MSC Malaysia Talent Supply-Demand Study 2013-2017. 24 July 2014

Malaysia Talent Supply-Demand Study 2013-2017 24 July 2014

Project Background Ipsos Business Consulting 2

Project Objectives Malaysia Talent Development Initiatives focus on creating a sustainable talent pool for the ICT industry. Malaysia K-Workers Development Initiatives (KDI) aims to facilitate the current and future demands of industryrelevant talent by the local ICT industry, especially by Malaysia status companies. MDeC has commissioned this study to address the following objectives: To obtain comprehensive, critical and relevant supply and demand data related to talent in Malaysia, with deep analysis within each Malaysia cluster 1 (InfoTech, CMC, SSO) To match talent needs of top employers of Malaysia clusters and other Non- 2 Malaysia status companies, following the Skills Competency Matrix as guide 3 4 To identify gaps in supply and demand of talent within the ICT industry To identify and analyze the pulse and trend of ICT talent characteristics To generate a reliable forecasting of talent requirements from Malaysia and also 5 the ICT industry over the next 5 years 6 To recommend strategic plans to relevant stakeholders for future talent development 3

Project Scope Geographical Coverage and Target Respondents 1. status companies 2. Non companies 3. Institutions of Higher Learning across 5 faculties: - Information Technology - Engineering - Creative Multimedia - Business - Arts Study Methodology Industry Cluster Analysis Timeframe Secondary research Primary research: Quantitative survey with and Non- status companies Quantitative survey with Institutions of Higher Learning IPTA, IPTS, Polytechnic and Community College In-depth interview with companies and employees Clusters: InfoTech Shared Services and Outsourcing (SSO) Creative Multimedia (CMC) Sub clusters: Embedded System Data Centre Current (2014) Future (2015 2017) 4

Overview of Key Talent Supply-Demand Indicators 5

Key Talent Supply-Demand Indicators (2014) Supply Total graduates Across all faculties covered in this study (IT, Engineering, Creative Multimedia, Business, Arts) and all IHLs in Malaysia 87,800 Available graduates = Total local graduates (those who further studies after graduation and are waiting for placement for further studies) 66,900 76% of total graduates Employable graduates = Available pool (those who are not confident or interested to work and those who are still actively searching for a job 3-6 months after graduation) 50,900 58% of total graduates Existing Workforce Existing workforce size Across all and non companies in Malaysia under the 3 clusters (InfoTech, SSO and CMC), including foreign employees 115,500 NON 167,000 Size of fresh graduate employees With relevant IT, Engineering, Creative Multimedia, Business and Arts qualifications within the existing workforce NON 15,400 12,800 Future Demand Est. future workforce size, 2017 Across all and non companies in Malaysia under the 3 clusters (InfoTech, SSO and CMC), including foreign employees NON 170,800 205,000 10% CAGR (2014-17) 4% CAGR (2014-17) 6

Supply-Side Analysis 7

Student Intake and Graduate Trend by Field of Study 8

Student Intake Trend by Field of Study* (2010 2013) During the period 2010 2013, student intake for IT and Engineering courses registered negative CAGR of about 4% and 11% respectively, due to declining intake in both IPTS and Polytechnic / Community College IPTA IPTS Polytechnic / Community College 40,000 40,000 40,000 35,000 35,000 35,000 30,000 30,000 30,000 25,000 25,000 25,000 20,000 20,000 20,000 15,000 15,000 15,000 10,000 10,000 10,000 5,000 5,000 5,000 0 2010 2011 2012 2013 0 2010 2011 2012 2013 0 2010 2011 2012 2013 IT Engineering Business Arts & CMM * Student intake trend above is based on MOE stats for each individual course; only courses relevant to this study are included Source: MOHE statistics, 2009-2013 9

Graduate Trend by Field of Study* (2010 2013) Similarly, graduates of IT and Engineering courses showed a negative CAGR of about 2% during the same period, while Business graduates grew strongly at ~13% per annum followed by Creative Multimedia and Arts graduates IPTA IPTS Polytechnic** 40,000 40,000 40,000 35,000 35,000 35,000 30,000 30,000 30,000 25,000 25,000 25,000 20,000 20,000 20,000 15,000 15,000 15,000 10,000 10,000 10,000 5,000 5,000 5,000 0 2010 2011 2012 2013 0 2010 2011 2012 2013 0 2010 2011 2012 2013 IT Engineering Business Arts & CMM * Student intake trend above is based on MOE stats for each individual course; only courses relevant to this study are included ** Data for Community College is not available for 2010 & 2011, hence, only data for Polytechnic is shown above Source: MOHE statistics, 2009-2013 10

Graduate Demographics 11

Gender Breakdown of Graduates The number of male and female students across all the IHL respondents are equally divided, with a higher proportion of females in IPTA (58%) while IPTS, polytechnic and community college have more male students (58%) 50% Gender breakdown across all 5 fields of study IHL Male Female IPTA 42% 58% IPTS 58% 42% 50% Polytechnic and community college 57% 43% Source: Primary Surveys with IHLs 12

Gender Breakdown of Graduates In terms of fields of study, there are more females taking up IT courses in IPTA and polytechnic / community college (~60%), while Engineering is dominated by male students across all IHLs IPTA IPTS Polytechnic / Community College IT 41% 59% IT 41% 59% IT 42% 58% Eng 35% 65% Eng 17% 83% Eng 20% 80% Business 38% 62% Business 42% 58% Business 22% 78% Arts&CMC 42% 58% Arts&CMC 40% 60% Arts&CMC 39% 61% n = 30 n = 81 n = 33 Male Female Source: Primary Surveys with IHLs 13

Curriculum Review & Industry Collaboration 14

Skill Sets Taught to Students in IPTA IT and Engineering students in IPTA are more focused on skills within their own domain of study while Business students seem to have higher level of exposure to a more diverse set of skills IT Engineering Business Arts & CMC Software & Application Development 100% 100% 0% 67% Database 100% 33% 29% 33% OS & Server Technologies 100% 67% 29% 50% Networking & Security 91% 50% 0% 17% BI & Analytics 64% 0% 71% 33% Creative Multimedia 63% 67% 14% 100% Embedded System 36% 16% 0% 0% ERP 27% 0% 14% 0% Hardware Design 18% 83% 0% 0% Finance 9% 0% 71% 0% HRM 9% 0% 29% 0% Source: Primary Surveys with IHLs 15

Skill Sets Taught to Students in IPTS Similarly, Business students in IPTS seem to be more exposed to other skillsets not within their own field of study compared to students in other faculties IT Engineering Business Arts & CMC Software & Application Development 91% 14% 15% 11% Database 91% 43% 46% 44% OS & Server Technologies 87% 79% 19% 67% Networking & Security 61% 21% 0% 0% BI & Analytics 43% 14% 8% 72% Creative Multimedia 22% 0% 0% 0% Embedded System 17% 0% 38% 0% ERP 9% 0% 12% 0% Hardware Design 9% 29% 0% 0% Finance 9% 0% 69% 0% HRM 9% 7% 62% 0% Source: Primary Surveys with IHLs 16

New Courses to be Introduced, 2014 2017 Mobile and Security related programs are the key new courses to be introduced within the IT faculties while Animation/Visual Effects and New Media Development/Film are among the new programs being planned by CMC faculties Summary of Key New Courses (All Faculties) New course / area of specialization No. of IHL planning to offer the course IPTA IPTS Poly / CC Information Security/Computer Forensics 3 2 Mobile Programming/Application Development & Mobile Computing 1 1 1 Informatics, Visual Informatics 1 2 System Architecture / Architectural Technology 1 1 2 Animation/Visual Effects 1 4 Creative Media/Creative Media Technology 2 1 Film/New Media Development 3 Games/Digital Media 1 1 Source: Primary Surveys with IHLs 17

Frequency of Curriculum Review 53% of IPTS review their curriculum on a yearly basis while less than 15% of IPTAs do the same (more than 80% conduct curriculum review once every 2 years or more) IPTA IPTS Polytechnic / Community College IT 18% 36% 45% IT 4% 48% 26% 22% IT 21% 50% 29% Eng 17% 33% 50% Eng 43% 29% 29% Eng 13% 25% 25% 38% Business 29% 29% 43% Business 8% 50% 31% 12% Business 14% 29% 29% 29% Arts & CMC 33% 67% Arts & CMC 6% 75% 13% 6% Arts & CMC 60% 40% n = 30 n = 81 n = 33 6 Months Yearly Every 2 Years More than 2 Years Source: Primary Surveys with IHLs 18

Do IHLs Invite Industry Players as Guest Lecturers? Majority (more than 90%) of IPTA and about half of IPTS invite industry players as guest lecturers. IT faculty within polytechnics and community colleges has the least participation of industry players in guest lecturing IPTA IPTS Polytechnic / Community College IT 91% 9% IT 52% 48% IT 27% 73% Eng 100% Eng 62% 38% Eng 56% 44% Business 86% 14% Business 56% 44% Business 57% 43% Arts & CMC 100% Arts & CMC 50% 50% Arts & CMC 40% 60% n = 30 n = 81 n = 33 Yes No Note: Guest Lecture includes one-off lectures from industry players as well as regular lecture arrangement with industry players on a permanent basis Source: Primary Surveys with IHLs 19

Industrial Training 20

Is Industrial Training Conducted in the Final Semester of Final Year? 70-80% of all faculties in IPTAs conduct their industrial training in the final semester of final year, except for Engineering faculty. Similarly, ~70% of all faculties in IPTS, polytechnics and community colleges do the same. IPTA IPTS Polytechnic / Community College IT 82% 22% IT 62% 38% IT 71% 29% Eng 100% Eng 71% 29% Eng 44% 56% Business 67% 33% Business 90% 10% Business 71% 29% Arts & CMC 67% 33% Arts & CMC 56% 44% Arts & CMC 100% n = 30 n = 81 n = 33 Yes No Note: Industrial Training for IPTA Engineering students is usually conducted in Year 3 Source: Primary Surveys with IHLs 21

Do IHLs Send Lecturers for Industrial Training? ~50% of all faculties in IPTAs provide the opportunity for their lecturers to attend industrial training compared to ~30% of faculties in IPTS. On the other hand, almost all faculties in Polytechnics and Community Colleges send their lecturers for industrial training IPTA IPTS Polytechnic / Community College IT 36% 64% IT 27% 73% IT 87% 13% Eng 67% 33% Eng 45% 55% Eng 100% Business 67% 33% Business 27% 73% Business 86% 14% Arts&CMC 33% 67% Arts&CMC 25% 75% Arts&CMC 80% 20% n = 30 n = 81 n = 33 Yes No Note: Industrial Training for lecturers include both short term and long term attachments with companies Source: Primary Surveys with IHLs 22

Demand-Side Analysis 23

Company Profile 24

Company Profile: Location Non Central Region 88% 96% 94% Central Region 86% 78% 90% Southern Region 3% 1% 1% Southern Region 5% 8% 2% Northern Region 8% 3% 4% Northern Region 6% 12% 7% East Coast 0% 0% 0% East Coast 2% 0% 0% Sabah & Sarawak 0% 0% 1% Sabah & Sarawak 1% 2% 1% Cyberjaya 11% 21% 11% 2% Cyberjaya 2% n = 83* 0% n = 4* n = 644 n = 400 InfoTech SSO CMC * Includes companies with offices in Cyberjaya AND other location(s) Central region: Selangor, KL, Putrajaya Southern region: Negeri Sembilan, Melaka, Johor Northern region: Perlis, Kedah, Penang, Perak East coast region: Kelantan, Terengganu, Pahang 25

Company Profile: Cluster Non 12% 16% 44% 33% 71% 23% n = 644 n = 400 Cyberjaya 10% InfoTech SSO CMC 28% 62% n =87 26

Employee Profile 27

Estimated Growth in Total Employees (2014 2017) companies expect to grow their total employees at an average rate of about 10% per annum in the next 3 years (with CMC projecting the highest growth) while Non companies estimate a more conservative growth of 4% n = 644 52,600 69,800 CAGR 10% 29,500 Non 33,600 4% n = 400 Non CAGR CAGR Infotech 13,900 19,000 11% Infotech 12,000 14,200 6% n = 460 n = 131 SSO 36,000 46,800 9% SSO 11,100 11,700 2% n = 105 n = 92 CMC 2,700 4,000 15% CMC 6,400 7,800 7% n = 79 n = 177 Note: Total employees above are based on the companies that responded to the survey and do not represent the entire workforce Total employees in H1 2014 Est. total employees in 2017 28

Proportion of Fresh vs Experienced Employees InfoTech companies employ the highest proportion of fresh graduate employees compared to CMC and SSO clusters which are slightly more dependent on experienced hands 17% 83% n = 644 Non 8% 92% n = 400 Non Infotech 14% 86% Infotech 13% 87% n = 460 n = 131 SSO 19% 81% SSO 2% 98% n = 105 n = 92 CMC 11% 89% CMC 8% 92% n = 79 n = 177 Fresh Experienced 29

Gender Breakdown of Employees Non companies demonstrate a more balanced gender ratio across all clusters while the CMC cluster has the highest participation of female employees 58% 42% n = 644 Non 54% 46% n = 400 Non Infotech 70% 30% Infotech 55% 45% n = 460 n = 131 SSO 55% 45% SSO 54% 46% n = 105 n = 92 CMC 53% 47% CMC 53% 47% n = 79 n = 177 Male Female 30

Non Companies with Foreign Employees 42% of and Non companies hire foreign employees at present while 19% of these companies would increase the number of foreign employees within their companies in the next 3 years With foreign employee, 52% Without foreign employee, 48% Will the number of foreign employees increase or decrease in the next 3 years in your company? 53% 4% 42% n = 644 n = 335 With foreign employee, 25% Without foreign employee, 75% Will the number of foreign employees increase or decrease in the next 3 years in your company? 26% 7% 67% n = 400 Increase Decrease Remains the same n = 99 31

Local vs Foreign Employee Proportion Indian employees are the most preferred choice by both and Non companies while employees from Indonesia and Philippines are also among the preferred options for companies Non Foreign, 13% Foreign, 10% Local, 87% Local, 90% Foreign employees: n = 644 Foreign employees: n = 400 India 51% India 29% Indonesia 27% Japan 11% Phillipines 20% China 10% Philippines 9% Pakistan 5% n = 336 Indonesia 8% n = 99 % of companies which mentioned this country as one of the countries of origin of their foreign employees 32

Attrition Rate: All Employees CMC companies within both the and non segments have the highest estimated attrition rate for 2014 while non companies overall expect to register a healthy attrition rate of less than 10% 40% Average attrition rate across all companies (All Employees): 8% 30% 20% 10% 0% (by Cluster) Non (by Cluster) Non INFO TECH SSO CMC INFO TECH SSO CMC 10% 5% 9% 10% 11% 7% 2% 8% Note: Attrition rate is based on (total no. of permanent employees who is expected to leave in 2014 / total no. of permanent employees as at 31 Dec 2013 33

Attrition Rate: Fresh Graduate Employees CMC and Non InfoTech companies are expected to have the highest attrition rate among fresh graduates at 33% and 28% respectively. This group of employees is estimated to register an average attrition of 21% in 2014 40% Average attrition rate across all companies (Fresh Graduate Employees): 21% 30% 20% 10% 0% Non INFO TECH (by Cluster) Non (by Cluster) (by Company Size) SSO CMC INFO TECH SSO CMC 0-9 10-24 25-49 50-74 75+ 20% 24% 21% 18% 33% 28% 18% 17% 15% 27% 18% 29% 19% Fresh graduates are defined as employees with less than 1 year of experience Note: Attrition rate is based on (total no. of permanent employees who is expected to leave in 2014 / total no. of permanent employees as at 31 Dec 2013 34

Attrition Rate: Mid Level Employees Mid level employees show a lower attrition rate at 11%. The highest attrition of 15% is expected among those within the SSO cluster and for companies with more than 75 employees 40% Average attrition rate across all companies (Mid Level Employees): 11% 30% 20% 10% 0% Non INFO TECH (by Cluster) Non (by Cluster) (by Company Size) SSO CMC INFO TECH SSO CMC 0-9 10-24 25-49 50-74 75+ 13% 6% 10% 15% 12% 10% 2% 9% 10% 11% 7% 8% 15% Mid Level employees are defined as employees who have between 1 to 3 years of experience Note: Attrition rate is based on (total no. of permanent employees who is expected to leave in 2014 / total no. of permanent employees as at 31 Dec 2013 35

Attrition Rate: Experienced Employees Experienced employees are expected to register the lowest attrition rate among all employees, at ~5%. CMC companies within the cluster shows the highest attrition rate 40% Average attrition rate across all companies (Experienced Employees): 5% 30% 20% 10% 0% Non INFO TECH (by Cluster) Non (by Cluster) (by Company Size) SSO CMC INFO TECH SSO CMC 0-9 10-24 25-49 50-74 75+ 7% 3% 6% 7% 8% 3% 1% 7% 4% 4% 4% 6% 8% Experienced Employees are defined as employees with more than 3 years of experience Note: Attrition rate is based on (total no. of permanent employees who is expected to leave in 2014 / total no. of permanent employees as at 31 Dec 2013 36

Quality of Fresh Graduate Employees from Local IHLs Only 5% of the companies believe that their fresh graduate employees are of very good quality, while ~10% of them rate their fresh graduates as poor / very poor 12% 51% 31% 6% n = 321 Non 7% 54% 35% 3% n = 195 Companies Non Companies Infotech 12% 49% 31% 7% Infotech 7% 56% 33% 5% n = 214 n = 66 SSO 9% 55% 31% 4% SSO 7% 54% 37% 2% n = 67 n = 41 CMC 13% 58% 28% 3% CMC 8% 53% 36% 2% n = 40 n = 88 Poor / Very poor Average Good Very good 37

Employee Recruitment 38

Top Criteria for Recruitment of Fresh Graduates Interpersonal skill is the most important criteria among employers when recruiting fresh graduates followed by field of study and related work experience Non Interpersonal skills 69% Interpersonal skills 71% Field of study 51% Experience 62% Experience 41% Field of study 44% Results/CGPA 36% Level of Academic Qualification 35% Level of Academic Qualification 34% Results / CGPA 24% Industrial training 18% Industrial Training 20% Industrial/Professional Certification 16% Industrial / Professional Certification 13% Final Year Project 14% Final Year Project 10% University / IHLs 8% University / IHLs 9% n = 644 n = 400 1st Choice 2nd Choice 3rd Choice 39

Criteria for Recruitment of Fresh Graduates: Professional Certification Less than 20% of companies indicated that professional certification is an important criteria in the recruitment of fresh graduates 17% 20% 45% 18% n = 543 Non 17% 20% 46% 17% n = 346 Non INFOTECH 16% 23% 44% 17% 28% 15% 41% 17% n = 384 n = 109 SSO 22% 14% 47% 17% 10% 19% 52% 19% n = 86 n = 83 CMC 18% 14% 45% 23% 14% 24% 45% 17% n = 73 n = 154 Yes No Depending on the position Depending on level of experience 40

Employee Training & Development Budget 41

Annual Training Budget (% of OPEX) More than 50% of Non companies and one-third of companies do not have any employees training and development budget 35% 38% 13% 9% 4% n = 644 Non 51% 30% 8% 7% 5% n = 400 Non INFOTECH 37% 36% 15% 9% 3% 45% 34% 8% 8% 4% n = 460 n = 131 SSO 21% 46% 14% 13% 7% 52% 28% 5% 12% 2% n = 105 n = 92 CMC 43% 37% 4% 6% 10% 54% 28% 8% 3% 7% n = 79 n = 177 None < 5% of OPEX 5 10% of OPEX 10 20% of OPEX >20% of OPEX Note: Data is based on 2013 operations budget 42

HRDF Contribution by Companies Only one-third of both and Non companies contribute to HRDF 37% n = 644 Non 32% n = 400 Non INFOTECH 37% 41% n = 460 n = 131 SSO 48% 27% n=105 n = 92 CMC 25% 27% n = 79 n = 177 43

HRDF Utilization by Companies More than 15% of the companies do not utilize their HRDF contribution for training & development of their employees 81% n = 238 Non 89% n = 126 Non INFOTECH 79% 93% n = 168 n = 54 SSO 92% 76% n = 50 n = 25 CMC 70% 91% n = 20 n = 47 44

Salary and Employee Benefits 45

Starting Salary Offered to Fresh Graduates Close to 50% of SSO companies offer a starting salary of more than RM2,500. About one-third of InfoTech companies offer the same while less than 10% of CMC companies have similar offer TOTAL INFOTECH SSO CMC RM1,000 to RM1,499 5% 3% 6% RM1,500 to RM1,999 22% 21% 19% 37% RM2,000 to RM2,499 40% 40% 29% 49% RM2,500 to RM2,999 26% 27% 35% 8% RM3,000 to RM3,499 5% 5% 10% RM3,500 to RM3,999 2% >RM4,000 2% n = 563 n = 405 n = 96 n = 65 46

Starting Salary Offered to Fresh Graduates Meanwhile, majority of Non companies (~70%) offer starting salary of between RM 1,500 to RM 2,500 Non TOTAL INFOTECH SSO CMC RM1,000 to RM1,499 14% 8% 26% 13% RM1,500 to RM1,999 39% 37% 25% 49% RM2,000 to RM2,499 32% 36% 35% 27% RM2,500 to RM2,999 9% 12% 9% 7% RM3,000 to RM3,499 2% 3% 1% 1% RM3,500 to RM3,999 1% 1% 1% >RM4,000 n = 316 n = 102 n = 77 n = 135 47

Annual Salary Increment for Fresh Graduates ~65% of the companies offer an annual increment of between 5% - 15% for their fresh graduate employees in the first 2 years of employment TOTAL INFOTECH SSO CMC < 2.5% 5% 5% 5% 15% 2.5% to 4.9% 19% 16% 22% 26% 5% to 7.4% 27% 26% 37% 18% 7.5% to 9.9% 9% 10% 12% 3% 10% to 14.9% 28% 31% 11% 31% 15% to 19.9% 6% 6% 4% 6% 20% to 29.9% 3% 3% 5% 2% >30% 2% 3% 1% n = 518 n = 364 n = 92 n = 62 48

Annual Salary Increment for Fresh Graduates 55% of Non companies offer their fresh graduates an annual increment of 5% - 15%, while 29% offer less than 5% Non TOTAL INFOTECH SSO CMC < 2.5% 5% 5% 5% 15% 2.5% to 4.9% 24% 35% 24% 15% 5% to 7.4% 22% 22% 22% 22% 7.5% to 9.9% 11% 9% 11% 13% 10% to 14.9% 22% 19% 24% 23% 15% to 19.9% 5% 6% 5% 4% 20% to 29.9% 5% 3% 8% >30% 3% 1% 5% 3% n = 281 n = 95 n = 63 n = 123 49

Additional Employee Benefits Flexible working hours and life insurance coverage are the top 2 additional benefits offered by both and Non companies for their employees Non Flexible working hours 52% Flexible working hours 40% Life insurance 37% Life insurance 34% Dental / vision care 29% Disability insurance 18% Disability insurance 27% Dental / vision care 17% Gym / healthcare / lifestyle membership Facilities for pregnant employees and new mothers Flexible benefits package 15% 14% 14% Gym / healthcare / lifestyle membership Facilities for pregnant employees and new mothers Subsidized interest rates for car / housing loan 16% 13% 8% Subsidized interest rates for car / housing loan 7% Flexible benefits package 8% Education scholarships for children 5% Childcare 4% Retirement plan 4% Retirement plan 4% Childcare 3% Education scholarships for children n = 644 n = 400 3% 50

Office Location 51

Level of Comfort with Current Office Location More than 90% of companies across all clusters are comfortable with their present office location Non Cyberjaya Very Uncomfortable 1% 1% 6% Uncomfortable 5% 7% 2% Comfortable 47% 44% 48% Very Comfortable 46% 48% 43% n = 644 n = 400 n = 87 52

Headcount & Vacancies by Job Titles 53

Job Titles with Highest Headcount, 2014 INFOTECH Job Title Non Job Title 1 Software Engineer 1 Software Engineer 2.Net Programmer 2 Java Programmer 3 Java Programmer 3 Customer Support Engineer 4 Customer Support Engineer 4 Technical Support Engineer 5 Team Lead 5 Network Engineer 6 Technical Support Engineer 6 IT Business Analyst 7 PHP Programmer 7 Chief Executives 8 C/C++ Programmer 8.Net Programmer 9 IT Manager 9 C/C++ Programmer 10 Solution Architect 10 IT Business Development Manager 11 Software QA Engineer 11 Computer Operator 12 IT Business Analyst 12 IT Manager 13 IT Project Manager 13 IT Marketing Executive 14 Network Engineer 14 IT Sales Engineer 15 SQL Database Administrator 15 IT Project Manager 16 Test Development Engineer 16 SAP Consultant n=591 54

Job Titles with Highest Headcount, 2014 SSO Job Title Non Job Title 1 Contact Centre Agent Inbound 1 Contact Centre Agent Inbound 2 Technical Helpdesk Analyst 2 Head of Operations - Shared Services 3 Contact Centre Agent Outbound 3 Accounting Analyst 4 Software QA Engineer 4 IT Sales Engineer 5 Customer Support Engineer 5 Technical Support Engineer 6 Technical Support Engineer 6 Chief Executives 7 Financial Analyst 7 Network Engineer 8 Accounting Analyst 8 Financial Analyst 9 Network Engineer 9 Customer Support Engineer 10 Java Programmer 10 IT Marketing Executive 11.Net Programmer 11 Process Analyst 12 IT Security Specialist 12 IT Manager 13 Contact Centre Team Lead Inbound 13 Strategic Planner 14 Software Engineer 14 Fraud Detector 15 Team Lead 15 Computer Operator 16 Contact Centre Business Analyst 16 Media Research Analyst n=197 55

Job Titles with Highest Headcount, 2014 CMC Job Title Non Job Title 1 Animator 1 Graphic Designer 2 Digital Artist 2 Designer 3 3D Modeler 3 Creative Director 4 Graphic Designer 4 Digital Artist 5 Producer 5 Animator 6 Web Designer 6 Editor 7 Game Designer 7 Producer 8 Storyboard Artist 8 Scriptwriter 9 Creative Director 9 Layout Artist 10 Editor 10 3D Modeler 11 Visual Effects Artist 11 Web Designer 12 Compositor 12 Multimedia Programmer 13 Clean-up Artist 13 Film Director 14 Web Programmer 14 Audio Visual Engineer 15 Designer 15 Visual Effects Artist 16 Render Wrangler 16 Web Programmer n=256 56

Job Titles with Highest Vacancies, 2014 INFOTECH Job Title Non Job Title 1 Software Engineer 1 Process Analyst 2.Net Programmer 2 Software Engineer 3 Java Programmer 3 Technical Support Engineer 4 PHP Programmer 4 Java Programmer 5 C/C++ Programmer 5 Java Consultant 6 Customer Support Engineer 6.Net Programmer 7 Technical Support Engineer 7 Contact Centre Trainer 8 Team Lead 8 IT Marketing Executive 9 Solution Architect 9 Computer Operator 10 IT Sales Engineer 10 Customer Support Engineer 11 Software QA Engineer 11 Network Engineer 12 SAP Consultant 12 Contact Centre Agent Inbound 13 Contact Centre Agent Inbound 13 IT Sales Engineer 14 IT Business Analyst 14 C/C++ Programmer 15 System Architect 15 Team Lead 16 Java Consultant 16 System Architect n=591 57

Job Titles with Highest Vacancies, 2014 SSO Job Title Non Job Title 1 Technical Helpdesk Analyst 1 Contact Centre Agent Inbound 2 Contact Centre Agent Inbound 2 Accounting Analyst 3 Java Programmer 3 IT Sales Engineer 4 Customer Support Engineer 4 Head of Operations - Shared Services 5 Contact Centre Agent Outbound 5 Technical Support Engineer 6.Net Programmer 6 Chief Executives 7 Technical Support Engineer 7 Fraud Detector 8 Software QA Engineer 8 Computer Operator 9 SAP Consultant 9 Team Lead 10 Contact Centre Recovery Staff 10 Network Engineer 11 Contact Centre Business Analyst 11 Customer Support Engineer 12 Accounting Analyst 12 IT Marketing Executive 13 Network Engineer 13 Media Research Analyst 14 Software Engineer 14 SQL Database Administrator 15 Team Lead 15 IT Project Manager 16 C/C++ Programmer 16.Net Programmer n=197 58

Job Titles with Highest Vacancies, 2014 CMC Job Title Non Job Title 1 Animator 1 Graphic Designer 2 Digital Artist 2 Designer 3 3D Modeler 3 Digital Artist 4 Game Designer 4 Editor 5 Compositor 5 Creative Director 6 Visual Effects Artist 6 Producer 7 Graphic Designer 7 Scriptwriter 8 Storyboard Artist 8 Layout Artist 9 CG Artist 9 Animator 10 Editor 10 Web Designer 11 Game Programmer 11 Film Director 12 Lighting Artist 12 3D Modeler 13 Creative Director 13 Multimedia Programmer 14 Render Wrangler 14 Visual Effects Artist 15 Web Designer 15 Storyboard Artist 16 Producer 16 Sound Designer n=256 59

Technical Skills of Existing Workforce 60

Present Skillsets of Existing Workforce (2014) vs Future Required Skillsets (2017) In 2017, more companies expect their employees to have networking & security, BI, Creative, ERP, hardware design and embedded system related skillsets Software and Application Development 70% 71% Creative Multimedia 26% 30% Database 56% 55% Enterprise Resource Planning (ERP) 19% 23% OS and Server Technologies 42% 43% Finance 18% 18% Networking & Security 37% 42% Human Resource Management 17% 18% Business Intelligence (BI) & Analytics 26% 32% Hardware Design & Embedded System 11% 14% 2014 n = 644 2017 Note: % shown above refers to % of companies with employees having these skillsets 61

Present Skillsets of Existing Workforce (2014) vs Future Required Skillsets (2017) Meanwhile, more non companies would require employees with Database and Business Intelligence & Analytics related skillsets in 2017 Non Creative Multimedia 42% 43% Finance 13% 13% Software & Application Development 28% 30% Human Resource Management 10% 10% Database 21% 24% Enterprise Resource Planning (ERP) 9% 10% OS & Server Technologies 21% 20% Business Intelligence (BI) & Analytics 8% 10% Networking & Security 19% 20% Hardware Design & Embedded System 5% 5% n = 400 2014 2017 Note: % shown above refers to % of companies with employees having these skillsets 62

Key Technical Skills of Existing Workforce (2014) vs Future Required Skills (2017) Technical Skills of Employees 2014 vs 2017 Skill % of employees who have these skills at present (2014) % of employees required to have these skills in the future (2017) Skill % of employees who have these skills at present (2014) % of employees required to have these skills in the future (2017) Windows 12% 15% XML 6% 8% Java 11% 14% PHP 6% 7% MS SQL 11% 14% Management in Accounts Payable 6% 7% C/C++ / C# 9% 12% Linux 5% 7% Compensation & Benefits 9% 10% SAP Business All in One 5% 14%.NET 8% 11% Open Standard Networking Technologies 4% 5% JavaScript 8% 10% VMWARE 4% 5% Cisco (Networking/Firewall) 8% 10% Android 4% 5% Oracle 8% 10% Unix 4% 5% MySQL 7% 8% Adobe Creative Suite 4% 5% Management in Accounts Receivable 7% 8% HP (Networking/Firewall) 3% 4% Training & Development 7% 8% Crystal Reports 3% 4% Recruitment & Selection 7% 7% Oracle e-business suite 3% 10% n = 644 63

Key Technical Skills of Existing Workforce (2014) vs Future Required Skills (2017) Non Technical Skills of Employees 2014 vs 2017 Skill % of employees who have these skills at present (2014) % of employees required to have these skills in the future (2017) Skill % of employees who have these skills at present (2014) % of employees required to have these skills in the future (2017) Windows 11% 12%.NET 5% 7% Recruitment & Selection 11% 11% COBOL 4% 1% Performance Management 10% 10% ASP 4% 1% Java 9% 13% Linux 4% 4% Knowledge In Accounting Software 9% 11% Sybase SQL 4% 4% Management in Accounts Receivable 9% 10% Apache 4% 4% Management in Accounts Payable 9% 10% Cisco 3% 4% MS SQL 8% 11% SAP Business All in One 3% 4% Adobe Creative Suite 8% 9% Open Standard Networking Technologies 2% 6% Java Script 7% 4% MY SQL 1% 7% MS Access 6% 3% n = 400 64

Key Findings by Location: Cyberjaya 65

Estimated Growth in Total Employees (2014 2017) Companies in Cyberjaya expect to grow their total employees by ~12% per annum in the next 3 years, which is higher than the estimated growth by Non Cyberjaya based companies by 3 percentage points CAGR Cyberjaya n = 83 15,300 21,400 12% Non Cyberjaya n = 561 37,200 48,500 9% Cyberjaya () Non Cyberjaya () CAGR CAGR Infotech 2,100 2,800 10% Infotech 11,800 16,200 11% n = 51 n = 409 SSO 12,400 17,500 12% SSO 23,600 29,300 8% n = 23 n = 82 CMC 800 1,050 10% CMC 1,900 3,000 16% n = 9 n = 70 Note: Total employees above are based on the companies that responded to the survey and do not represent the entire workforce Total employees in H1 2014 Est. total employees in 2017 66

Proportion of Fresh vs Experienced Employees Overall, companies based in Cyberjaya have a lower proportion of fresh graduate employees (9% compared to 20% in companies outside of Cyberjaya), with the InfoTech companies employing the most number of fresh graduates Cyberjaya 9% 91% n = 83 Non Cyberjaya 20% 80% n = 561 Cyberjaya () Non Cyberjaya () Infotech 20% 80% Infotech 12% 88% n = 51 n = 409 SSO 7% 93% SSO 25% 75% n = 23 n = 82 CMC 7% 93% CMC 13% 87% n = 9 n = 70 Fresh Experienced 67

Gender Breakdown of Employees CMC companies have the highest representation of female employees at about 50% of total employees. Companies in InfoTech and SSO clusters have less than 45% of female employees Cyberjaya 62% 38% n = 83 Non Cyberjaya 56% 44% n = 561 Cyberjaya () Non Cyberjaya () Infotech 67% 33% Infotech 56% 44% n = 51 n = 409 SSO 62% 38% SSO 64% 36% n = 23 n = 81 CMC 48% 52% CMC 52% 48% n = 9 n = 70 Male Female 68

Attrition Rate: All Employees Attrition rate in Cyberjaya is about 4 percentage points higher compared to companies outside of Cyberjaya, with the CMC cluster recording the highest estimated attrition at 22% Average attrition rate across companies (All Employees): 10% 60% 50% 40% 30% 20% 10% 0% Cyberjaya Non Cyberjaya Cyberjaya (by Cluster) Non Cyberjaya (by Cluster) INFOTECH SSO CMC INFOTECH SSO CMC 12% 8% 13% 12% 22% 9% 9% 6% n = 83 Cyberjaya, 561 Non Cyberjaya Note: Attrition rate is based on (total no. of permanent employees who is expected to leave in 2014 / total no. of permanent employees as at 31 Dec 2013 ) 69

Attrition Rate: Fresh Graduate Employees CMC companies in Cyberjaya are expected to have the highest attrition rate at 54% among fresh graduates. On the other hand, Cyberjaya-based InfoTech and SSO companies show a lower estimated attrition compared to those in other locations Average attrition rate across companies (Fresh Graduate Employees): 20% 60% 50% 40% 30% 20% 10% 0% Cyberjaya Non Cyberjaya Cyberjaya (by Cluster) Non Cyberjaya (by Cluster) INFOTECH SSO CMC INFOTECH SSO CMC 16% 23% 7% 17% 54% 26% 19% 21% n = 83 Cyberjaya, 561 Non Cyberjaya Attrition rate among fresh graduates in Cyberjaya is lower due to multiple factors which include hiring on contract basis, requirement for fresh graduates to be bonded to the companies after training and potentially higher starting salary Note: Attrition rate is based on (total no. of permanent employees who is expected to leave in 2014 / total no. of permanent employees as at 31 Dec 2013 ) 70 Fresh Graduates are defined as employees with less than 1 year of experience

Attrition Rate: Mid Level Employees Mid level employees in Cyberjaya register an estimated attrition rate of 18% compared to 10% in other locations, with the Cyberjaya-based CMC cluster again being the highest contributor to attrition Average attrition rate across companies (Mid Level Employees): 13% 60% 50% 40% 30% 20% 10% 0% Cyberjaya Non Cyberjaya Cyberjaya (by Cluster) Non Cyberjaya (by Cluster) INFOTECH SSO CMC INFOTECH SSO CMC 18% 10% 11% 19% 21% 10% 10% 7% n = 83 Cyberjaya, 561 Non Cyberjaya Attrition rate among mid level employees is higher in Cyberjaya which could be attributed to the potentially higher starting salary among fresh graduates but lower increment rates which leads to employees switching jobs to increase their base salaries Note: Attrition rate is based on (total no. of permanent employees who is expected to leave in 2014 / total no. of permanent employees as at 31 Dec 2013 ) Mid Level employees are defined as employees who have between 1 to 3 years of experience 71

Attrition Rate: Experienced Employees InfoTech and CMC companies in Cyberjaya are expected to show the highest attrition rate of about 19% among their experienced employees. All clusters in other locations show an estimated attrition of less than 10% Average attrition rate across companies (Experienced Employees): 7% 60% 50% 40% 30% 20% 10% 0% Cyberjaya Non Cyberjaya Cyberjaya (by Cluster) Non Cyberjaya (by Cluster) INFOTECH SSO CMC INFOTECH SSO CMC 8% 6% 19% 7% 18% 5% 8% 3% n = 83 Cyberjaya, 561 Non Cyberjaya Note: Attrition rate is based on (total no. of permanent employees who is expected to leave in 2014 / total no. of permanent employees as at 31 Dec 2013) Experienced employees are defined as employees with more than 3 years of experience 72

Starting Salary Offered to Fresh Graduates 40% of Cyberjaya-based companies offer a starting salary of RM2,500 and above, compared to about 33% among companies in other locations Cyberjaya () Non Cyberjaya () RM1,000 to RM1,499 4% RM1,000 to RM1,499 5% RM1,500 to RM1,999 25% RM1,500 to RM1,999 22% RM2,000 to RM2,499 32% RM2,000 to RM2,499 41% RM2,500 to RM2,999 35% RM2,500 to RM2,999 25% RM3,000 to RM3,499 3% RM3,000 to RM3,499 6% RM3,500 to RM3,999 1% RM3,500 to RM3,999 1% >RM4,000 >RM4,000 1% n = 69 n = 497 73

Annual Salary Increment for Fresh Graduates 34% of companies in Cyberjaya offer an annual salary increment of less than 5% to their fresh graduate employees in the first 2 years of employment, compared to 24% of companies in other locations Cyberjaya () Non Cyberjaya () <2.5% 3% <2.5% 7% 2.5% to 4.9% 31% 2.5% to 4.9% 17% 5.0% to 7.4% 21% 5.0% to 7.4% 28% 7.5% to 9.9% 8% 7.5% to 9.9% 9% 10.0% to 14.9% 23% 10.0% to 14.9% 28% 15.0% to 19.9% 10% 15.0% to 19.9% 5% 20.0% to 29.9% 5% 20.0% to 29.9% 3% > 30.0% 0% > 30.0% 2% n = 62 n = 456 74

Comparison of Key Findings: 2014 vs 2010 (Demand-Side) 75

Proportion of Fresh vs Experienced Employees Over the past 4 years, both and Non companies have increased their employment of fresh graduates from 11% to 17% of total employees () and 6% to 8% (Non ). This increase is due mainly to the InfoTech companies Non 2014 17% 83% 2014 8% 92% 2010 11% 89% 2010 6% 94% InfoTech SSO CMC InfoTech SSO CMC 2014 2010 2014 2010 2014 2010 2014 2010 2014 2010 2014 2010 14% 8% 19% 14% 11% 14% 13% 3% 2% 6% 8% 6% Fresh Experienced 76

Male vs Female Employees On the other hand, female participation in both and Non companies has declined by 5 percentage points from 2010 to 2014. The biggest decline was observed within InfoTech cluster, whereby female participation dropped by more than 14 percentage points Non 2014 58% 42% 2014 54% 46% 2010 56% 44% 2010 50% 50% % female participation by cluster: InfoTech SSO CMC InfoTech SSO CMC 2014 2010 2014 2010 2014 2010 2014 2010 2014 2010 2014 2010 30% 44% 45% 42% 47% 47% 45% 47% 46% 47% 47% 54% Male Female 77

Local vs Foreign Employees Number of foreign employees within companies has increased from 10% to 13%, while Non companies have maintained their proportion of foreign employees at 10% over the years. CMC companies registered the highest increment Non 2014 13% 87% 2014 10% 90% 2010 10% 90% 2010 10% 90% % foreign employees by cluster: InfoTech SSO CMC InfoTech SSO CMC 2014 2010 2014 2010 2014 2010 2014 2010 2014 2010 2014 2010 15% 7% 12% 17% 13% 2% 6% 14% 19% 7% 13% 9% Local Foreign 78

Attrition Rate Across both and Non companies, attrition rates of fresh graduate employees have remained consistent over the past 4 years. Attrition of experienced employees on the other hand, has declined by 5-11 percentage points Non 40% 30% 20% 10% 0% 2014 2010 2014 2010 Fresh Experienced Fresh Experienced Fresh Experienced Fresh Experienced 20% 9% 18% 14% 24% 4% 24% 15% Fresh Graduates are defined as employees with less than 1 year of experience Experienced employees are defined as employees with more than 3 year of experience 79

Starting Salary Offered to Fresh Graduates Starting salary offered by companies has improved over the last 4 years, with 32% of them offering RM2,500 and above in 2014 compared to 24% in 2010 2014 2010 RM1,000 to RM1,499 5% RM1,000 to RM1,499 5% RM1,500 to RM1,999 22% RM1,500 to RM1,999 31% RM2,000 to RM2,499 40% RM2,000 to RM2,499 40% RM2,500 to RM2,999 26% RM2,500 to RM2,999 16% RM3,000 to RM3,499 5% RM3,000 to RM3,499 5% RM3,500 to RM3,999 RM3,500 to RM3,999 1% >RM4,000 1% >RM4,000 2% 80

Starting Salary Offered to Fresh Graduates Similarly, Non companies have also increased their starting salary to fresh graduates, with 44% offering RM2,000 and above compared to 39% in 2010 Non 2014 2010 RM1,000 to RM1,499 14% RM1,000 to RM1,499 13% RM1,500 to RM1,999 39% RM1,500 to RM1,999 44% RM2,000 to RM2,499 32% RM2,000 to RM2,499 29% RM2,500 to RM2,999 9% RM2,500 to RM2,999 7% RM3,000 to RM3,499 2% RM3,000 to RM3,499 1% RM3,500 to RM3,999 1% RM3,500 to RM3,999 1% >RM4,000 >RM4,000 1% 81

Annual Salary Increment for Fresh Graduates Meanwhile, salary increment rates have seen the biggest shift within the 5 10% bracket, from 44% of companies offering this range in 2010 down to 36%. Those offering more than 10% increment have improved by 5 percentage points although companies with less than 5% increment have also increased 2014 2010 <2.5% 5% <2.5% 4% 2.5% to 4.9% 19% 2.5% to 4.9% 17% 5.0% to 7.4% 27% 5.0% to 7.4% 24% 7.5% to 9.9% 9% 7.5% to 9.9% 20% 10.0% to 14.9% 28% 10.0% to 14.9% 26% 15.0% to 19.9% 6% 15.0% to 19.9% 5% 20.0% to 29.9% 3% 20.0% to 29.9% 2% > 30.0% 2% > 30.0% 1% 82

Annual Salary Increment for Fresh Graduates Similarly, Non companies registered the biggest change in the 5-10% increment bracket, from 45% of companies offering this in 2010 down to 33% in 2014. Those that offer more than 10% increment have gone up from 24% to 35% Non 2014 2010 <2.5% 9% <2.5% 11% 2.5% to 4.9% 24% 2.5% to 4.9% 21% 5.0% to 7.4% 22% 5.0% to 7.4% 31% 7.5% to 9.9% 11% 7.5% to 9.9% 14% 10.0% to 14.9% 22% 10.0% to 14.9% 16% 15.0% to 19.9% 5% 15.0% to 19.9% 3% 20.0% to 29.9% 5% 20.0% to 29.9% 4% > 30.0% 3% > 30.0% 1% 83

Talent Supply-Demand Gap Analysis 84

Methodology: Estimation of Talent Supply, 2014-2017 Total graduates by field of study* and IHL Actual supply pool for industry 2009-2013 Based on actual graduate statistics Based on historical and projected intake, broken down into: 2014-2017 Types of IHL (IPTA, IPTS, Polytechnic, College Community) Fields of study (IT, Engineering, CMC, Business, Arts) Levels of qualification (PhD, Master, Degree, Diploma, Cert) Total available & employable graduates by field of study* and IHL 2014-2017 * IT, Engineering, CMC, Business and Arts only courses relevant to this study are included for each field of study (see Notes) Notes: Includes all local IHLs - IPTA, IPTS, Polytechnics & Community Colleges Estimation of supply pool takes into consideration 2 key aspects: Graduates available for employment (availability) Quality of graduates (employability) Available supply pool = Total local graduates (those who further studies after graduation and are waiting for placement for further studies) Employable supply pool = Available pool (those who are not confident or interested to work and those who are still not able to secure a job 3-6 months after graduation) Sources of data: IEO Statistics from MOE, JPP and JPKK, 2009-2012/13, MOE Graduates Tracer Study, 2012 Does not include Malaysian graduates from overseas IHLs who return to MY to work after graduation, Malaysian graduates from local IHLs who work in other countries after graduation, Foreign graduates who work in Malaysia after graduation, Malaysian graduates who join an industry different from field of study after graduation, Malaysian graduates from a different field of study who join the ICT industry after graduation Key courses included are: IT Computer science, software engineering, IT, IS, networking, security, mobile, AI, technology management; Engineering Computer, E&E, telecommunication, embedded system, system design, automation; CMC Animation, games design, graphics design, multimedia, VFX, VR, media technology; Business Finance, accounting, investment, business management, e-commerce, marketing, 85 HR, economics; Arts Film, broadcasting, script writing, advertising, performing arts, fine arts, music, language studies

Methodology: Estimation of Talent Demand, 2014-2017 Total graduates required by & Non companies 2014 2015-2017 Estimated based on: Total no. of companies, by company size & cluster Average no. of employees per company, by company size & cluster Average % of fresh graduate employees per company, by company size & cluster Estimated based on: Average annual growth in total no. of employees, 2014-2017 Average annual growth in no. of and Non companies, 2014-2017 Total graduates required by & Non companies by field of study 2014-2017 Estimated based on: % breakdown of current pool of fresh graduate employees by their field of study IT, Engineering, CMC, Business and Arts Talent supplydemand gaps 2014-2017 Gaps in supply and demand of fresh graduates from each of the 5 fields of study based on available supply pool and employable supply pool Sources of data: companies database (by MDeC), SSM Annual Report 2010-2012, demand-side survey with n=1044 companies Note: Does not include demand for graduates in these 5 fields of study by companies in other industries 86

Supply-Demand Gap (Fresh Graduates), 2014-2017 Based on Available and Employable Supply Pool With graduates availability and employability factored in, a shortage of IT graduates of about 5,000 7,000 is estimated for 2014 2017 2014 2017 CAGR 2014-2017 Demand Supply Demand Supply Demand Supply TOTAL (5 fields of study) % requirement of supply pool: 56% % requirement of supply pool: 74% Supply (22,700) + + Supply (13,100) 10.1% -0.1% 28,200 50,900 37,700 50,800 % requirement of supply pool: 166% % requirement of supply pool: 175% IT - Supply (5,300) - Supply (7,600) 9.7% 7.8% 13,300 8,000 17,600 10,000 Note: Supply-demand gaps above are based on the demand by & Non companies in the 3 clusters, and do not include the demand by other industries 87

Supply-Demand Gap (Fresh Graduates), 2014-2017 Based on Available and Employable Supply Pool Supply of Creative graduates also begins to show a minor gap in 2014, which increases to about 1,100 by 2017 2014 2017 CAGR 2014-2017 Demand Supply Demand Supply Demand Supply % requirement of supply pool: 55% % requirement of supply pool: 93% Enginee ring Supply (3,400) + Supply + (400) 9.7% -8.1% 4,000 7,400 5,300 5,700 % requirement of supply pool: 106% % requirement of supply pool: 139% CMC - Supply (200) - Supply (1,100) 11.7% 1.9% 2,900 2,700 4,000 2,900 Note: Supply-demand gaps above are based on the demand by & Non companies in the 3 clusters, and do not include the demand by other industries 88

Supply-Demand Gap (Fresh Graduates), 2014-2017 Based on Available and Employable Supply Pool Meanwhile, although graduates in Business and Arts courses are projected to register a slightly declining growth in the next few years, there will likely be no shortfall in supply 2014 2017 CAGR 2014-2017 Demand Supply Demand Supply Demand Supply % requirement of supply pool: 23% % requirement of supply pool: 32% Business Supply (22,500) + Supply + (19,500) 10.3% -0.7% 6,800 29,300 9,200 28,700 % requirement of supply pool: 34% % requirement of supply pool: 46% Arts + Supply (2,200) + Supply (1,800) 10.6% 0.2% 1,200 3,400 1,600 3,400 Note: Supply-demand gaps above are based on the demand by & Non companies in the 3 clusters, and do not include the demand by other industries 89