K55CLC3 GROUP 5 job after graduation

Midterm assignment Econometrics Topic: The impact of employability skills on fresh graduates job opportunities in Ho Chi Minh city Foreign Trade University HCM Campus Lecturer: Le Hang My Hanh Student: Tran Anh Nguyet

FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS

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MID-TERM ASSIGNMENT

COURSE: ECONOMETRICS

THE IMPACT OF EMPLOYABLITY SKILLS

ON FRESH GRADUATES’ JOB OPPORTUNITIES

IN HO CHI MINH CITY

Class: K55CLC3 GROUP MEMBERS:

Nguyễn Hoàng Lan 1601015210 Trịnh Công Minh 1601015259 Nguyễn Như Nguyện 1601015302 Trần Ánh Nguyệt 1601015304

Lecturer: Mrs Lê Hằng Mỹ Hạnh

ABSTRACT

In this study, ordinary least square (OLS) method is used to estimate the parameter of the linear regression model in order to define factors affecting job opportunity of fresh-graduate employees in Vietnam with the data reported by our survey in 2018 The results show that soft skill, technical skill, foreign language and work experience have impacts on the employment rate of fresh graduates in Vietnam With the findings of the significance

of employability skill on job opportunity, the study is useful for both employers and employees Thus, either a good job or good applicant can meet recruiters’ requirements, which implies that both of them can either refer or have more ideas to run their purposes

1 INTRODUCTION

Vietnam education is more and more developing, however, a majority of student seem

it hard to find a job after graduation The number of unemployed graduate students is increasing, and some graduates work in sectors that do not require degrees According to the statistics of the Ministry of Labor, Invalids and Social Affairs, by early 2017 there was 60% of students working in sectors they had not learned about and more than 200,000 unemployed bachelors despite the fact that demand for employees is still high The main cause of this problem is lack of employability skills There is 60% of Vietnamese graduates who are unable to secure employment and need to be re-trained Simultaneously, employers still have difficulty in finding graduates meeting the requirements of knowledge and skills for their workplace, according to OECD (2012) The status is dangerous; therefore, addressing unemployment for workers in general and students in particular is a top concern today The young adult population is beneficial to boost economic development

This study is carried out to determine the important skills which fresh graduates need to apply for a job It shows the impact of employability skills on job opportunity, thus having some recommendations in order to reduce the unemployment rate of graduates in Vietnam

2 LITERATURE REVIEWS AND ECONOMETRIC MODEL

According to several researches, Singh, 2008; AlHady, Zakaria, Omar and Ali, 2011; Hairi, 2011; English Russell Group HEI, 2006; Andreas and Hiroshi, 2011; Kitao, 2001; Irham, Shafinah and Azhari, 2006; Department for Education and Skills, 2007; and Lees,

2002, the job opportunities of fresh graduates in Viet Nam affected by many factors, include the graduate’s soft skill, technical skill, work experience and foreign language

Soft Skills

Working environment is different from university environment, despite the fact that the amount of knowledge that graduates use to work is less than what they’ve learnt at school, since graduates do practical things more than hypothetical jobs Certain activity needs particular skills that are appropriate for it, consequently, they ought to enhance more soft skills for the purpose of working Graduates are taught instructing theory lectures in universities for their future job, yet actual experience is more important to procure skills and attributes

With more studies, Singh (2008) notices that a large part of the young graduates performed well in universities, have great certificates and degrees Nevertheless, these graduates are not so good at abilities, mentalities and comprehension; as they need to confront challenges when entering the working environment (AlHady, Zakaria, Omar and Ali, 2011) Employers today center around discovering good workers who have not just essential scholar skills like reading, writing, science, mathematics but also higher order soft skills like learning, reasoning, thinking creatively, decision making and problem solving (AlHady, Zakaria, Omar and Ali, 2011)

Fallows, Stevens (2000) and Pittenger (2004) have distinguished presentation skills as

a vital aspect of soft skills to advance business graduates' employability within an increasingly competitive and global business environment

Coincidentally, astounding verbal communication skills are additionally essential in order that graduates feel confident about their capacities to communicate such knowledge (Andrews and Higson, 2008) Communication has a relative impact on every part of business Great communication can help work execution and is the basic to build a cohesive and effective team Good communication skills also enable employees to limit the probability of industrial issues in the workplace (Wahab, Bakar, Rosli, and Junoh, 2013)

In the current search for talent workforce scenario by Hairi (2011), bosses require five fundamental soft skills in the working place that is put in the order of significance,

communication skill, teamwork, decision making and problem solving, creative and critical thinking, program and project management skill Communication and teamwork skills are the most important ones of soft skills because those are what employers mostly demand

Technical Skills

There are some jobs requiring technical skills such as specialist knowledge, technological skill, general intelligence, professional skills, experience and competencies, knowledge of other fields, analytical and research Technical skills are the knowledge and abilities which are necessary to do mathematical, engineering, scientific or computer-related duties, as well as other specific tasks acquired through learning and practice

On the survey of English Russell Group HEI (2006) careers service, they show out employers require for main attributes and skills of graduates Firstly, a good degree from a good university serves as a form of “quality assurance” Secondly, work-experience needs

to be developed on time, and enables graduates to get the job quite quickly Thirdly, participation is important as it implies that fresh graduates are a “doer” and a “contributor” and are active; and to self-initiate persons, they also show that they are able to be a part of

a working community

Depending upon economic sectors and the regions, their firm sizes and hierarchical structures, employers require different technical skills for their offers For instance, IT organizations usually request creativity and solid system design skills while the while the knowledge of mathematics, science, and engineering are less important However, fresh graduates, with strong ability to use modern tools and the knowledge of mathematics, science, and engineering, are prioritized by the infrastructure firms; which have been examined by Andreas and Hiroshi (2011)

It has been fiercely debeting about graduates' employability in Ho Chi Minh workforces The economic globalization and rapid changes taking place in Viet Nam create a pressure upon employers in foreign companies To identify and recruit fresh graduates who possess key employability skills suitable to their current demands, employers test technical skills carefully To them, the fundamental requirements which graduates possess are basic education and technical skills are two for recruitment first Be that as it may, what will

influence bosses to fulfill the most are the graduates' capacity to keep adapting freely in the

procurement of new knowledge, skills and technologies for job performance

Foreign language:

According to Weinberg College of Arts and Sciences, foreign language proficiency

consists of a variety set of abilities, including:

 The ability to read and write a foreign language;

 The ability to speak and understand a foreign language;

 Knowledge and understanding of the history and culture of the community

or communities in which the foreign language is spoken;

 The ability to function in culturally-appropriate ways within a community or

communities in which the foreign language is spoken

Foreign language proficiency is a very important factor needed by fresh graduates to be

recruited in Viet Nam If they were good at other languages, the opportunity to get a job is

broad, especially a world-wide language like English English communication is rated as

the most important communication skill and higher than any technical skill because

nowadays, English is used widely in some areas of news and information, business,

diplomacy, professions, travel and also entertainment, according to Kitao (2001)

Based on a research conducted by Irham, Shafinah and Azhari (2006) (as cited in Shafie,

2010), the R&D department administrators have been looking for candidates who have the

abilities to generate and express ideas verbally in English at 90 percent; to give

presentations using English at 90 percent; to write report in English at 60 percent; to speak

English fluently at 60 percent; to have a good command of English language grammar at

30 percent; and to have persuasive skills in English language at 30 percent Almost of

companies in Ho Chi Minh City refer students to have international English certificates

such as TOEIC, IELTS, or TOEFL IELTS which score 6.5 is required to study in foreign

universities or study abroad, or apply for a job of foreign companies

Understanding the importance of using foreign languages, especially English, the

Government has taken many measures to encourage students to learn English One of them

is the Decision 1400/QĐ-TTg, dated on 30 Sept, 2008, which stated that by 2020 Viet Nam

is going to improve English language proficiency for all students in universities accounted for 60 percent by 2015-2016 and 100 percent by 2019-2020 to help them use a foreign language confidently in their daily communication According to The Gallup Organization, Hungary upon the request of Directorate-General for Education and Culture (2010), at least three-quarters of respondents in 24 countries agree that English is very or rather important when recruiting higher education graduates Finally, foreign languages play an important role in the future so students should pay attention to improve English proficiency from the very first days in the university if they want to develop further in their career path

Work experience:

Work experience is all knowledge and skills which is acquired during working period With work experience, employees have more opportunities to get jobs and have a good performance in workplace In addition, it helps employees become more valuable and productive in working According to Department for Education and Skills (2007), employees at all ages can get work experience to develop their key competencies and skills,

as well as upgrading their employability

Majority of students try to work to support themselves when studying at university, as

a result, they get work experience automatically, according to Shabi, (as cited in Lees 2002) The more they work, the more they gain knowledge, develop key skills as well as increase understanding about both themselves and the workplace Work experience can help demonstrate to employers that you are ready for the world of work They are increasingly looking for students who are able to combine excellent academic achievement with practical hands-on experience

Based on our mentioned arguments, this paper addresses and contructs the model to research affecting factors that have impacts on employability of fresh graduates as follow:

JOi = β1 + β2SSi + β3TSi +β4WEi + β5FLi + ɛi (1)

In model (1), JO (job opportunity) is the perceptive employability of a graduate The interpretations of the variables and the expectations of variables’ signs in model (1), βj, are present in Table 1

Table 1: Description of indepentdent variables

Variables Interpretation Scale Expectation of the variables’ signs

and applicability

probability of findings

From the mentioned literature reviews, we deliver the expectations for the variables’ signs:

β2 positive: employers can refer on graduates’ social or community activities or interviewing process to judge their soft skill

β3 positive: employer wants to choose employee with better technical capability

β4 positive: an employee become more valuable and productive in working, especially new one, with pre-exist experience

β5 positive: as English or foreign language used widely in extensive of industries and activities, the more capable as this equal to a higher chance in employability

3 METHODOLOGY

The study follows quantitative research methods The survey to acquire data is conducted in some famous universities for statistical analysis These primary data which describe abilities and knowledge of fresh graduates to evaluate their employability The Linkert scales 1 - 5 for each dependant variables (1 for total disagree and 5 for total agree) Based on the collected data, the paper use probability to describe the perceptive chances for employments of fresh graduates, then proceed to use OLS to estimate the mentioned model (1) to determined the yielding effects on possibility of fresh graduates’ employments

Table 2.1: Measurement scales

Table 2.2: Descriptive Statistics

No Factors/Items Mean Std deviation No Mean Std deviation

1

3

4

5

2

4 DATA ANALYSIS AND DISCUSSION

4.1 Regression model determination and coefficients interpretation

The paper uses the Ordinary least square (OLS) method to estimate Model (1) to define factors affecting job opportunity of fresh-graduate employees in Vietnam The result

is showed in the Table 3

Table 3: Result for sample data regression by Eviews 8

Dependent Variable: JO

Method: Least Squares

Date: 10/16/18 Time: 15:24

Sample: 1 200

Included observations: 200

From the regression acquired by Eviews 8 (Table3), we have the regression model

as follow:

JO = -0.2146 + 0.5196SS + 0.1936TS + 0.2670WE + 0.0773FL

Regression coefficients interpretations:

As we can see from the table, the p-values of 4 independent variables: SS, TS, WE and FL are 0.0000, 0.0423, 0.0001 and 0.3599, respectively All of 3 p-values are less than

α = 0.05 so that we can conclude 3 of the variables have statistical significance, the variables

FL was not statistically significant

β2 = 0.5196: When the confidence on soft skills of the fresh graduate increases by 1%, the possibility and qualification of finding jobs will increase by 0.5196% on average

β3 = 0.1936: When the confidence on technical skills of the fresh graduate increases

by 1%, the possibility and qualification of finding jobs will increase by 0.1936% on average

β4 = 0.2670: When the confidence on work experience of the fresh graduate increases by 1%, the possibility and qualification of finding jobs will increase by 0.2670%

on average

In short, all variables seem to significantly explain the dependent variables and

statistically significant This result met our prediction of signs and expectations based on series of literatures review, as also common senses that soft skill was the most influential factor

𝑅2 = 0.8450: The independent variables of the model account for 84.5% of the variation of the dependent variable, another 15.5% is due to factors not yet included in the model

4.2 Model statistical significance testing

- Hypothesis testing: with ∝ = 5% significant level

(H0: The model is not fitted; H1: The model is fitted)

From the result in Table 3, Pvalue (F) = 0.000000 < α = 0,05

So we can reject the Ho hypothesis The model is statistically significant

4.3 Multicollinearity testing

Multicollinearity phenomenon testing by coefficient of correlation:

Table 4: Coefficient of correlation of model’s variables

Correlations

The Result from table 4 show us there’re significances between independent variables (all ecceeding 0.8) The multicollinearity phenomenon happen in model (1) can be explained from the fact that many students can be good at multiple aspects or take advantage to excel

in other fields Possible solution for this can lie in changing forms or implications of survey questions or notice the student to be vigilant and separative in their responses