tasked with upskilling Penang’s workforce is the Penang Skills Development Centre (PSDC). Established in 1989, its campus at Bayan Baru has provided training for more than 200,000 youths in science, engineering and industry-related fields. It has also benefited from extensive public-private cooperation.
“PSDC’s tripartite framework brings together the industries, the federal and state governments, and academia; this has shaped our success in addressing the upskilling requirements of the manufacturing and engineering industries,” says CEO Muhamed Ali Hajah Mydin.
Partnerships with local firms such as Greatech Technology, Inari Technology, Sophic Automation and UWC have provided scholarships for students undertaking courses at PSDC, in addition to the dual training programmes PSDC organises for apprentices at multinational companies such as B. Braun, Bosch and Osram.
But with classes and examinations postponed because of Covid-19, graduation numbers have dropped. “While computer and software courses are unaffected, PSDC’s technical programmes and lab sessions have been impeded by the MCO.
“But there is only so much that tertiary institutions are able to do in preparing students for the workforce and in furnishing them with relevant skillsets,” explains Muhamed. “Education is not solely the responsibility of the government. You certainly cannot expect a fresh graduate to immediately perform once he or she is hired. Within any company, there has to be some element of on-the-job training for new recruits. In this regard, the proactiveness of the private sector is relied upon in upskilling the workforce for specific job requirements.”
Germany, for example, builds its talent pool through apprenticeship programmes. Its much vaunted “dual system” allows school leavers to pursue vocational apprenticeships, where training is split between vocational schools and at workplaces.
Muhamed also points out a fundamental shortcoming that continues to dog Malaysia’s labour market – stagnant wages. Salary growth among youths has been persistently sluggish, lagging behind the country’s GDP growth even before the pandemic began; this is an indication that workers are underpaid vis-à-vis their productivity.3 “If a company is paying peanuts for a computer science graduate, can one expect the new employee to perform miracles? In major cities like George Town, employers should take into account rising living costs.”
Depressed wages are also pushing graduates in the direction of the gig economy. “Workers at the Bayan Lepas Free Industrial Zone typically work from 8am to 5pm and sometimes, they work overtime as well. In comparison, a Grab driver is able to earn more within the space of a few hours.”
Food for Thought
There is much appeal in the gig economy, especially in this current economic slump, but Muhamed cautions for longheadedness: “It is unwise to just focus on the immediate gains of doing gig work; it does not offer career progression and opportunities to grow the way being gainfully employed does.”
Mohamad Kasyfi agrees. “Youths should be prepared to start from the bottom-up; there is no shortcut to success. But a head-start is always encouraged, through industrial programmes, internships and apprenticeships.”
To quote Aldous Huxley, “There is only one corner of the universe you can be certain of improving – and that’s your own self.”
*This is an edited article originally retrieved from Penang Monthly (July 2021 issue)
- Ashman Adam. “Socso CEO warns of over 100,000 job cuts by end-2020 if Covid-19 persists” Malay Mail (2020):
- Labour Force Survey Report 2020 Department of Statistics Malaysia (2021)
- Work and Wages of Malaysia’s Youth: Structural Trends and Current Challenges ISEAS-Yusof Ishak Institute (2020)