Date of Award

1-27-2026

Thesis Type

PhD

Document Type

Thesis

Divisions

Institute for Advanced Studies

Institution

Universiti Malaya

Abstract

The evolving demands of Malaysian industries for highly skilled graduates have intensified competition and highlighted a growing skills mismatch, as academic institutions struggle to align their offerings with workforce needs. Recent data from the Department of Statistics Malaysia (DOSM) shows a 4.2% rise in the number of graduates in 2023, along with a 4.3% decrease in the unemployment rate due to the recovery of the economy after the pandemic. However, youth graduates aged 24 years and below experienced a high skill-related underemployment rate, which remained at 67.0% in 2023 compared to 62.3% in 2022. Despite an increasing number of graduates, employers report difficulties in sourcing suitable talent, underscoring the urgent need for evidence-based strategies to enhance graduate employability through industry-recognised credentials (IRCs) and AI competencies. This qualitative study explores the complementary value of IRCs and AI skill sets alongside traditional degrees within the hiring process. By interviewing nine senior executives, including a former Prime Minister, from key Malaysian industries - such as technology, manufacturing, recruitment, education, politics, government, construction, and engineering, it provides policymakers with a comprehensive understanding of the graduate landscape in Malaysia, specifically within the Klang Valley. The study is framed using Spence’s (1973) Signalling Theory, Tomlinson’s (2017) Graduate Capital Model, and Pham’s (2021) Employability Agency Framework to address diverse employability factors. Interviews reveal that while industry leaders value traditional degrees for foundational knowledge, they show a strong preference for IRCs due to their precise, job-specific skills, and an increasing demand for AI-related competencies. This preference illustrates a shift towards practical, competency-based learning as crucial for bridging skill gaps in the Malaysian job market. Comparative analyses with countries like Australia, Thailand and Vietnam highlight the potential impact of strategic alignment between educational offerings and industry demand, emphasising the necessity of policy reforms. This study suggests that by integrating AI competencies and IRCs into academic curricula, Malaysian graduates can be better prepared for an evolving job market. The findings emphasise the importance of revising educational policies to future-proof Malaysia’s workforce, ensuring graduates meet not only current industry expectations but are also equipped to thrive in a rapidly changing global economy.

Initial

khm

Additional Information

Thesis (PhD) – Institute for Advanced Studies, Universiti Malaya, 2026.

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