MALAYSIA must accelerate reforms to align higher education with industry needs after official figures revealed that almost one-third of graduates are employed in jobs that do not match their qualifications, highlighting persistent structural weaknesses in the country's labour market.
The issue was raised in Parliament by Deputy Human Resources Minister Datuk Seri Abdul Rahman Mohamad, who said graduate underemployment remains a significant challenge despite continued improvements in the country's overall employment performance.
He said the government is responding through a comprehensive strategy involving closer collaboration between industry, educational institutions and relevant ministries to ensure graduates possess skills that meet evolving market demands.
According to the Department of Statistics Malaysia (DOSM), the Graduate Statistics 2024 report recorded an underemployment rate of 31.9 per cent among degree holders, meaning nearly one in three graduates are working in semi-skilled or low-skilled occupations despite holding tertiary qualifications.
Abdul Rahman said the mismatch reflects structural changes in the labour market rather than simply a shortage of employment opportunities, as technological advances and changing industrial requirements continue to reshape demand for specialised skills.
To narrow the gap, he said the Human Resources Ministry is expanding Technical and Vocational Education and Training (TVET), strengthening industry partnerships and introducing programmes designed to improve graduates' employability in high-value sectors.
He added that the government is also encouraging employers to participate more actively in curriculum development so that academic programmes better reflect current workplace requirements.
The ministry is working alongside other government agencies to develop a workforce equipped for industries such as advanced manufacturing, the digital economy, renewable energy and semiconductor production, sectors identified as key drivers of Malaysia's future economic growth.
Abdul Rahman said efforts are also focused on increasing opportunities for graduates to gain practical industry exposure through apprenticeships, industrial training and work-based learning before entering the job market.
Responding to concerns over graduate employment prospects, he stressed that improving job quality is as important as increasing employment opportunities, with the government aiming to create more high-skilled, higher-paying positions capable of retaining Malaysian talent.
“The government remains committed to ensuring that graduates acquire the knowledge, technical competencies and practical skills required by industry, while strengthening collaboration between employers, educational institutions and relevant agencies to improve graduate employability,” he said.
He added that continuous reforms to Malaysia's education and training ecosystem are essential to ensure graduates remain competitive in an increasingly technology-driven global economy while supporting the country's transition towards high-income and knowledge-based industries. - July 3, 2026
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