Malaysia’s ‘Critical Occupations List’: Innovative Tool in Identifying Top Future Jobs

Malaysia’s Critical Occupations List (COL):Preparing Workers for the Jobs of the Future According to the New World Bank Report

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Malaysia’s Critical Occupations List (COL) was created by the government to effectively monitor shortages and identify the country’s most in-demand skills. According to the new World Bank report, the COL is an innovative platform for keeping ahead of changing labour market demands associated with new technologies, automation, and Industry 4.0.

The Critical Occupations List (COL) is a set of occupations in demand that identifies the skills imbalance across 18 economic sectors in Malaysia. It aims to be the primary instrument to promote better coordination of human capital policies aimed at attracting, nurturing and retaining talent.

Collated on an annual basis by the Critical Skills Monitoring Committee (CSC), led by TalentCorp and the Institute of Labour Market Information and Analysis (ILMIA) under the Ministry of Human Resources (MOHR), the COL was developed based on recommended international practices. Its compilation process is based on regular consultations with the World Bank.

Because the COL is developed with the data from employers, it provides a big picture of the skills and occupations that are in demand within the industries. It also gives you a better idea of the occupations that will be prioritised by policymakers, especially in the aspects of immigration, education and upskilling opportunities.

COL will continue to expand to create a comprehensive map of Malaysia’s most demanded current and future skills and talent towards Industrial Revolution (IR) 4.0.

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Malaysia’s Critical Occupations List (COL): An innovative platform for keeping abreast of changing labor market demands for future jobs

Malaysia’s Critical Occupations List (COL) is an innovative platform for keeping abreast of changing labor market demands associated with new technologies, automation, and Industry 4.0, according to a new World Bank report Monitoring Occupational Shortages: Lessons from Malaysia’s Critical Occupations List, launched here today.

Updated and released yearly, the COL is a mechanism for coordinating human capital development policies by identifying occupations with significant labor market shortages. The government can use the COL to calibrate skills development policies to meet emerging labor market demands.

While most people would assume that skills in artificial intelligence (AI) and big data are in demand, many are not aware that traditional skills like welding are also highly sought after, said Human Resources Minister M. Kulasegaran at the report’s launch in Putrajaya.

“There are a lot of people who do not realise how important it is to acquire these skills, which are easily available in institutes under the Human Resources Ministry, ” he said, explaining that there are many success stories of those with traditional skills earning lucrative incomes.

“The Mid-Term Review of the Eleventh Malaysia Plan accords the COL a central place in Malaysia’s labor market development. By identifying labor market needs as they arise, the COL is a powerful policy tool that can be used by government, private sector, academia, job creators and job seekers alike,” said M. Kulasegaran, Human Resources Minister of Malaysia. “Our collaboration with the World Bank to create the COL was critical for its evolution into a best practice tool for labor market observation and analysis.”

The COL is updated and released yearly by the Critical Skills Monitoring Committee (CSC), led by TalentCorp and the Institute of Labor Market Information and Analysis (ILMIA) under the Ministry of Human Resources (MOHR).

“Malaysia’s experience with the Critical Occupations List shows that effective skills monitoring can help expedite the process of addressing labor market shortages. The country’s experience also has important lessons for other countries that are looking for ways to monitor skills shortages in a fast-changing labor market,” said Firas Raad, World Bank Group Representative to Malaysia and Country Manager. “We look forward to collaborating more with the Ministry of Human Resources, ILMIA and Talent Corp to help strengthen labor market outcomes in the country.”

The report also provides recommendations for future versions of the COL. The first recommendation is to consider subnational disaggregation to make the COL more robust and to cater to distinct labor market demand at the state level. The second recommendation is that government and other data providers invest in standardized occupational data to better harmonize information, making it easier to incorporate other data sources into future versions of the COL.

This publication, produced by the World Bank Group Global Knowledge and Research Hub, is part of its Malaysia Development Experience Series which aims to capture key lessons from Malaysia’s own development experience for the benefit of for developing countries around the globe as they transition into higher levels of national income and shared prosperity.

This year’s list of ‘critical’ occupations in Malaysia includes managing directors and chief executives, finance managers, and human resource managers, as analysed in the recently-released World Bank report, Monitoring Occupational Shortages: Lessons from Malaysia’s Critical Occupations List (COL).

Updated and released yearly by the Critical Skills Monitoring Committee (CSC), the COL is a mechanism for coordinating human capital development policies by identifying occupations with significant labour market shortages.

*The CSC is led by TalentCorp and the Institute of Labour Market Information and Analysis (ILMIA) under the Ministry of Human Resources (MOHR).

The government can use the COL to calibrate skills development policies to meet emerging labour market demands.

Commenting on this, M Kulasegaran, Human Resources Minister of Malaysia, said: “The Mid-Term Review of the 11th Malaysia Plan accords the COL a central place in Malaysia’s labour market development.

“By identifying labour market needs as they arise, the COL is a powerful policy tool that can be used by government, private sector, academia, job creators and job seekers alike.”

Key occupations across sectors can be found on the list, together with the top three essential skills of each occupation. View a snippet below, and refer to the full report for the entire list.

Key policies that can be tackled with the Critical Occupations List

According to the report, some potential future applications of the COL include upskilling and reskilling, employment services, and immigration.

Relating to skilling, it can inform employers of the development of technical and vocational education training, and higher education, programming; target incentives to businesses in seeking apprentices; inform employers of the development of occupational standards and accreditation, and more.

As for employment services, the COL can further improve the efficiency of job matching for retrenched and displaced workers.

Last, for immigration, having this list can further improve the responsiveness of immigration admissions decisions to economic needs faced.

How was the Critical Occupations List developed?

The COL combines a top-down and bottom-up approach, a framework developed together with the World Bank and is in line with what is practised in the United Kingdom. It is developed in three stages:

1. Top-down analysis: National level statistics are rigorously analysed to detect occupations that are sought after. In particular, the Department of Statistics’ Labour Force Survey 2011-2014 is analysed to identify occupations exhibiting high employment and wage growth, an indicator of high demand.
2. Bottom-up consultation: Results from the top-down analysis are then validated by the industry via a combination of surveys and consultations, in addition to engagements with sector regulators (eg MDEC for ICT and MCMC for telecommunications).
3. Public consultation: The COL is released publicly and is open for feedback, providing the opportunity for government agencies, employers and individuals to provide further input or evidence on sought-after occupations.

How can we benefit from the Critical Occupations List?

Understanding the specific skills that are in demand by key industries can help:

1. The government coordinate policies and prioritise publicly financed initiatives, such as scholarships, reskilling programmes or inward immigration, to enhance the supply of sought-after skills in Malaysia.
2.  The industry to go beyond business as usual in its recruiting strategy, and to explore alternative measures such as targeting Malaysians abroad and investing further in developing sought-after skills, whether through in-house training or industry-academia collaboration.
3. The general public such as parents and young talents, in selecting their course of study and career paths based on areas in demand.