Haxa posted a theory…nay, hypothesis on how people might make decisions about maximising their expected lifelong earning. OK, I’m paraphrasing heavily here, but essentially that’s what he’s arguing, i.e. how can people ensure that they are able to minimise loss of employment and/or maximise their earnings by equipping themselves with diverse skills.

I think it’s an interesting idea. And I suspect some economist must have done a study of such behaviour at some point or other. However, Haxa’s hypothesis needs to be refined, and perhaps revised, further, particularly in the Malaysian context.

I’ll use myself as an example.

I have a Diploma in Hotel Management and Catering. I also have a BSc in Economics. I was further educated in International Relations when I completed a two-year research masters degree (MPhil.). I have been certified in Public Relations by the Institute of Public Relations of Malaysia (IPRM). I had, in a past life, obtained a certificate in accounting from the London Chamber of Commerce and Industry (LCCI). I have work experience, both paid and unpaid. I have travelled widely and have lived long periods in different societies. I speak, depending on how you count, at least six languages: English, Malay, French, German, Spanish and Chinese (Cantonese, a smattering of Hokkien and Mandarin). With the exception of Chinese, I can also read and write in these languages. I am also in the process of learning the Russian language.

Thus, for all intends and purposes, I am, as Haxa would call it, a Jack-of-all-trades.

Unfortunately, despite my very abled skills, it has not been easy finding preferred and/or suitable work in Malaysia. Allow me to enumerate the reasons.

(1) In some countries, I am perceived as an individual enriched by life experiences and therefore a highly desirable employee. However, in Malaysia, I am, in general, seen as not being very focused and/or being over qualified.

(2) In some countries, employers look for “basic” skills and abilities. Malaysian employers on the other hand tend to hire on the basis of specific training/education. Thus, in Malaysia, a graduate in Politics would rarely, if ever, be hired as an accountant. This is not uncommon in the UK at the moment. A glance at the advertisements it the Malaysian newspapers would reveal a large majority actually specifying, in a very narrow sense, the sort of degrees Malaysian employers are seeking for particular positions.

(3) Malaysian employers tend to value specific industrial experience very highly. Most still do not to subscribe to the idea of transferable skills or the possible fresh approaches an “outsider” might bring. Thus, if you do not have X number of years of working experience in the particular industry, you would be at considerable disadvantage when trying to obtain employment in that industry.

In short, the deficiency with Haxa’s hypothesis, especially in the Malaysian context, is that if you spend your time equipping yourself with knowledge and/or skills, you are, to some extent, trading off investing in the temporal aspect of work experience which is so highly valued in this country. That is, every extra year you spend studying in university is one year less in the labour market and one year less of work experience in your CV. This leads to a lower probability of being employed, all things being equal. In my case, if I had continued working and did not bother with the undergraduate or the masters degrees, I would now be earning (much) more money (and would hold a higher position) than I presently am.

Of course, you might then argue that it’s easier for someone with additional credentials to “catch-up”. That’s true to some extent. But unfortunately, in an environment where a factor like point (3) plays a crucial role and where time does not stand still for your competitors in the job-market, the ability to “catch-up” is diminished.

The other problem with the argument is the limit of human possibility. In Malaysia, given point (2) above, if you truly wanted to protect yourself from ever being out of work (when different industries move in different business cycles), you’d have to obtain a plethora of qualifications. That would never be possible. You could manage one or two, or even three at most, in your lifetime, but that’s about it. This is not enough to allow you to move across a sufficient number of industries to protect yourself from cyclical unemployment. At least not as long as Malaysian employers continue to hire employees on the basis of very specific requirements. [Caveat: yes, I understand that in medicine, engineering, architecture etc. specific training is absolutely essential.]

Employers need to learn to read beyond the obvious. For instance, I have taught teenagers many times in holiday classes. Instead of brushing off that experience, employers should note that (1) you need to have presentation skills to be able to catch the attention of a bunch of young brats, (2) you need to have good communication skills to hold that attention, and (3) you need to have management skills to sustain their participation over a long period of time. It is not always easier dealing with young people than it is with adults. Adults generally understand the concepts of courtesy and social manners better. But I digress…

All this before going into the matter of age, gender and race!

Finally, there is the general point about instantaneous performance. Unless an employer is hiring a fresh graduate, most employers would expect their employees to start “performing” instantaneously. There will be very little time for “learning the ropes”, certainly not beyond the minimal assimilation of “corporate culture”. So, even if you were equipped with the necessary industrial training/knowledge, unless you have already been working in that industry [which then meets point (3) above], you would probably not be able to “perform” within the short span of time that most employers would expect of mid-career employees. You might, as a mid-career employee, be able to start “performing” earlier and better than a fresh graduate, however, unless employers make allowances for such transitionary periods, you would effectively still be competing with fresh grads who would accept lower pay-cheques.

So, I propose that being a Jack-of-all-trades does not generally lead to a maximisation of expected lifetime earnings. It may maximise your expected period of lifetime employment, but that does not necessarily translate into the maximisation of expected lifetime earnings. You might never suffer from unemployment but you may only be employed at low levels of pay [due to point (3), and perhaps even (2), above]. Since, in most cases, people are not working just for the sake of working, this point is important.

Comments, anyone?

  

Posted on July 24th, 2003 by jl
Filed under: Other Notable Stuff