Labour market remains challenging in 2021


CONTINUOUS collaborations of all parties are required to alleviate the unfavourable circumstances as Malaysia’s labour market is expected to remain challenging in 2021.

According to Department of Statistics Malaysia’s recent report, while 2020 had been a tough and unprecedented year, it had also given industries the opportunity to re-examine business models and venture into new areas.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin noted that some businesses had increased adoption of digitalisation, while others had resolved to flexible working arrangements.

“However, some businesses may find digitalisation more challenging due to the existing operational structure and lack of technical competencies, especially the micro, small and medium enterprises (MSMEs),” he said in a statement yesterday.

The adoption of technology through smart business partnership is one of the mechanisms to escalate MSMEs’ economies of scale, which is pertinent ensuring continuous support for them in adoption of digitalisation.

In return, this can create more skilled jobs that will cater for the growing number of skilled labour supply.

Despite the Movement Control Order, which was reintroduced on Jan 13 this year, most business activities have been allowed to continue operation with strict standard operating procedures.

“On the supply side, the number of employed persons declined 0.6% year-on-year to 15.16 million persons, while unemployment rate increased to 4.8%, resulting in 761,000 unemployed persons in the fourth quarter of 2020 (4Q20),” the chief statistician said.

During the same period, labour force participation rate declined 0.6 percentage points to 68.5% against 69.1% in 4Q19.

Hence, the number of outside labour force went up by 3.6% to 7.32 million, with more than 40% due to education reasons.

The number of jobs in the private sector edged down by 2.4% to 8.46 million.

Out of the total jobs in 4Q20, filled jobs comprised 97.9% or 8.28 million.

Meanwhile, jobs openings, which can be reflected by the number of vacancies, recorded a rate of 2.1%.

The number of vacancies fell by 22,000 compared to 4Q19 to record 176,000 vacancies.

Mohd Uzir said the slower labour demand in 4Q20 was also reflected by the smaller number of jobs created at 17,000, largely in the semi-skilled category.

“As Malaysia’s economy contracted 3.4% in 4Q20, labour productivity per employment continued to post a decreasing trend, registering -2.9% to RM23,570 per person.

He elaborated further that the preliminary numbers based on the average of quarterly labour force statistics indicated that employed persons recorded a marginal increase to 15.1 million persons, while number of unemployment edged up to 711,000 persons.

This was attributed to a 4.5% spike in the unemployment rate against an average rate of 3% recorded during the pre-crisis period.

The year 2020 had also observed a softer labour demand by private sector’s businesses, with 73,000 jobs created, down by 31,000 from 104,000 jobs created in 2019.

Read our previous report here

761,000 persons unemployed in 4Q20