KUALA LUMPUR, Dec 12 — Up to 95 per cent of today’s young graduates are overqualified for their current jobs while 50 per cent work in low-skilled non-manual occupations, Khazanah Research Institute’s latest school to work transition survey (SWTS) found.

The report, released this evening, said many young qualified workers are forced to "dumb down” and accept inferior forms of employment relative to their levels of education or skills.

This has serious ramifications for the economy, KRI said in its analysis of the data. Talents go to waste while the low pay hinders potential productivity and spending.

"Over-educated young people are likely to earn less than they otherwise could have and are not making the most of their productive potential,” the SWTS report stated in its summary of findings.

"Not only do the skills mismatch signify wastage of human resources but they also put into question the view often expressed in the media that youth are ‘choosy’ about jobs — they should not be considered ‘choosy’ if they are doing jobs below what they are educated or trained for.”

Many of the overqualified workers are in what KRI categorised as "elementary occupations” followed by clerical support jobs and craft and related trade work, registering at 95, 64 and 59 per cent respectively.

KRI said the findings underscore the deeper structural problem that beleaguers the job market today, where supply of graduates far exceeds demand, industries continue to prefer cheap labour and mismatch in skills and requirements is widespread thanks to a backward education policy that puts too much focus on paper qualifications.

Mismatch in jobs and qualification is among key outstanding problems that the SWTS data gathered from the interview with thousands of stakeholders, over half of them young workers with tertiary qualifications.

Despite young workers considering their levels of education and fields of study very useful to their current jobs, data showed a clear disconnect between qualification and employment.

For example, a fourth of those with qualifications in science, mathematics and computing prefer jobs in information technology, but only 17 per cent are actually in those jobs.

There is also an inverse effect in that those who pursue a certain skills eventually end up wasting their qualification to work in non-related industries.

For example, only 13 per cent of those with engineering, manufacturing and construction qualifications polled in the survey admitted that they want construction jobs and up to 80 per cent have gone on to find other non-related work in different industries.

‘Cable’ or ‘network’ still useful

The mismatch also extends to recruitment methods, the SWTS found.

While young job seekers go through more modern platforms for recruitment like hiring agencies or online adverts, employers surprisingly continue to depend on primitive methods, including preference for personal networks or family and friends — the who-knows-who.

This, KRI said, opens up opportunities only to well-connected applicants, usually from privileged backgrounds, and penalise poorer but qualified job seekers whose social networks tend to be small or limited to the same class.

"Informal recruitment channels may have cost-saving advantages but tend to penalise job seekers from disadvantageous backgrounds who have limited social networks and also to restrict the selection pool of employers,” the report said.

Informal networks like relatives and friends of employees or employers were listed as the second and third most preferred choices for recruitment by employers, the first being online advertisements.

Young workers also listed family and friends as the second most preferred choice in seeking employment while job hunters rely on public employment service, job fairs and interviews primarily.

The SWTS, conducted at the end of 2017 and beginning of 2018, was intended to collect education and labour market information on youth, defined as ages between 15 to 29.

The survey was based on five structured, mainly pre-coded questionnaires targeting youth in upper secondary schools, in tertiary education, young job seekers, young workers and employers.