Demand for digital skills, skill gaps and graduate employability: Evidence from employers in Malaysia

A major workforce inadequacy and the change in skill demanded have been observed due to the digital transformation. This study aims to identify the digital skills demanded by employers, focusing on exploring the skills gaps among the graduates that impact graduate employability.

A cross sectional online survey was conducted among the companies registered with the Malaysian Productivity Corporation (MPC). Demand for digital skills was assessed using descriptive analysis of mean scores of the employers' rating in digital skills at present and in future. A pair sample t-test was performed to explore the existence of skill gaps, by comparing the demand versus competencies of the graduates' digital skills in the workplace.

Of the 393 responses collected, 376 responses were used for final analysis. The findings show that the current top three digital skills in demand are "information and data literacy", "problem-solving", and "digital content creation". Whereas the top digital skills for future demand are "problem-solving", "safety", and "communication and collaboration". In addition, the most significant (digital) skill gap is found in "communication and collaboration skills" followed by "problem-solving" and "safety" skills.

These findings provide insights into the digital skills demanded by employers in IR 4.0, allowing the practitioners, education service providers and policymakers to do better planning on human capital management and training development. By focusing on identifying the current and future demand for digital skills while exploring the digital skill gaps among the graduates, this study provides insight into the employability skills required by the graduate before entering the job market.