CHAPTER 2: LITERATURE REVIEW
2.4 Hypothesis Development
2.4.1 Relationship between Employability Skills (ES) and Graduate Unemployment (GU)
In our study, we propose that employability skills and graduate unemployment hold a negative relationship between each other. When a graduate possesses stronger employability skills, the percentage of graduate unemployment will decrease in Malaysia.
In research from Hossain et al. (2018), they proved that change in employability skills leads to a significant change to fresh graduates' unemployment where majority of the fresh graduates’
respondents admit that they are lacking in employability skills, and it brings impact towards their unemployment situation.
Furthermore, Hanapi and Nordin (2014) conducted a semi-structured interview to interview seven respondents on lecturer as well as employers who have relevant knowledge and awareness on the phenomenon of graduate unemployment in Malaysia. Throughout the interview, most of them supported the concept that employability skills and technical skills are important criteria to get jobs. Unemployment issues are driven by the lack of employability skills and technical skills among graduates. Moreover, most of the graduates are facing issues in communication skills especially the English language, leadership skills and lack of discipline behaviours bring negative affection to graduates' marketability as well as their competency to be a competitive worker.
H1: There is a significant negative relationship between employability skills and graduate unemployment in Malaysia.
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2.4.2 Relationship between Quality of Education (QE) and Graduate Unemployment (GU)
In this study, we believe that there is a negative relationship between quality of education and graduate unemployment. The lower the quality of education, the higher the graduate unemployment rate.
Olawe (2019) found out that the quality of education is increasingly deteriorating as the rate of graduate unemployment rises. According to Tahlin and Westerman (2020), the recruitment criteria vary depending on the individual skill level. They are specifically asked to emphasise the importance of education as the foundation for their decision-making. If the graduates were less talented, less knowledgeable, and did not have the employability skills, they would not have a good performance in the workplace. Therefore, graduates must receive a good quality education to improve themselves.
According to the research from Hossain et al. (2018), their respondents agreed with the statement that they are less knowledgeable in their field of study. Mismatches between education and skills and the labour market affect educational investment, job satisfaction, salaries, and job mobility.
To guarantee that the program is acknowledged by all parties, the applicability of a study field given by educational and training institutions should satisfy the current requirements of the employer or the job market. As a result, the employer should work with educational institution parties to provide knowledge about the educational environment. When the quality of education becomes better, graduates will become more knowledgeable and cause graduate unemployment to decrease.
H2: There is a significant negative relationship between the quality of education and graduate unemployment in Malaysia.
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2.4.3 Relationship between Job Expectations (JE) and Graduate Unemployment (GU)
According to certain studies, there is a positive connection between job expectations and graduate unemployment. A survey from Bernama (2015) shows that 60% of fresh graduates desire an RM3,500 starting wage for their first job, while 30% want a salary of up to RM6,500 to live comfortably. Employers were asked why it is so difficult to employ fresh graduates. Fresh graduates want an unreasonable salary and benefits, according to 68% of interviewers.
According to Cannata et al. (2021), ABC News statistics reveals that 30% of university graduates are still unemployed four months after finishing their education, and 15% are still unemployed four years later. The problem with the majority of jobless youngsters is not a lack of talents, but rather a lack of professional ethics and attitudes. Furthermore, spoiled attitudes and excessive expectations are frequently the most significant barriers to employment for many unemployed graduates. According to FMT Reporters (2018), the top five reasons employers polled by Job Street in its 2018 study do not recruit fresh graduates include graduates' unreasonable expectations of wages or benefits: choosy about positions or businesses, weak character, attitude, or mentality and so on. According to the above, higher job expectations will result in a higher graduate jobless rate.Job expectations (JE) and graduate unemployment have a positive relationship.
H3: There is a significant positive relationship between job expectations and graduate unemployment in Malaysia.
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2.4.4 Relationship between Market Demand (MD) and Graduate Unemployment (GU)
From Shahriar et al. (2021)’s findings, the low demand and huge supply of graduates in the labour market causes the graduates unemployment with the methodology of in-depth interviews, telephone interviews with experts and focused group discussion.
In the research from Tengku et al. (2019), the researchers have used the in-depth interview in order to obtain the relationship between the market demand and graduate unemployment phenomena in Malaysia. They found that the unstable economic situation in which decreased market demand is one of factors that causes graduate unemployment to rise. Therefore, the higher the market demand, the lower the graduate unemployment
H4: There is a significant negative relationship between the market demand and graduate unemployment in Malaysia.
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