Context: Despite an increasingly better educated workforce, job creation for high skilled jobs remains low in Malaysia. The country’s youth unemployment rate of 10.5 per cent in 2016 was almost triple the national unemployment rate of 3.4 per cent. Furthermore, it is estimated that around 400,000 people are unemployed, out of which about 161,000 of them are graduates.
One of the main reasons for the high level of unemployment for youth and young graduates is the labour-market mismatch caused by the lack of supply of high skilled jobs and a deficient preparation of graduates in the skills the labour-market needs. In order to face the labour-market mismatch, Malaysia is investing in schemes that can drive the country toward a high-income economy with knowledge-intensive activities.
Implementation of programme/ initiative: The Graduate Enhancement Programme for Employability (GENERATE 2.0) aims to increase the employability of graduates by equipping unemployed degree holders with industry-required skills. It is one of the Human Capital Strategic Initiative schemes run by the Human Resources Development Fund (HRDF), an Agency under the Ministry of Human Resources of Malaysia.
GENERATE 2.0 consists of a maximum of three months training in high-end skills and subsequent job placements. The traineeship’s target groups are Malaysian graduates from public universities that have remained unemployed for at least three months after completing their studies, as well as newly recruited graduates in HRDF registered companies. The focus industry areas of the programme are mainly wholesale, retail, tourism, health care and logistics.
Main challenges: Under GENERATE 2.0, unemployed graduates train with HRDF registered employers and associations that participate in the programme. Employers willing to participate must be able to offer high-value and well-paid jobs to the trainees upon completion of the programme, which many are unable to provide. Moreover, the training courses offered under the initiative frequently have high skill industry requirements which many graduates are unable to meet. This makes the programme less effective than other human capital initiatives in terms of number of participants.
Results achieved: The Government has allocated a total of about RM20 million (almost USD5 million) to GENERATE 2.0 and a related scheme. Within GENERATE 2.0, some 648 unemployed graduates have been involved in the initiative, gaining valuable skills and being in a stronger position to attain subsequent employment.
Moving Forward: One of the six strategic thrusts of the Eleventh Malaysia Plan 2016-2020 is to accelerate human capital development for Malaysia’s transition into a knowledge-intensive society. With this objective in mind, the Government is committed to improve labour productivity and to create more job opportunities that require highly-skilled workers. GENERATE 2.0 is one of the human capital schemes that aims to support the national agenda towards its objective of shifting towards a 35 per cent skilled Malaysian workforce, from the current 25 per cent.
HRDF plans to keep collaborating with the private and public sectors to stimulate the training of the country’s workforce to meet the skillsets required by industries. The schemes were studied for possible improvements in November 2018 and HRDF decided that costs would be shared between an employers’ levy and financial assistance and incentives from HRDF, having previously been fully financed by HRDF pool funds.
Replicability: GENERATE 2.0 is an effective example of a Government initiative to increase the percentage of the Malaysian skilled local workforce. Not only do graduates receive training to prepare them for the workplace and a guarantee of a job placement, but employers also benefit from skilled workers, trained in a manner suited for the specific industry and at a much lower cost compared to if the employers finance the training. In this way, the initiative produces the necessary incentives in the industry to incorporate local graduates to their workforce and accelerates the development of a skilled workforce, while reducing youth unemployment.
References:
http://luminous.my/graduates-enhancement-programme-for-employability-generate/
Dhakal, Subas, Verma Prikshat, Alan Nankervis, and John Burgess. 2019. The Transition from Graduation to Work Challenges and Strategies in the Twenty-First Century Asia Pacific and Beyond. https://ezproxy.aub.edu.lb/login?url=https://doi.org/10.1007/978-981-13-0974-8.
https://www.hrdf.com.my/graduate-enhancement-programme-for-employability-generate-2-0/
https://theaseanpost.com/article/who-blame-malaysias-jobless-youths
http://www.globaltalent.com.my/sponsored-programs
http://www.dailyexpress.com.my/news/133157/2-699-land-jobs-via-roadshow/
https://policy.asiapacificenergy.org/sites/default/files/11th%20Malaysia%20plan.pdf
Acknowledgement:
This good practice was kindly prepared by Ms. Victoria Mulville.
Project Details
Date: August 2, 2019