Investment in Human Capital

Column on 22nd May 2008

I WAS treated to a rare telephone conversation with my brother over the Wesak weekend.
He had just finished his final exams and must have been quite bored.

During the conversation, my mind raced to a time when I was in the same position – it was the best and the worst of times.

The best because it dawned upon me that I didn’t have to study any more if I didn’t want to.

The worst because it signified the impending entrance into the realm of being a ‘useful’ member of society; the obligation to put food on the table.

In a few months, many final year students will join the rat race, competing for the best positions in the employment market.

With supply greater than demand, competition for places is expected to intensify further.

Herein lies my first grouse.

When potential employers vet a first time candidate’s résumé, inadvertently they look out for any previous employment information.

Although the weightage given is subjective, it still contributes to a candidate’s chances of securing employment.

This is unfortunate given that internship spaces in the best companies are very limited.

A few years ago, Akademi Pemuda designed the Pemuda Internship programme (PINTAR) to provide our future graduates with trainee-work opportunities that could strengthen their résumé.

The debut programme saw 100 penultimate year students working in the best of breed companies in Malaysia.

With high retention rates and good feedback from both participating companies and students, the programme was dubbed a success.

But it was difficult to ignore the elephant in the room – what about the thousands of other potential graduates? Obviously, there was a need to intensify such programmes to ensure the majority, if not more, are given equal opportunities.

My second grouse is that during the course of the programme, several structural problems in the employment market were brought to the fore.

While academic achievement is a criterion, there were others just as important.

Good grades may indicate that theoretically, one possesses the discipline to understand what and how to do certain things.

However, according to some human resource managers we spoke with, the majority of graduates entering the job market lack confidence, proficiency in English and communication skills – in essence, the soft skills.

Recent survey data confirms that the difficulty facing 90,000 of our fresh graduates is their lack of soft skills.

The Ministry of Higher Education, realising that this is a problem, has made soft skills as well as entrepreneurship module, compulsory subjects in public universities.

These are worth two credit hours each.

But what about the private universities – and there are many.

Shouldn’t the subjects be compulsory requirement too? I personally believe the structural transformation of Malaysia’s economy over the last 50 years has been spectacular.

Malaysia had capitalised on its abundance of mineral resources and fertile lands to launch an economy based on agriculture and primary commodities.

It further moved on to a manufacturing-based, export-driven economy spurred on by high technology, knowledge-based and capital-intensive industries.

The reality is globalisation.

There are new rules to attract the world’s most highly skilled workers.

Take for example, the sovereign gates of the European Union which are opening wider.

If jobseekers can show that they’re well educated and have secured an offer of a lucrative job in Europe, they can get a twoyear renewable permit to live there.

Although this provides an opportunity for our brightest to gain experience, globalisation dictates that we have to face the same challenges for the best jobs in Malaysia.

We don’t know what the future holds, but one thing is for sure: the rules of the game are changing.

We must address the issues that are facing our graduates as a matter of priority.

We must mobilise significant resources to ensure that our students are given a playing field that is level in every sense of the word.

In the innovation economy we are living in, the differentiating factor is neither natural resources nor financial capital.

The necessary advantage is human capital.

Let’s give it the attention it deserves.