KUALA LUMPUR, Dec 1 — When 26-year-old Dhanni was faced with retrenchment from his oil and gas engineering job, he decided it was time to pursue a master’s degree in supply chain management.
For Dhanni, who was among the thousands of engineers culled by oil and gas firms as a result of the global oil price rout which left a trail of devastation across the globe, news that many of his colleagues in the management side were left unscathed by the mass layoffs meant it was worth spending another year in school — not to mention a lot of money — to get a master’s degree in the business side of his field.
He felt this would give him more job security.
But Dhanni could be in for a big disappointment. While having a sterling CV with a good Master’s degree (MA) may appear to be the best way to stand out from the growing number of degree holders competing for that high-paying job, the opposite seems to be the case in today’s work market.
As the Malaysian economy decelerates at a record five-year rate, high-paying jobs have become ever more scarce.
Ironically, having an MA may even be a setback and likely dim your hiring prospects as companies view a master’s degree holder as too costly.
“(Whether or not you can get a job) depends on the asking salary... if you don’t ask too high and you were offered a VSS (voluntary-separation scheme) then yes you may be offered.
“But most of the time candidates with a master’s are asking for high salaries, usually higher than the normal market rate,” Sharon Soon, search director of headhunting firm Savant Search Malaysia told Malay Mail Online.
For MA students, this is the dilemma. Almost all postgraduates polled by Malay Mail Online say higher salary and career advancement are the top two reasons for pursuing a master’s degree.
Take 26-year-old Kuswin Kaur, an internal auditor with a multinational auditing firm, who is about to enrol for her Master of Business Administration (MBA) course at the Asia School of Business (ASB).
She thinks the master’s degree could even help catapult her onto a different career path — entrepreneurship.
High expectations, low returns
Kushwin expects no less than a 50 per cent increase of her salary once she obtains her MA, which is understandable considering postgraduates cough up at least RM65,000 on average for their master’s degrees.
“MBA modules involving Harvard Business School case studies would provide me with an edge in terms of exposure and finding solutions to real business problems in the business world.
“The fundamental business knowledge acquired and exposure would be imperative when I embark on my entrepreneurial journey in the near future… I expect a 50 per cent increment,” she said when asked what kind of salary she expects from her qualification.
But Soon pointed out that even an MBA, once considered a certain gateway to top-tier management jobs, is not worth much in a softening market. And even if companies do hire, the pay offered would likely be much lower than what applicants expect.
“MBA holders are increasing because a lot of those who were offered VSS, some of them usually get good packages like RM100,000 so they would pursue their MBA… but in terms of company offering MBA holders jobs, no”.
This is not to suggest that pursuing a master’s degree is a waste of time. Soon said despite the economic squeeze, big companies still have a preference for MA holders, only that they are limited to very niche fields like biotechnology or pharmaceutical.
But opportunities in such fields tend to be scarce. Experienced professionals in these highly specialised areas are almost guaranteed a five figure salary — up to RM120,000 annually, according to a Payscale salary index — which means they tend to stick to one place and not change jobs.
And competition for jobs among MA holders has grown exponentially in the past five years with Ministry of Higher Education data showing a five-fold increase in total number of enrolments for master’s degree courses and graduation rate.
In 2010 the number of postgraduates pursuing their MA in local varsities was around 120,000. In 2015 it grew to 630,000. This is excluding those doing their MA at private or foreign institutions.
Yet hiring growth has not caught up with the supply of both undergraduates and postgraduates, statistics from various agencies indicate.
A survey from the Monsters Employment Index, for example, showed a 23 per cent decline in overall job growth between 2014 and 2015. Jobstreet.com in its latest employment survey pointed to a downward trend in hiring, which decreased five per cent between Oct 2015 to the same period this year.
Hiring for senior managerial or middle managerial roles — positions typically vied for by MA holders — have also declined by nine and five per cent respectively. The 2016 hiring survey also showed that promotions, a key factor driving graduates to pursue an MA, is the second biggest obstacle in the job market today.
At the same time, unemployment among graduates has shot up. Jobstreet said in its report that hiring confidence dropped significantly, which goes hand in hand with the eight per cent increase in the national unemployment rate.
And a shrinking job market has caused serious wage depression, as pointed out in a special report published by Malay Mail Online in August; fewer jobs amid a bloating pool of graduates means employers have leverage to offer lower salaries.
For a fresh MA graduate, a masters isn’t likely to make any difference in terms of pay. Only qualification for a specialised field can guarantee that, although the pay will still be much lesser than most expectations, CY Wong, a senior manager consulting with headhunting firm Time Consultant, told Malay Mail Online.
“If you are a fresh graduate at least more than half the organisations out there won’t recognise (your MA). If they do, the pay difference would only be around RM250 to RM300.
“For those with say three years’ working experience, depending on the field, the difference (between a bachelor’s and masters’ holder) can go up to RM500 or RM1,000. But these are the niche ones, generally speaking (an MA) won’t mean much,” Wong said.
For employers, weak growth has strengthened the impetus for businesses to acquire the cheapest skilled hire, Datuk Shamsuddin Bardan, president of the Malaysian Employers Federation, told Malay Mail Online.
“For most jobs, employers don’t really need anyone with an MA. What’s most sought after is work experience. A degree holder with sufficient work experience is good enough to do the job,” he said.
“And in these trying times, employers would definitely prefer degree holders because they are cheaper.”
The quagmire both graduates and postgraduates are in could be symptomatic of a bigger structural problem, economists have repeatedly pointed out in the past.
Just three months ago, Khazanah Research Institute (KRI) released its “State of Household II” report expressing concerns about the country’s rising youth unemployment rate, especially those with tertiary education.
KRI noted that the unemployment rate has been steadily rising among those aged 25 to 29. It may have trended below overall unemployment before 2013, it has since exceeded the overall unemployment rate, standing at 3.5 per cent in 2015 compared with the overall unemployment rate of 3.1 per cent.
A 0.4 per cent increase meant there are at least 100,000 jobless graduates out there.
Former KRI research director Dr Muhammed Khalid, in a recent interview with Malay Mail Online, said a genuine solution is needed to rectify the problem, especially in both the education and labour sector.
“We are just not creating enough high-skilled jobs... there must be serious reform and good policies. We need to look back at our education policies, our labour policies.”