Corporate Talent Needs and Availability in Malaysian Service Industry

This paper explores perceived gaps between corporate needs and the availability of skills and attributes among the talent pool of the Malaysian services sector. In Phase I of the study, 169 human resource managers from service companies were surveyed. They were asked to indicate (1) the importance of skills, competencies and characteristics for the service workforce, and (2) the ease of recruiting those with such work skills and talents. In Phase II, focus group sessions and interviews were conducted with 37 Malaysian managers, yielding a qualitative summary of industry needs and talent pool shortages. Findings indicated a gap between industry needs and the availability of important competencies within the pool of prospective workers. Individuals with competencies in communication, information technology and customer relationship management, and those with high motivation and career commitment were most sought by service industry employers.


Introduction
Expansion of the global services sector has been constant and unprecedented over the past two decades.The service sector has been driven largely by a growth of per capita incomes, advances in information and telecommunications technology, the emergence of global production networks, vertical specialisation and exponential growth of offshore outsourcing (Hummels, Ishii and Yi, 2001;Chen, Kondratowicz, and Yi, 2005;Amador and Cabral, 2009).Some analysts predicted that by 2020, services will account for 50% of world trade (Dicken, 2007;Ohmae, 2005).
Nowhere has this growth been more dramatic than in Malaysia, where the production-based economy of the past is shifting rapidly to a knowledge-based, service-focused paradigm (Cheng, 2001;Abdullai, 2004;Muhammad, Char, Yasoa and Hassan 2010), particularly in the priority areas of business and professional services, distributive trade (wholesale, retail, hotels and catering), construction, education and training, healthcare, tourism, logistics and ICT and telecommunications (MITI, 2009).Notwithstanding the effects of the global economic slowdown, the services sector continues to provide the largest contribution to Malaysia's GDP, at approximately 54.3% (Treasury Malaysia, 2008), and has remained as the leading generator of jobs, accounting for more than half of total employment since 2007 (Bank Negara Malaysia, 2008).With a business-friendly policy framework, strong infrastructure, and a well-educated multi-lingual workforce, Malaysia has ranked high as an attractive location for international services outsourcing (Bontis, Chua and Richardson, 2000;Kadir (2007); ATKearney, 2009 andHamzah et al 2010).
Nevertheless, human capital shortfalls are becoming increasingly apparent within the service industry not just in Malaysia, but world-wide.Roadblocks to the acquisition of suitable personnel have emerged as the greatest barrier to growth in both developed and emerging markets (Economist Intelligence Unit, 2007).Vedior (2008) reported that 61% of Asia Pacific businesses in the services sector reported serious difficulty in sourcing talent.This has placed an increasing burden on service organisations with regard to the management of human capital.Cheese (2010, p.4) noted that: "Retaining and attracting the talent businesses need will require focus and energy on employee value propositions, with greater flexibility to attract increasingly diverse talent." Based on these notions, this study aimed to identify corporate talent needs of the service companies and to quantify gaps between what is available and what is required within the current labour pool of young, well-educated service professionals.We utilized both mail questionnaire and interview to collect data to examine the availability of needed skills for Malaysian service industry.

The Service Sector Talent Crunch
Early predictions of global skills shortages in the services sector (Dennis, 1998;Kimmerling, 1986;Tweedt, 1967 andMajumdar 2011) have become a reality.Difficulties in talent acquisition and retention have been highlighted in a succession of industry white papers (PricewaterhouseCoopers, 2006;Manpower, 2008a;Vedior, 2008) and academic studies (Aghazadeh, 1999;Hitt, Hoskisson, Harrison and Summers, 1994;Raman, Budhwar and Balasubramanian, 2007;Kotzian, 2009).Ready and Conger (2007) reported that, "at most multinationals, a host of problems in recruiting and developing talent are converging to create a perfect storm -a crisis that could derail the company's growth strategies".Service industry human resource shortages were ubiquitous, restricted neither to a specific geographic region nor to any specific field of technology (Barr and Tessler, 1997;Roy, Tiwari, Shah and Hadden, 2006).
Acute difficulty in talent acquisition and retention has impacted the service industry business environment in Asia.Despite access to more than 50% of the global population, improved physical infrastructure, rapid educational progress and several of the world's fastest emerging economies, Asian businesses frequently report problems finding enough people with the skills they need.According to a study by the Economist Intelligence Unit (2007), 600 Asian chief executives in a range of industrial sectors ranked the shortage of qualified workers as their biggest concern in China and South-East Asia.Manpower (2008a) conducted a broad international survey involving approximately 37,000 Asian employers, and found that 41% had problems in finding the right person for the right job.
Reasons for the scarcity have been examined from various perspectives.To a degree, it stems in part from the rapid growth of the services sector itself to the resulting over-demand for skilled workers (Lockwood and Ansari, 1999;Mattoo 2001).At the same time, however, a general reluctance on the part of young, well-educated workers to embrace new career directions in retail (Commins and Preston, 1997;Broadbridge, Maxwell and Ogden, 2007;Bradley and Devadason, 2008) and other service environments (Anwar and Sam, 2008;Raman et al., 2007) has also been noted.This has been attributed to perceptions that retail and services environments have traditionally offered poor employment conditions (Broadbridge, 2003;Tannock 2004), stressful work (Elangovan, 2001;Lo and Lamm, 2005), ineffective execution of downsizing activities (Hitt et al., 1994;Hitt et al., 2009), and recruitment strategies that have not reached the widest possible candidate pool (Gibson and Cook, 2001;Bonoli and Hinrichs, 2010).
There were numerous discussions related to these group of young, well-educated and talented professionals, referred as "Generation Y", "Internet Generation", "Nintendo Generation", "Millennials", "Echo Boomers", and "Generation 2001" (Zemke, Raines, and Filipczak, 2000;Donnison,2005;Chennault 2010;Maier, nd), making up a large population of the service industry employees.According to Downe, Ho and Loke (2008), these group of professionals are often characterized as those who are "strongly motivated by interpersonal networks; tend to carry their own values and work priorities into the workplace; much less likely to respond to traditional command-and-control management styles."At works, they are however viewed as asset to organizations due to their collective action, optimism, tenacity, heroic spirit, multitasking capability and technological savvy.At the same time, they are the liabilities to organizations because of their needs for supervision and structure, as well as inexperience, particularly with handling complicated people issues (Zemke, Raines, and Filipczak, 2000;Donnison, 2005).
These highly educated professionals also prefer more opportunities for development, autonomy, flexibility and meaningful work (Hiltrop, 1999;Schooley, 2005).Unfortunately, because of their high sensitivity towards performance feedbacks and strong motivation toward reward system, they have been labelled as those with high attrition that creates difficulty for supervisors particularly in the services-oriented environment.These characteristics of the young, well-educated professionals have in some ways led managers in the service industry towards a paradox.On one hand, the expansion of globalization has created boundless prospect for the business growth and development, but on the other hand, recruiting the right person, for the right job is becoming more arduous (Downe, Ho and Loke, 2008).The increased workforce challenges have been witnessed.Many parties have even held the current educational system responsible for the reason of the scarcity.Schools and universities have been unable to keep up with talents skills supply as a result of the economic expansion that to certain extend has transformed the type of skills needed by business (Yen et al, 2001;Syrett and Lamminman, 2004;Johnson and McGregor, 2006;The Economist, 2007).Learning and understanding how to attract and retain these people are fundamental in talent management.

Employers' Needs and Availability Gap: Talent Essential Skills
The improvement of modern technology and growth in management innovation has led to a demand for a wider range of workplace skills and expectations for more proficient skill performance.Employers and policymakers throughout the service industry have commented on the need for 'generic skills' such as problem solving, teamwork and communications (Stasz, 1997;Frogner, 2002).Often, recruiting companies are scouting for talents who can offer not only solid technical expertise but being business savvy at the same time (McGee, 2001;Frogner, 2002;Schooley, 2005).A study by PricewaterhouseCoopers (2006) has also disclosed executives' painful scarcity for talented yet tech-savvy candidates who are cooperative, innovative and able to manage changes.Talents essential skills gap from the perspective of their personal and interpersonal skills, customer relationship skills and technical skills are among agendas that are constantly bothering the managers of the service sectors.
Personal and interpersonal skills from talents are the basic skills required by employers across all industries, be it sales and marketing, consulting, logistics, banking, or even IT industry.One of the most demanding skills among talents is communication skills, both writing and speaking (McQuaid, 2006).The ability to use English proficiently and to relay or convey the right information and message is valuable for organizations (Boyle, et. al., 2001;ACCI/BCA, 2002).Sadly, other than being the most demanding skills, communication often the top skills that are seen lacking (Gush, 1996;Morgan, 1997;Stasz, 1997;Owen, 2001;Sneed and Morgan, 1999;and Yen et. al., 2001;Frogner, 2002;Hagie, 2006).
Following to communication skills, individuals' capacities for critical thinking, rationale reasoning, and problem solving skills, are important but is seen lacking among young talents (Stasz, 1997;Yen et. al., 2001;Natale and Ricci 2006).Self-motivation (Owen, 2001) and ability to work independently (Yen et. al., 2001;ACCI/BCA, 2002); consistent commitment to integrity, honesty and ethical conduct (Boyle, et. al., 2001;ACCI/BCA, 2002); as well as loyalty and willingness to make career commitment to the firm (ACCI/BCA, 2002), are among essential skills that highly appreciated by managers.However, their availability is once again, dubious.
Practical skills related to customer relationship skills are crucial in service industry.Boyle et al. (2001) found that the ability to work effectively with customers is the basic skill for any entry-level position (U.S Department of Labour, 2009).Talents' awareness and competence towards customer relationship practices, their drive to ensure client satisfaction at every opportunity, and their consistent standards towards high quality services play an important role in customers' satisfaction.Although these characteristics are the cream of the commercial aptitude for the service-oriented industry, the skills gap among these young, well-educated professionals in this industry is missing.Lack of these operational knowledge have caused industry managers not to shortlist them as their recruitment targets (Martin and Chapman, 2006).
The global swift into the technological era have created ample job opportunity and therefore requiring more talents equipped with the suitable technical, information technology (IT) or software skills.Regrettably, the percentage of people in the workforce possessing those high technological skills continues to decline sharply (Hilltrop, 1999).There is a strong need for IT skills such as ERP, EDI and project management tools; as well as knowledge and skills in implementation, operation and maintenance of IT projects (Yen et al., 2001;Gallagher et al, 2010).Despite the fact that entry-level employees with technical, IT or software skills seem easier to be recruited, talented programmers who are much more productive than average developers, are rare (Barr and Tessler, 1997).Wrong talents' perception on the types of IT skills needed, in comparison to industry's requirements in this area has contributed towards the increase in skills scarcity in the industry, particular for IT services industry (Medlin, et. al., 2007).

Samples and Sampling Procedures
This study was targeted towards human resource managers from various service-oriented organizations in Malaysia and is conducted in two phases.Phase I included a quantitative method whereby mail surveys together with a self-address return enveloped were sent out to randomly selected services-based companies.These companies were from three major services business directories: MDeC list of MSC-registered firms, CCAM, and Malaysia Logistics Directory 2006/2007.Survey questions comprised of company demographic profiles and questions related to skills competencies and characteristics that they consider most important among young, well-educated professionals, versus work skills and talents that were most challenging to employ were asked.Companies were also asked to indicate their preferences to participate in Phase II of the study.A total of 2500 questionnaires were mailed-out.169 completed questionnaires were collected.Out of these respondents, 13 of the managers have volunteered to participate in the Phase II of the study.In Phase II, interviews were conducted to expand besides validating the results from mail survey related to the industry needs and talent pool shortages.

Variables and Measures
Variables used in the study were derived from the literature measuring talents skills from the perspectives such as: Personal and Interpersonal skills, Customer Relationship skills, and Personal skills.Using the 6-point Likert scale, managers were asked to rate how important of each of the attributes for the young, well-educated customer/client-facing professionals in their organization from 1 = not important at all to 6 = extremely important.Upon rating the importance of each of the attributes, managers were also asked to rate the how readily can these attributes be found in the Malaysian talent pool from 1 = extremely difficult to find to 6 = extremely easy to find.
Phase II utilised a set of questions in collecting data to complement the survey data collection such as "How do you perceive the new generation of service industry professionals in Malaysia?","What are the skills that they posses which you personally find useful/ appealing/ contributing to the company?", and "What do you think are the skills, which are most of the time lacking in them?".Interview sessions were unscripted and interpreted as qualitative data.Representative quotes were identified and utilized to introduce or underscore findings reported in this paper.

Respondents Profile
As shown in Table 1, majority of the respondents from this study represents the sales, trading and marketing based companies (27.2%), followed by business consultation (13%%) and software solution providers (11.8%).Participants of this study also include managers from the banking and finance industry, telecommunication, logistics/ warehousing, hospitality and business consultation based companies.There were only 4 participants work in insurance companies and 5 participants were involved in training and development companies (2.4% and 3.0% respectively).About 76% of these companies are small-medium in size hiring less than 500 employees in their organization, while the remaining respondents represented the medium size companies (500-1000 employees) and large size companies (more than 1000 employees) (12% each).Approximately half of these companies are employing 60 percent or more employees with age between 23 to 32 years old.Most of the respondents were managers and executives (38.7% and 37.5% respectively) followed by directors of the companies (11.9%) (see Table 1) 4.2 Employers' Needs vs. Talents' Availability: Young, Well-educated Professionals'

Talent Gap
Using the paired samples t-test, a comparison of each participant's paired ratings on their expectations and perceptions on skills and attributes among talent pool within Malaysian services sector were assessed.Results showed that there were higher expectations than perceptions from all paired attributes: (1) personal and interpersonal skills, (2) customer relationship skills, and (3) technical and IT skills.While items of expectation received strong agreements on the needs of the talent attributes with means ranging from 4.79 to 5.37 out of six, items for the perception of talent availability have means ranging from 2.94 to 3.63.This indicates that talent pool within service industry still needs to be improved to reach the employers' expectations level.These talent attributes related to skills that include: strong communication skills (mean difference = 2.25); desire to ensure customer satisfaction (mean difference = 2.03); unfailing standard and dedication towards quality service (mean difference = 2.10); commitment to integrity, sincerity, and moral conduct (mean difference = 2.04); and self-motivated and independent work attitude (mean difference = 2.13).Table 2 presents the descriptive summary of the findings and results of disparity of the young talent attributes perceived by managers in the services-based organizations (See Table 2).

Personal and Interpersonal Skills
Qualitative findings through managerial interviews were consistent with survey results.Managers pointed out that talents with good personal and interpersonal skills are difficult to source, and the most important skill that are lacking among these young, well-educated service professional is communication skills.This is similar to the findings by Gush (1996); Morgan (1997); Stasz (1997); Owen (2001); Sneed and Morgan (1999); and Yen et. al. (2001).The inabilities to get a message across with high proficiency of English language are often the main topics brought up by the managers.Low level of English language proficiency among these young, well-educated professionals might be due to the fact that other language medium such as Malay and Chinese Languages are used in schools.The vernacular school system emphasizing on several different language mediums hinders their efforts to master the English Language (Merican, 2008).The managers commented that: "We do not expect them to have perfect English, but at least they are able to get their messages across... but they are not!" "Their English language is very average or below average."

"They don't have a very concrete idea on what they want, they will tell you briefly and you have to lead them to further details until they will tell you more...They do not know how to put their ideas into words"
Self-motivated employees that can work independently are highly sought after by employers.However, there was a notable high level difficulty in finding young, well-educated services professional with these attributes.Instead, managers believed that the "spoon-fed" culture from education curriculum has limited the talents' self-determination and self-reliance.Such observation is consistent with findings from Mustapha (1999) and Ng et al. (2005).As cited in the Malaysian Strategic Research Centre (1994) and Mustapha (1998), Ng et al. (2005) suggested that "…the mainstream teaching and learning processed lacks the substance to produce self-regulated learning… a great number of Malaysian Students are actually passive learners and spoon-fed learners."This justifies the lack of self-motivation and initiative among these young graduates: "Nowadays, they are being spoon-fed during their study time... Some of them, I see them being professional in having good capability in handling task, but what happened was whenever there is a simple task given to them, they wait for further guidance..." "We need experienced project leaders and managers who can take responsibility... in timely fashion and with quality delivery... we want one that can take ownership of project... meeting its milestones and targeted deadline.""They are lack of the ability to take responsibility and act accordingly" "Perhaps only about 10% of them are interested to find out more, the rest are waiting to be told." In this study, a lack of loyalty and willingness to make a career commitment to the firm was found among this group of young and well-educated service professionals.The managers anticipated that these workers are prone to leaving their jobs especially they find better offers elsewhere.This finding is consistent to previous study (Khatri et. al, 1999).Khatri et al. noted that the new generation of workers are more materialistic or having a strong motivation towards reward system, and they tend to hop from one job to the other for a few extra dollars.As some of the managers suggested: "For most of the youngsters, the very first thing that they will be looking into is salary, then (they will) only look at the future of the job.But as fresh graduates, they should focus on learning rather than money.For example, we are having almost 15%-20% of attrition every year, the common reason that they will give is a better offer in pay in so and so company..." "The Job Hopping Trend... seems a biggie to the employee, they can job hop from one to another to get the higher price and another to get a even higher price.""A lot of them are working for 1 year then they will hop to another job, and so, to increase their profile.""If I asked for bit more patience, softness and long working hours, they'll quit." The study revealed that critical thinking, reasoning and problem-solving skills are very much needed in the service industry.Managers however felt that this group of young graduates' intellectual developments are not up to their expectations.This is because these graduates are often found to have limited scope of thinking, questioning ability, and decision making potential.This can largely due to the passive learning education system as suggested by Mustapha (1998).According to Albon and Jewel (2007), passive learning in education curriculum can affect critical thinking capability in two ways: (1) Teaching pedagogy that encourages a culture for rote memorization, bounds the potential for expansion of critical assessments; and (2) Showing humility, obedience and respect to those who are more senior or those in professional roles (i.e.teachers) as a part of a common Asian culture, that discourages students to question or challenge one's assumptions pushes the continuous expectation for passive learning approaches.Some of the managers in this study commented as follows: "They are not thinking out of the box and are limiting their understanding and concepts within a confined boundary." "People can judge you by the questions that you asked... Some questions that they ask are useless and wasting my time!They can actually do a research by their own or they can come out with their own solution given the time or if they have their own initiatives to initiate their own finding, because there are a lot of minor questions when they keep begging for answers even if they can do it by themselves.""They will first ask their supervisors before making any decisions and do not dare to make their own decision most of the time.Even for simple task, they will wait for their supervisor's 'green light'."

Customer Relationship Skills
Customer relationship skills were ranked as the important characteristics that employers sought-after and characteristics in which employers have difficulty in finding.Surprisingly, during the managerial interview, there was little discussion on customer relationship skills as compared to personal and interpersonal skills characteristics.It seems that the customer relationship skills gaps are not viewed as the top priorities for skills gap to service industry managers.Some managers perceive customer relationship skills are strongly related, if not similar, to communication skills.A manager noted that young graduate nowadays is rather weak in handling complicated people issues: "They are also lack of PR skills especially when it comes to managing relationship with people including customers.They do not know the right approach/words to be used when they are speaking or writing.They speak according to what they feel like."

Technical/IT Skills
In survey, IT and technical skills are rated as the least important attribute and graduates with such skills are the easiest to find.Findings from interviews in relation to the importance and the readiness of supply of workers with the necessary Technical or IT skills vary dependent on the perceptions from managers involving in IT or non-IT related business.From the non-IT related industry perspective, employers are found to be satisfied with their young talents' technical knowledge know-how as indicated by one of the managers: "Their technological understanding is useful, especially for this fast moving telecommunication world."However, managers from the IT related industry perceived otherwise.They found that it is difficult in getting the right trained candidate that equipped with current technology and skills.According to Johnson and McGregor (2006) and the Economist (2007), the inability of schools/ university in equipping students with the latest technology causes the non-competitive graduates.Also, the lack of collaborations between the schools/universities and industry can result in introducing syllabus and programmes that are not well-demanded by the markets (CPPS, 2006).Some of the managers in this study commented as follows: "They are not catching up with the technology unless asked to..." "They are lack of technological skills and there is a big IT skill gap between graduates from the local private and the public university graduates."

Conclusion
This study aimed to examine the corporate talents needs and its deficiency towards what is available in the employment market.Exploration of gap analysis from both quantitative and qualitative results have revealed almost similarly.Lack of essential skills among young, well-educated professional were determined in the following areas: communication and language; self-motivation and work-independence; willingness to make a career commitment to the firm; critical thinking, reasoning and problem solving; customer relationship skills; and technical or IT skills.To a certain extent, the results were also consistent with Asian as well as global trend.Reasons of the gaps pointed out generally were enrooted from two major angles.First of which is related to the educational gaps derived from the passive learning teaching pedagogy and lack of market driven curriculums.
Secondly, the confined Malaysian or Asian culture topped up with the Gen-Y characteristics gave cultivating a group young, well-educated professional who are humble, obedient and thus not used to thinking critically; but at the same time having strong motivation towards reward systems.

Practical Implications and Suggestions
Based on the results, some practical implications can be drawn and suggestions can be made to the industry, government and policy makers.These implications are addressed under proposals at both the macro and micro level.
Since many of the talents skills deficiency issues originated from the education system, important initiatives should start from the government and policy makers point.Immediate changes from the educational perspective are primarily necessary in order to prepare the talents to enter the talent pool.The time to replace the outdated passive learning teaching pedagogy has arrived.Gone are the days where the spoon-feeding is necessary.Students should be allowed to explore, be encouraged to question and speak out, and at the same time, be free to participate actively in the knowledge-seeking process.The education in place should egg on students to not only work in teams but build up their self-motivation and self-discipline in goal-setting and goal-attaining processes.On top of changing the educational teaching method, the next agenda to eradicate future talent skills shortage is nonetheless, the restructuring of the education curriculum.The industry have identified that the current curriculums especially from the aspect of technical/IT, for the talents are lack of market driven aspects.This feedback should be used as the inception points for areas of improvement.More University-Industry-Government linkage should be established.Prime technical skills identified by the industry, should be cultivated in the higher/vocational educational institutions, with the support of accreditation and funds from the government.Co-operative educational plan as such will be at advantage to all parties, be it the industry, or the universities, or the government and policy makers.
While education is the key to close the skills gap among these group of young, well-educated talents, education system radical movements and shifts will only help to develop a generation of talents who will be entering into the talent pool, or at most help to improve talents who have intentions to enhance their knowledge.What about those who are already in the industry?Thus, at the micro level, the solution to tightening the skills difference lies in the hands of the industry players, with some support from government and policy makers.Managers' leadership, supervision and structure play a major in influencing self-motivation, work independence, and customer relationship skills among talents.In addition, constantly throwing intellectually stimulating challenges as well as questioning the talents assumptions can help in cultivating critical thinking, reasoning and problem solving skills.Proper career development policies besides monetary rewards can act as a tool to increase the talents' loyalty and tendencies to stay back.Besides efficient in retaining talent, transparent monetary incentives policies can be used to encouraging them to attend enhancement courses on communication and technical/IT skills.Of course, all the efforts by managers will be insufficient to curb the skills gap issue without strong support from the government and policy makers.Collaborative efforts from the government and policy makers in making available the appropriate courses and accreditation for skills training, and training subsidies are tremendously important.

Limitation and Concluding Remarks
There are several constraints, which make available the avenues for future studies.Firstly, due to time and cost constraints, many follow-ups data collection was unfeasible, resulting in a rather small sample size and low responds rate.Future studies incorporating more sample size will surely augment the generalisability of the findings.Secondly, this study focuses on examining the skills gap analysis from the three aspects: Personal and Interpersonal skills, customer relationship skills and Technical/IT skills.Where skills gap are concern, it would be beneficial to expand the future studies to also examine impact of these gaps towards organizational performance variables.Results of such would facilitate policy makers' decision making to address necessary skills gaps.
As a final remark, this study provides an important hint to the service industry practitioners particularly in Malaysia.To find the right people with the right skills is reckon to be an unachievable dream at this point of time.Reaching and equilibrium by closing the necessary skills gap is hence crucial.Closing these gaps requires the industry practitioners to understand the characteristics of these young, well-educated services corporate talents to facilitate managers in providing the appropriate on-the-job skills development.In addition to that, since majority of the skills gaps areas has strong ties to the talents educational aspects, there ought to be a lot to be done in terms of restructuring the current educational pedagogy and curriculum.Although the government and policy makers plays the key to the restructuring, co-operation and inputs from the industry should never be undermined.

Table 1 .
Profile of the Respondents

Table 2 .
Gap Analysis between Employers' Needs and Talents' Availability Scale ranged from 1 = not important to 6 = very important, b S= standard deviation; C Scale ranged from 1 = low level of availability to 6 high level of availability; t-test is significant at ***p<0.01(2-tailed)