The Future of Workfor the Asian Youth&RXQWU\3URȴOH0DOD\VLD
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Contents
1. Introduction

1

2. Malaysian Youths

4

Demography ................................................................................................................................................. 5
Geographical Distribution ............................................................................................................................ 5
Education Attainment ................................................................................................................................... 6
Labour Force Participation ........................................................................................................................... 7
Unemployment ............................................................................................................................................. 9
Preferred Education of Young People ........................................................................................................ 10

3. Future of Work

13

Job Market in Malaysia ................................................................................................................................ 13
SME Landscape and Employment .............................................................................................................. 15
The Shift to Remote Work and Education .................................................................................................. 17
The Rise of Gig Work ................................................................................................................................... 18

4. Challenges for Malaysian youths

20

Brain Drain ................................................................................................................................................... 20
Digital Poverty ............................................................................................................................................. 20
Social Protection for Gig and Self-employed Workers .............................................................................. 21
Unemployment, Underemployment and Wage Stagnation of Graduates ............................................... 21

5. Policy Recommendations

26

IntroductionΖQWURGXFWLRQ

1. Introduction
The much discussed “future of work” is now the reality that has been accelerated by the COVID-19 pandemic
here in Malaysia. The pandemic has exposed government, employers and workers to both the opportunities andthreats of the future of work, and spur a greater conversation on how the future of the Malaysian economy willtake shape. A research conducted by McKinsey(2020) highlighted that Malaysia and many ASEAN economies are
now vulnerable to disruption due to high concentration of labour intensive manufacturing and service jobs. Andamong these jobs, over 50% of the tasks for these occupations could be automated. This will in turn leave the
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Malaysian workforce. Based on McKinsey’s projection, there could be up to 4.5 million jobs displaced by automation by 2030.1~50% of work time in Malaysia is spent on repetitive
activities that are highly automatable
Automation
Potential by
Activity, %

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total working~50% ofhours
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Figure 1: Malaysian’s workforce work activities
Source: McKinsey, 2020

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3.3 - 6.0 million new jobs are expected to be created by 2030.
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Figure 2: Expected job creation by 2030
Source: McKinsey Report 2020
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Malaysian
Youths0DOD\VLDQ<RXWKV

2. Malaysian Youths
7KHΖQWHUQDWLRQDO/DERXU2UJDQLVDWLRQGHȴQHV\RXWKVDVWKHDJHVHJPHQW2, while the Youth SocietLHVDQG<RXWK'HYHORSPHQW$FWGHȴQHV\RXWKVDVWKHDJHVHJPHQW3. The document will refer
to youths as those who fall within the 15-30 age bracket unless stated otherwise.

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Male

FemaleTotal

15 - 191468.31367.42835.7

20 - 24

1649.11483.53132.625 - 29

1729.61518.13247.730 - 34

1503.31374.22877.5

Total

6350.35743.212093.5

Table 1: Total youths based on gender
Source: DOSM, 2021
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Geographical Distribution

5

States15 - 19

20-24

25-29

30-34

Total

Malaysia



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37%

Johor



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

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35%

Kedah

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36%

Kelantan

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37%

Melaka

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37%

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Sambilan

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37%

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Pahang

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Pulau Ninang

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W.P. Labuan

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34%

W.P. Putrajaya

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27%

Table 2: Malaysian’s youth geographical distribution by respective state and age bracket
Source: DOSM 2021
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Education Attainment
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Table 3: Education Attainment of Youths in Malaysia(%)
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Young workers by skill group and education
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Figure 3: Young workers by skill group and education6
Source: KRI 2018
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Source: ISEAS, 2020

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Figure 4: Labour Force Participation by Gender (2007 to 2019)
Source: ISEAS,20207
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Unemployment
Age Group

Total

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Female

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Table 5: Heterogeneity of youths who are not in education, employment of training, 2018 (%)
Source: UNESCAP,20208%DVHGRQERWK7DEOHDQG7DEOHDERYHWKHRYHUDOOXQHPSOR\PHQWIRUWKH0DOD\VLDQODERXUIRUFHVLWVDW
2IWKRVHZKRDUHXQHPSOR\HGDUHWHUWLDU\HGXFDWHGZKHUHDVRQO\DUHSULPDU\HGXFDWHG+RZHYHU\RXWKXQHPSOR\PHQWLQ0DOD\VLDLVDWDVWDJJHULQJEDVHGRQ)LJXUHEHORZ
7KLUW\VHYHQSHUFHQWRIXQHPSOR\HGPDOH\RXWKVDUHPRUHOLNHO\WREHDFWLYHO\ORRNLQJIRUZRUNFRPSDUHG
WRIHPDOH\RXWKV)RUWKRVHZKRGHFLGHWROHDYHWKHZRUNIRUFHIHPDOH\RXWKGRPLQDWHVWKLVVSHFLȴFFDWHJRU\DVGHFLGHWREHIDPLO\FDUHUV
18%
16%
14%
12%
10%
8%
6%
4%
2%

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0%

30-34

)HPDOH

Figure 5: Youth Unemployment Rate by Gender
Source: ISEAS,2020

8

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Figure 6: Unemployment Rate, by gender, area and age group
Source: ISEAS,2020)URPWKHJHRJUDSKLFDOGLVWULEXWLRQVWDQGSRLQWIHPDOH\RXWKVLQUXUDODUHDVDJHGEHWZHHQDQG
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Preferred Occupation of Young Workers
Current and preferred occupation of young workers
Occupational Type

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100

100

Figure 7: Current and preferred occupation of young workers
Source: KRI (2018)

10

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11

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3. Future of Work
:KHQLWFRPHVWRWKHIXWXUHRIZRUNDVSHFWVVXFKDVDUWLȴFLDOLQWHOOLJHQFH $Ζ DXWRPDWLRQDQGURERWics have been prominent among the market leaders to accelerate their growths. While certain jobs will
be lost, many others will be created and changed. With the Covid-19 pandemic, the conversations andadaptation of said aspects have been accelerated even further.9

Job Market in Malaysia
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GHFUHDVHGE\FRPSDUHGWRWKHSUHYLRXV\HDUIURPWKRXVDQGWRWKRXVDQGMREVFUHDWHGSHU
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(‘000)

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Numberof Jobs

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Figure 8: Jobs, Filled Jobs and Vacancies, Q1 2018 - Q4 2020
Source: DOSM, 2021

9

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Figure 9: Labour Demand by Skill, Q4 2020 (% Share)
Source: DOSM, 2021

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14

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Q4 2020

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5.4%

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thousand
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15.4%

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thousandvacancies

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thousandjobs created

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Figure 10: Labour Demand by Economic Activity, Q4 2020 (% Share)
Source: DOSM, 2021

SME landscape and employment
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ActiveDigitalisation

Basic
Digitalisation
59%

SMES
Large
Companies

77%
23%

Advanced
Digitalisation
23%

20%
80%

18%

25%
75%

Figure 11: Digitalisation of SMEs and Large Companies in Malaysia
Source: YCP Solidiance, 2020
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16 <&36ROLGLDQFH  $FFHOHUDWLQJ<RXU'LJLWDO7UDQVIRUPDWLRQ$UH0DOD\VLDQ&RPSDQLHV*HDUHGWR'LJLWDOLVH"
17 +XDZHL7HFKQRORJLHV  $FFHOHUDWLQJ0DOD\VLDQ'LJLWDO60(V(VFDSLQJWKH&RPSXWHUL]DWLRQ7UDS5HWULHYHGIURPKWWSVZZZ
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The shift to remote work and education
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IRXQGWKDWXSWRRIZRUNHUVZRUNIURPKRPHDVEXVLQHVVHVZHUHKDOWHGZKHUHLWLVSURPLQHQWDPRQJ
VWDQGDUGZRUNHUVRUHPSOR\HHV UHFHLYHUHJXODUZDJHVPDNLQJXSWRRIWRWDOHPSOR\PHQWLQ0DOD\VLDGXULQJ )RUVHOIHPSOR\HGLQGLYLGXDOVRQO\ZHUHDEOHWRZRUNIURPKRPHDVVKRZQLQ)LJXUH
DQGΖWZDVDOVRLQGLFDWHGWKDWDV0DOD\VLDQ\RXWKVDUHWHFKQRORJLFDOO\DZDUHWKH\KDYHWKHDELOLW\WR
DGDSWEHWWHUDQGTXLFNHULQWRWKHGLJLWDOZRUOG

1.4%

Longer working hours

4.3%

Leave & half-pay

7.4%

1RH΍HFWV

10.9%

Leave & no-pay
Lost job

16.2%

Shorter working hours

16.2%
43.7%

Work from home





Per total respondents)LJXUH(΍HFWVRI&RYLGWRZDUGVZRUNHUVLQ0DOD\VLD
Source: DOSM, 2020
Longer working hours

39.3

Leave & half-pay

30.9

1RH΍HFWV

25.1


1.1

23.8

46.6


3HUWRWDOUHVSRQGHQWVE\HPSOR\PHQWVWDWXV :RUNIURPKRPH/HDYH SDLG-REORVV&KDQJLQJKRXUV/HDYH XQSDLG
1RLPSDFW)LJXUH6KDUHRI&29Ζ'H΍HFWVE\HPSOR\PHQWVWDWXVHVLQ0DOD\VLD20
Source: DOSM, 2020

19 %HUQDPD  <RXWKDGDSWLQJZHOOWRQHZQRUPDODPLGVW&29Ζ'SDQGHPLF5HWULHYHG0DUFKIURPKWWSVZZZDVWURDZDQLFRPEHULWDPDOD\VLD\RXWKDGDSWLQJZHOOQHZQRUPDODPLGVWFRYLGSDQGHPLF
20 'HSDUWPHQWRI6WDWLVWLFV0DOD\VLD  5HSRUWRI6SHFLDO6XUYH\RQ(΍HFWVRI&29Ζ'RQ(FRQRP\ ΖQGLYLGXDOȂ5RXQG17)XWXUHRI:RUN

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0&2WKHUHZDVDFORVXUHRIDOOSUHVFKRROVJRYHUQPHQWDQGSULYDWHVFKRROVLQFOXGLQJGDLO\VFKRROVUHVLGHQWLDOVFKRROVLQWHUQDWLRQDOVFKRROVWDKȴ]FHQWUHVDQGRWKHUSULPDU\VHFRQGDU\DQGSUHXQLYHUVLW\LQVWLWXWLRQVDVZHOODVFROOHJHVDQGLQVWLWXWLRQVRIKLJKHUOHDUQLQJ7KHJRYHUQPHQWKDVVWHSSHGLQWRDVVLVWZLWKWKHWUDQVLWLRQWRRQOLQHHGXFDWLRQZLWKLQLWLDWLYHVVXFKDVWKHLPSOHPHQWDWLRQRIKRPHEDVHGWHDFKLQJDQG
OHDUQLQJ 3G35 FODVVHVSLORWSURMHFWVIRUPRELOHGHYLFHRZQHUVKLSLQYROYLQJVWXGHQWVLQVFKRROVDQGDOOGD\HGXFDWLRQDOWHOHYLVLRQ'LGLN79.30:KLOHQRZPDQ\HGXFDWLRQLQVWLWXWLRQVDUHRSHQHGZLWKVWULFW6WDQGDUGRI3URFHGXUHV 623V DQGUHVWULFWLRQVRQOLQHHGXFDWLRQVWLOOUHPDLQVDVSDUWRIWKHLPSRUWDQW
HOHPHQWZLWKLQWKHHGXFDWLRQV\VWHP

The rise of gig work
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LVH[SHFWHGWREHZRUWK50ELOOLRQJOREDOO\7KHJLJHFRQRP\WHQGVWRDWWUDFWPRUH\RXWKVRIWR\HDUVROGZLWKDQGWR\HDUVROGZLWKΖQ0DOD\VLDLWLVHVWLPDWHGWKDWRIWKHWRWDOZRUNIRUFHIRUPSDUWRIWKHJURZLQJJLJHFRQRP\ZLWKDQRXWORRNIRUGUDVWLFJURZWKZLWKDJURZWKIURPWRHYHQEHIRUHWKHSDQGHPLF:LWKMXVWHKDLOLQJGULYHUVDORQH0DOD\VLDKDVLQGLYLGXDOVHPSOR\HG6HYHUDOLQLWLDWLYHVZHUHLQWURGXFHGE\WKH0DOD\VLDQJRYHUQPHQWWRHPSRZHUWKHJLJHFRQRP\
WRRVXFKDVLQFHQWLYHVLQYROYLQJJLJZRUNHUVȇZHOIDUHLQWKH3HQMDQDSDFNDJHZRUWK50PLOOLRQDPDWFKLQJJUDQWRIXSWR50PLOOLRQIRUJLJHFRQRP\SODWIRUPVWKDWFRQWULEXWHWRWKHZRUNHUVWKURXJK6RFVRDQG(3)ȇVL6DUDDQDQG50PLOOLRQIRU0'(&ȇV*OREDO2QOLQH:RUNIRUFH */2: SURJUDPPHVΖQDGGLWLRQWKHUHLVDIRFXVRQHQKDQFLQJIUHHODQFLQJFDSDELOLWLHVRIJUDGXDWHVLQWKHJLJHFRQRP\YLDWKH0LQLVWU\RI
+LJKHU(GXFDWLRQȇV1DWLRQDO(FRQRPLF5HIRUP3ODQ 3HQMDQD &DUHHU$GYDQFHPHQW3URJUDPPH .37&$3 
Working age population
Outside labour force

Labour force
Employed

Unemployed

By status in employment (‘000)
Agriculture sector
Non-agriculture
sectorInformal sector





1,440.4

10.9%

1

Employer

Employee

Own-accountworker2,859.2

Unpaid family
worker



1RWH
&RPSRXQG$QQXDO*URZWK5DWH &$*5 IURPWRZDVDSSOLHG
WRHVWLPDWHWKHQXPEHURIHPSOR\HGSHUVRQLQLQIRUPDOVHFWRUIRU

3RWHQWLDO*LJ:RUNHUV

Figure 14: Labour Force Statistics in Malaysia
Source: DOSM, 2018

21 0LQLVWU\RI(GXFDWLRQ  +RPHEDVHGWHDFKLQJDQGOHDUQLQJ 3G35 0DQXDO5HWULHYHG0DUFKIURPKWWSVZZZPRHJRYP\PXDWWXUXQODLQODLQPDQXDOSGSGLUXPDKPDQXDOSGSGUȴOH
22 'DLP1  30ODXQFKHV'LGLN79.305HWULHYHG0DUFKIURPKWWSVZZZQVWFRPP\QHZVJRYHUQPHQWSXEOLFSROLF\SPODXQFKHVGLGLNWYNSPQVWWY
23 /HH&+  7HPSRUDU\HPSOR\PHQWWKHQHZHFRQRP\5HWULHYHG0DUFKIURPKWWSVZZZWKHVWDUFRPP\QHZVHGXFDWLRQWHPSRUDU\HPSOR\PHQWWKHQHZHFRQRP\
24 'HSDUWPHQWRI6WDWLVWLFV0DOD\VLD  *LJ:RUNHUVLQ0DOD\VLD$5HYLHZRI'HȴQLWLRQDQG(VWLPDWLRQ5HWULHYHG0DUFK
IURPKWWSVGRVPJRYP\YXSORDGVȴOHVB1HZVOHWWHU1HZVOHWWHU'260B0%/6BB6HULHVSGI
25 1HZ6WUDLWV7LPH  *LJHFRQRP\DQHZIRUFHIRUJURZWK5HWULHYHG0DUFKIURPKWWSVZZZQVWFRPP\RSLQLRQOHWWHUVJLJHFRQRP\QHZIRUFHJURZWK

18

Challenges for
Malaysian youths

&KDOOHQJHVIRU0DOD\VLDQ\RXWK

4. Challenges for
Malaysian youth
Brain drain
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WRKHDGDEURDGIRUEHWWHURSSRUWXQLWLHV$VVRFLDWH3URIHVVRU'U1RUL]DK0RKG0XVWDPLOWKHKHDGRI8QLYHUVLWL0DOD\DȇV'HSDUWPHQWRI%XVLQHVV3ROLF\DQG6WUDWHJ\  KDVDOVRFODLPHGWKDWWKHODFNRIFDUHHUSURVSHFWVLQ0DOD\VLDIXUWKHUHQODUJHWKHLVVXHRIEUDLQGUDLQDVWKHGRPHVWLFMREPDUNHWLVGHVLJQHGPRUH
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1XUWXULQJ([SHUW7DOHQWDQGZRPHQSDUWLFLSDWHGLQWKH&DUHHU&RPHEDFN3URJUDPPH2WKHULQLWLDWLYHVVXFKDV6NLOOV0DOD\VLDSURJUDPDQGDOORFDWLRQRI50ELOOLRQLQUHVNLOOLQJDQGXSVNLOOLQJSURJUDPVLQWKH
%XGJHWDUHDLPHGWRQRWMXVWXSVNLOOWKHJUDGXDWHVEXWDOVRVHUYHVDVDQLQFHQWLYHIRUWKHPWRFRQWLQXHZRUNLQJLQ0DOD\VLDDigital poverty:KLOHERWKEXVLQHVVHVDQGHGXFDWLRQDUHWUDQVLWLRQLQJLQWRWKHGLJLWDOVSDFHWKHUHDUHVWLOOEDUULHUVZKHQLWFRPHVWRFRQQHFWLYLW\DQGDFFHVVWRGLJLWDOLQIUDVWUXFWXUHV$UHFHQWVXUYH\E\WKH0LQLVWU\RI(GXFDWLRQ
0DOD\VLD  UHSRUWHGWKDWRQO\RIVWXGHQWVKDGSHUVRQDOFRPSXWHUVIRUWDEOHWVIRUODSWRSVDQGIRUVPDUWSKRQHVZKLOHRIWKHVWXGHQWVGRQRWKDYHDVPDQ\GHYLFHVΖQVWDWHVVXFKDV6DEDKRQO\RQHRXWRIWZRVWXGHQWVKDYHDFFHVVWRVXFKGLJLWDOLQIUDVWUXFWXUHWRVXSSRUWWKHLURQOLQH
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26 )LWFK6ROXWLRQV  0DOD\VLD&RXQWU\5LVN5HSRUW
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29 5DKPDQ$5-DVPLQ$) 6FKPLOOHQ$  7KH9XOQHUDELOLW\RI-REVWR&29Ζ'7KH&DVHRI0DOD\VLD

20

&KDOOHQJHVIRU0DOD\VLDQ\RXWKSocial protection for gig and self-employed workers
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(PSOR\HHV3URYLGHQW)XQG (3) %DVHGRQDVXUYH\GRQHE\7KH&HQWUHPRUHWKDQKDOIRIWKHUHVSRQGHQWVDFFRXQWLQJXSWRGRQRWKDYHHPHUJHQF\VDYLQJVDQGUHWLUHPHQWVDYLQJVΖQDGGLWLRQGRQRWKDYH
KHDOWKFDUHLQVXUDQFHDQGZHUHQRWLQVXUHGIRUZRUNSODFHLQMXU\$VWKHZDYHRIGLJLWDOLVDWLRQLVJRLQJWRJURZWKHUHZLOOEHPRUH\RXWKVSDUWLFLSDWLQJLQIUHHODQFLQJRUJLJZRUN&RXSOHGZLWKWKHXQFHUWDLQWLHVFUHDWHGGXULQJWKLVSDQGHPLFVRFLDOSURWHFWLRQIRUJLJDQGVHOIHPSOR\HGZRUNHUVLVPRUHLPSRUWDQWWKDQ
HYHUWRNHHSHYHU\RQHSURWHFWHGOHDYLQJQRRQHEHKLQG
100%
90%
80%

RIWRWDO

70%
60%
50%
40%
30%
20%
10%
0%
(PSOR\PHQW
LQMXU\
LQVXUDQFH+HDOWKFDUH
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VDYLQJV

5HWLUHPHQWROGDJHVDYLQJV

8QHPSOR\PHQW
LQVXUDQFH

Figure 15: The possession or participation of gig workers in protection schemes.
Source: The Centre, 2020

Unemployment, Underemployment and Wage
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Unemployment Rates of Graduates, andE\4XDOLȴFDWLRQ
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Source: Ministry of Higher Education and Bank Negara Malaysia estimates, 2016
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Figure 17: Unemployment Rates of Graduates by Monthly Family Income Brackets
Source: Ministry of Higher Education and Bank Negara Malaysia estimates, 2016

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Figure 18: Real Minimum Monthly Basic Salary for Employees Recruited Without Prior Working Experience (2010 and 2018)
Source: Bank Negara Malaysia estimates using data from MEF Salary Survey for Non Executives and Executives
2010 and 2018 published by Malaysian Employers Federation

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Policy
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Enforcing social protection for gig and self-employed workers
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Providing hiring and upskilling incentives for companies to battle against brain drain,
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