Malaysia’s shift to an economy based on high productivity and knowledge production has brought higher quality growth in the country. However, such shifts have created shortages in the labor market. To identify these shortages and monitor skills imbalances, the government of Malaysia has established the Critical Skills Monitoring Committee (CSC) which has published the Critical Occupations List (COL) since 2015.

As Malaysia’s labor market shortage list, the COL seeks to identify shortages in occupations that are sought-after by employers in the country and to help policymakers make decisions for targeted investments in human capital.

It is currently used as a source of labor market intelligence and information by many stakeholders including policy makers, training and higher education institutions, jobseekers and students. Malaysia’s COL also serves to inform immigration policy and is also used to inform the development of courses of study to meet industry demands. Looking ahead, the COL has the potential to help adapt workforce development policies to perform better in Industry 4.0 by increasing the responsiveness of upskilling and reskilling programs, improving the efficiency of the job-matching process for displaced and retrenched workers, and enhancing the responsiveness of immigration admissions decisions to economic needs.

However, the COL still faces challenges, but these are not unique to it. These serve as key lessons for other countries seeking to implement shortage lists.

• Shortage lists should weigh the pros and cons of regional disaggregation
• Shortage lists should invest in standardized occupational data

Malaysia’s experience in establishing COL offers several general lessons for other countries who are currently exploring tools to monitor skills shortages. These include:

• Shortage lists are a useful tool for monitoring labor market shortages, and they are particularly critical now as new technologies disrupt labor markets.
• Shortage lists should be updated regularly and improved continuously, should be based on rigorous evidence, and should be transparent. Governments can take advantage of new data sources, such as online job postings, to create lists that are up-to-date and include detailed information about skills requirements.
• Shortage lists should be developed by a specialized agency but should incorporate evidence from public and private sector

Excerp from Monitoring Occupational Shortages, World Bank- Sep, 2019

WHAT skills do you need to become a sought-after employee in Malaysia's current labour market?

Well, according to the Critical Occupations List, what's in demand are communication skills, English language proficiency and problem solving expertise. The country is also in need of more electric and electronic engineers, early childhood educators, finance managers, chemists, manufacturing professionals and software developers among others.

The 2018/2019 Critical Occupations List (COL) highlights 59 middle- and high-skilled occupations that are sought-after, strategic and in high demand.

The COL keeps abreast of changing labour market demands associated with new technologies, automation and Industry 4.0. It was developed by agencies under the Human Resources Ministry and in collaboration with the World Bank. On Sept 12, the World Bank released its "Monitoring Occupational Shortages: Lessons from Malaysia’s Critical Occupations List” report, a case study of the COL.

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.

“Many Malaysians treat these skills as a last-choice job. This is a mindset that has to change, ” he said.

Kulasegaran said the ministry has suggested that the government provide special incentives and training for such skills in the upcoming budget.

The COL is updated and released yearly by the Critical Skills Monitoring Committee which is jointly chaired by human capital development agency TalentCorp and the Institute of Labour Market Information and Analysis under the Human Resources Ministry. It was created in 2015 to identify labour market shortages.

"The Mid-Term Review of the 11th Malaysia Plan (2016-2020) accords the COL a central place in Malaysia’s labour market development, ” said Kulasegaran.