One in Three Malaysian Graduates Is Working Below Their Qualification
In the third quarter of 2025, skill-related underemployment — degree and diploma holders working in low- or semi-skilled jobs — stood at about 1.96 million people, roughly 35.5% of employed degree and diploma holders. Graduate unemployment is low; graduate underemployment is the real risk, and it is heavily influenced by what you study and what you do alongside it.
By Degreemate Editorial · Education research teamPublished Updated 3 min read
The scary statistic students hear is graduate unemployment. It is the wrong statistic to be scared of.
According to the Department of Statistics Malaysia, unemployed degree holders numbered about 91,500 and unemployed diploma holders about 74,400 in the reported period, within a labour force of 17.49 million in 3Q2025. Overall unemployment held steady at around 3%. Malaysian graduates, on the whole, find work.
The number that should shape your decisions is different: skill-related underemployment. In 3Q2025 it stood at about 1.96 million people — roughly 35.5% of employed degree and diploma holders working in low- or semi-skilled jobs. In 2024, DOSM recorded 1.60 million graduates employed below their qualifications.
Put plainly: the risk is not that you will have no job. It is that you will have a job your qualification did not need.
What actually drives it
Four things, none of them mysterious:
Field, not level. Some fields have direct occupational demand; others produce more graduates than the roles that specifically require them. The degree is the same length either way.
No practical exposure. DOSM's own graduate data shows most employed graduates are in skilled occupations — the ones who are not are disproportionately those with no internship, no part-time work history and no portfolio.
Location. Skilled roles cluster. A graduate unwilling or unable to relocate faces a much thinner market.
Qualification inflation without differentiation. Malaysia had 5.98 million graduates in 2024, up from 5.74 million the year before. A degree that once distinguished a candidate now often only qualifies them to be compared.
What this means for a decision you make after SPM
It does not mean "don't study". It means the choice of what and how matters more than the choice of whether.
Prefer fields with an occupational licence or named demand. Healthcare, engineering, accountancy, teaching, skilled trades and technical fields tie the qualification to a role. That link is what protects against underemployment.
Treat TVET and diplomas as competitive options, not fallbacks. A skilled trade with a licence has a tighter link between qualification and work than many degrees do. That is the whole point of the SKM and TVET route.
Build the record while you study. Internship, part-time work, one real project, one certification. The graduates who move into skilled roles are the ones who arrive with evidence.
Check demand before you enrol, not after. Every career page on this site names typical entry routes, salary bands with their sources, and a demand outlook. Read the outlook before the brochure.
The honest counterpoint
Underemployment statistics describe a market, not a person. Plenty of graduates in "oversupplied" fields do well, usually because they did something specific alongside the degree. And a first job below your qualification is common and not permanent — the median monthly wage for formal-sector employees reached RM3,167 in late 2025, and wages have continued to grow.
The purpose of the number is not to frighten you out of studying. It is to stop you from treating any qualification as automatically sufficient.
Three questions before you commit to a programme
- What job does this specifically qualify me for, and how many of those exist in Malaysia?
- What will I have to show at the end besides the certificate?
- If demand in this field halves, what else does this qualification let me do?
If you cannot answer all three, use the plan builder to compare the programme against two alternatives before you register.
Statistics are from the Department of Statistics Malaysia labour force and graduate releases covering 2024 and 3Q2025, as reported in 2025–2026.
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Frequently asked questions
- What is skill-related underemployment?
- It describes workers holding a degree or diploma who are employed in low- or semi-skilled jobs. In 3Q2025 it covered about 1.96 million people, roughly 35.5% of employed degree and diploma holders.
- Does this mean a degree is not worth it?
- No. Graduate unemployment is low and skilled employment is the majority outcome. It means the field you choose and the evidence you build alongside the qualification matter more than the qualification alone.
- How do I reduce my risk of underemployment?
- Choose a field with a direct occupational link, complete an internship, keep a documented record of practical work, and check the demand outlook for the specific occupation before enrolling rather than after graduating.
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