TVET grads catching up on pay, study finds

New Straits Times

20-05-2025

KUALA LUMPUR: Graduates of Technical and Vocational Education and Training (TVET) are now earning starting salaries that match — or even surpass — those of their academically inclined peers.
This was among the key findings of a study conducted by the PNB Research Institute (PNBRI), titled Entry-Level Salary Trends in Malaysia: Insights from Private Sector Employment (1997–2022).
According to the report, holders of the Malaysian Skills Certificate (SKM) Level 3 have consistently earned either more or the same as those with a Sijil Tinggi Persekolahan Malaysia (STPM) qualification since 2017.
It also found that TVET diploma holders (Diploma Kemahiran Malaysia, DKM Level 4) have experienced stronger wage growth compared to academic diploma graduates.
"Between 2012 and 2022, the median starting salary of DKM holders increased by 14 per cent, compared to a mere two per cent for academic diploma holders. This trend reflects the increasing value the labour market places on technical skills, particularly within the private sector," the report revealed.
The data drawn from the Malaysian Employers Federation (MEF) Salary Survey also showed that the diploma-level wage gap has narrowed significantly, with some years showing parity between DKM and academic diploma holders.
"In 2012, academic diploma holders earned 1.2 times more than their TVET counterparts. By 2022, both groups were earning the same," it stated.
Although academic qualifications still command higher starting salaries at the degree level, the report said that TVET pathways were gaining momentum — especially for school leavers entering the workforce earlier.
"It is worth noting that individuals may bypass the SPM — an entry requirement for the STPM — and proceed directly to SKM Levels 1 to 3, enabling them to join the workforce at a younger age than STPM holders.
"This represents a promising early indicator of TVET's advantages over traditional academic routes."
However, the report cautioned that despite high employability, many TVET graduates continued to earn below RM2,000 per month.
"As many as 87.8 per cent of TVET graduates still earn under RM2,000 monthly. This raises concerns about skills mismatch and wage stagnation in lower-tier roles.
"There may be a disconnect between qualifications and job roles, or a need for improved job placement and upskilling initiatives."
To address these concerns, the report recommends expanding access to higher-level TVET qualifications, such as the Advanced Diploma (DLKM Level 5), and introducing structured wage progression policies — including a progressive wage model.
"The government should also bolster institutional wage bargaining mechanisms to ensure fairer compensation, particularly at entry level. Supporting TVET graduates beyond initial employment is crucial. Clear pathways for upskilling and wage progression must be established."
National TVET Council chairman Datuk Seri Dr Ahmad Zahid Hamidi previously said that TVET graduate employability stood at an impressive 94.5 per cent, with Mara TVET institutions recording an outstanding 98.7 per cent.
The PNBRI study also stated the trend suggests employers are placing increasing value on practical skills, and called for continued efforts to align TVET programmes with industry needs.