How vocational training fits into Malaysia’s high-skilled ambitions — and the challenges ahead

How vocational training fits into Malaysia’s high-skilled ambitions — and the challenges ahead Vocational and technical training is gaining ground in Malaysia among students and their parents. But companies need to play a bigger role – and salaries need a bump, say experts and those who have chosen that path. SINGAPORE: After completing his Malaysian Certificate of Education (SPM), the equivalent of Singapore’s O Levels, Malaysian Nur Adham Syamsuzzaman opted for a technical and vocational path instead of going to university. “I chose this route because I prefer practical, hands-on learning experiences as compared to memorising theories. I also don’t think I am academically inclined,” said the Johorean, 24. Between 2020 and 2023, he obtained his Malaysian Skills Certificate (SKM) and got a diploma in welding. He began working as a welding inspector a year ago. “My family was sceptical about it at first but became more receptive after they saw that I could build a career in the field,” said Nur Adham, who now lives in Selangor. There were also opportunities for him to progress through upskilling and gain experience across different workplaces, he said. More young Malaysians are taking the same path as Nur Adham as the country’s technical and vocational education and training (TVET) system takes steps to equip them for future-oriented fields such as artificial intelligence. The number of new TVET entrants has increased by about 30 per cent from around 176,000 in 2023 to more than 230,000 in 2025, according to Azmir Mohd Yunus, head of the National TVET Council’s secretariat. The total number of students enrolled in TVET institutions rose from about 400,000 students to nearly 460,000 over the same period. The proportion of SPM and equivalent school leavers entering the TVET system also increased from 44 per cent in 2023 to 57 per cent in 2025. The government is targeting a total TVET enrolment of 650,000 by the end of this year, said Deputy Prime Minister Ahmad Zahid Hamidi, who is chairman of the National TVET Council Committee. "We are aiming for TVET to become the first choice for students, while recognising that academic pathways continue through public and private higher education institutions, with TVET focusing strongly on meeting the demands of the national labour market," Zahid told reporters on Jun 5 at a National TVET Day 2026 event. That same month, Malaysia launched TVET 2.0 with a stronger focus on emerging fields like cryptology and renewable energy. TVET also covers more traditional fields ranging from automotive and electric work to culinary arts, hospitality, fashion and design. Prime Minister Anwar Ibrahim said up to RM50 million (US$12.3 million) from the country’s High-Impact Programme fund, which is under the Skills Development Fund Corporation, could be used to strengthen TVET 2.0’s implementation. Industry players said employers see an increasingly important role for technically trained workers in Malaysia. TVET training must become more responsive to what employers actually need, and offer students clear pathways to better-paying jobs and career progression, they said. “Malaysia has made considerable progress in elevating TVET but the next stage must be about quality, relevance and industry ownership rather than simply increasing the number of programmes or graduates,” said Malaysian Employers Federation (MEF) president Syed Hussain Syed Husman. FROM "SECOND CHOICE" TO FIRST? In Malaysia, technical and vocational education have long been perceived as the “second choice” for students – as well as their parents – compared to going to university. This is similar to some other countries including Singapore and the United States, where college degrees are seen as the path to white-collar jobs that typically pay more than blue-collar ones. “Like many people, my family and friends regarded a traditional university degree as the safest route,” said Muhammad Faeez Abdul Halim, 30, a TVET graduate who got his diploma in precision machining at Penang Skills Development Centre (PSDC) in 2017. “But I told them that there were good job opportunities in the industrial sector and that employers often prefer TVET graduates over university graduates for their practical skills,” he told CNA. That perception has not entirely disappeared even as the government has sought to raise the prestige of TVET, experts said. Arulkumar Singaraveloo, chief executive of human resource consultancy Malaysia HR Forum, said that while interest has grown, it has “not fully become a mainstream first choice”. TVET has also yet to attract high-performing school leavers, he added, due to concerns over employment prospects, career progression and social recognition persisting among students and parents. Malaysia has 1,996 TVET institutions nationwide, according to the government’s TVET portal. They include 897 public institutions, 44 under state governments and statutory bodies and 1,055 private institutions registered under the Department of Skills Development. The institutions include vocational colleges, polytechnics, community colleges and skills training institutes. But amid reports that some university graduates are also facing job insecurity as AI reshapes hiring and work processes, training providers said they are seeing signs of attitudes gradually shifting. PSDC chief executive officer Hari Narayanan said it is receiving more enquiries about TVET from both school leavers and their parents, although the shift has not been dramatic. “Most of the students are from the B40 category who want to learn but at the same time earn a living,” Narayanan said, referring to the bottom 40 per cent of households by income. Penang-based training provider PSDC offers programmes where 70 per cent of training takes place within companies, allowing students to gain experience while receiving an allowance. Universiti Kuala Lumpur British Malaysian Institute (UniKL-BMI) has observed a similar shift. “Students are not simply looking for a qualification, they are looking at where that qualification can take them,” said the TVET provider based in Selangor, which also offers some technical education programmes across bachelor’s, master’s and doctoral levels. Based on its observations, UniKL-BMI said that youths and their parents are considering factors such as employment prospects, professional certification, salary potential and industry exposure. This makes technical pathways in areas such as semiconductors, electrical and electronics and digital technologies more attractive, it said. Among employers, perceptions of TVET qualifications have “improved significantly” as companies face difficulties recruiting workers with the practical skills needed, said Syed Hussain of the employers federation. “For many employers, a key consideration is no longer whether a candidate holds a university degree or TVET qualification, but whether the individual possesses the competencies required to perform the job effectively,” he said. In fields such as manufacturing, electrical and electronics, mechatronics and automation, a TVET graduate could have a “distinct advantage” because of their hands-on training and exposure to workplace practices, Syed Hussain added. The push for vocational training is also closely linked to Malaysia’s broader industrial ambitions. The government has stepped up efforts on TVET in recent years, including through the establishment of the National TVET Council in 2020 to strengthen coordination. Under Budget 2026, RM7.9 billion was allocated to TVET, up from RM7.5 billion the previous year. Malaysia’s New Industrial Master Plan (NIMP) 2030 launched in September 2023 also identifies expanding TVET programmes for high-skilled jobs in critical sectors. TalentCorp, an agency under Malaysia’s Ministry of Human Resources, identified 66 critical occupations where demand is high and vacancies are relatively difficult to fill, said Azmir of the National TVET Council. They include industrial and production technicians, mechanical engineering technicians and welders, as well as data and cybersecurity professionals. Under the National Semiconductor Strategy, Malaysia aims to train and upskill 60,000 highly skilled local engineers by 2030. Malaysia’s “renewed emphasis” on technical and vocational education reflected an economic reality that the country has “reached the limits of a growth model built on low-cost labour”, said Kumaran Nair Shanmugam, head of vocational education and training at the Malaysian-German Chamber of Commerce and Industry. “Malaysia has been an upper-middle income economy since the early 1990s yet it has not crossed into the high-income status, and closing that gap now depends on moving into higher-value industries,” he told CNA. The availability of skilled local workers is one of the factors companies consider when deciding where to locate major investments, Kumaran said. That is why ensuring a credible TVET system could improve Malaysia’s competitiveness, he added. FROM A SUPPLY-DRIVEN TO INDUSTRY-DRIVEN TVET Despite strengthened government support for TVET, observers and industry players said the system can be improved by being more industry-driven. Malaysia’s current TVET model remains too supply-driven, said Wan Chang Da, a professor at the School of Education at Taylor’s University Malaysia. It still “largely follows a higher education model”, where training institutions determine the programmes offered and their curricula, he said. "Although (institutions) will say that there is industry input, the industry (players) are usually just taking an advisory role, not directly involved in the development of the students,” Wan said. This differs from a demand-driven TVET, where industries and businesses are directly involved in recruiting students, determining the curriculum, training and, finally, hiring them. The Malaysian Employers Federation agreed the country needs to move to an “industry demand-driven model”. “Employers should be involved directly in curriculum development, equipment selection, assessment, internships and certification,” said Syed Hussain. “Students should spend meaningful periods learning in actual workplaces rather than receiving predominantly institution-based training.” Industry participation should go beyond signing memoranda of understanding, while TVET instructors also need continuous exposure to industry as technologies and workplace requirements evolve, he said. In some fields, technology can change faster than accreditation and programme reviews, institutions said. For instance, PSDC is working to keep its training aligned with the needs of Penang’s increasingly advanced and automated manufacturing sector. “The requirements are changing … (The) industry would now prefer a junior technician or a trained assembler to step into the manufacturing environment with some level of technical preparation,” Narayanan of PSDC said. The demand for mechatronics and automation skills is also increasingly being complemented by requirements in data analytics, sensors, the Internet of Things and AI, he added. Yet, introducing new technologies too early to students may come at the cost of technical fundamentals, he said. In precision machining, for example, AI-enabled capabilities could develop computer numerical control programmes automatically. But “what we do not want is students to use these tools blindly without understanding the fundamentals and, importantly, without having the ability to question what AI is giving them,” Narayanan said. There is room to learn from the experiences of other countries, industry insiders said. Kumaran of Malaysian-German Chamber of Commerce and Industry said Singapore “stands out as a regional benchmark” with a “strong system linking technical education with workplace learning and industry participation”. One example is the Work-Study Diploma offered by Singapore’s Institute of Technical Education (ITE), a post-secondary institution. Under the programme, employers deliver about 70 to 80 per cent of the curriculum through on-the-job training, while students remain employees of the partner companies and work towards their diploma. Unlike Malaysia’s TVET model which involved 12 ministries, the Ministry of Education (MOE) has overall responsibility for post-secondary vocational training in Singapore. “Although the structure and model is quite similar, the engagement with industries is much closer and stronger than in Malaysia,” said Wan of Taylor’s University, adding that Malaysia's TVET system is “more complex” than Singapore’s. Outside Southeast Asia, Germany offers an example of employers taking direct responsibility for vocational training. Under its dual vocational training system, apprentices usually divide their time between companies and vocational schools, with employers directly involved in developing the workers they want to hire. “The German dual system works for one fundamental reason: (The) industry does not merely advise on training, it runs it,” said Kumaran of the Malaysian-German Chamber. But Kumaran noted Germany’s model “rests on decades of strong employer associations, unions and cultural buy-in”, and said the dual model only works when the “workplace side is as strong as the classroom side”. For Malaysia, “the key question now is delivery: How effectively we translate that ambition and funding into training that is genuinely driven by industry mindset and produces the skills employers actually need,” he said. The government acknowledged that much of Malaysia’s TVET system remains institution-based. Azmir of the National TVET Council described this as a “structural challenge” as students are mainly trained within TVET institutions, with industry players entering the picture only through internships or industrial training. “The next step is to move beyond internships towards much stronger workplace-based TVET, particularly apprenticeship programmes where a substantial part of the learning takes place within a company and leads to a recognised vocational qualifications,” he said. Apprenticeships currently account for only around 3 to 4 per cent of Malaysia’s total TVET enrolment, according to data from the TVET Council. Expanding workplace-based learning is hence one of the major shifts under TVET 2.0, Azmir told CNA. “The long-term objective is not to replace institution-based TVET. It is to create a better balance, where institutions and industry share responsibility for developing Malaysia's skilled workforce,” he said. Getting more companies involved in TVET remains an obstacle, however, with participation among Malaysia’s small and medium-sized enterprises (SMEs) remaining limited. Narayanan suggested introducing incentives to help more SMEs participate, while the Malaysian Employers Federation suggested having simpler administrative arrangements. TVET graduates and institutions also say clearer economic payoffs will further boost the appeal of vocational training. “I think the starting salary for TVET graduates can be better,” Adham told CNA. “If a young Malaysian invests additional time and effort to obtain a recognised TVET certificate but enters the labour market at a salary that is not meaningfully different from an SPM leaver, it becomes difficult to demonstrate the economic value of that additional competency,” said UniKL-BMI. The average starting salary for 90 per cent of TVET graduates is around RM2,000, DPM Zahid said last year. This amount is less than 20 per cent higher than Malaysia’s statutory minimum wage of RM1,700 per month. There have been signs of improvement. Among graduates from bachelor’s-level TVET programmes, the proportion earning RM2,001 or more a month rose from 45.7 per cent in 2020 to 76.9 per cent in 2025, according to the Graduate Tracer Study data, an annual survey by Malaysia’s Ministry of Higher Education to track graduates’ employment status and career outcomes. PSDC said its graduates typically enter the workforce on monthly base salaries of around RM2,200 to RM2,500, depending on the company and role, with allowances potentially paid on top of that. Arulkumar of Malaysia HR Forum said young people must see clear opportunities to advance to specialist, supervisory, engineering and management positions if technical education is to become a more attractive long-term proposition. TVET graduate Faeez agreed. After getting his diploma, he worked at a manufacturing firm for about a year before pursuing a bachelor’s degree in mechanical technology at Universiti Malaysia Perlis. He is now back where he started: At PSDC, albeit as an instructor. Taking the TVET route, he said, has not only taught him to operate machinery. “It has given me a specialised lifelong profession where I can continuously solve problems and guide others to do the same,” he said.