July 1, 2015
Do Employers in Malaysia discriminate ?
By Lee Hwok-Aun and Muhammed Abdul Khalid (http://thebside.my/)
For a Full Report read: http://www.tandfonline.com/doi/full/10.1080/13547860.2015.1055948.
Do employers discriminate by race? The question typically elicits immediate and impassioned reactions from opposing ends.
Of course companies discriminate, some assert. It’s a known – even accepted – practice: Q companies prefer to hire Q people. It’s too hard to find suitable candidates from the Q group. The public sector practices pro-X policies, so the private sector reciprocates by favouring Y. Everyone has an anecdote to support their case.
No way, others retort. Why would profit-minded firms hire based on identity? They are only out to get the best quality person for the job. It wouldn’t make sense to prefer one race over another. If Z applicants do not get opportunities, it’s because they are less qualified. Anecdotes are supplied too.
This verbal and anecdotal dueling never ends. Both sides have valid but not decisive arguments, though positions are often exaggerated by personal bias and emotional baggage. Resolving the debate, while trying to avert combustion, requires objective empirical enquiry across a large sample of employers and employees.
Let us first specify the context. Sometimes we speak in code, but face it, the predominant images of labour market discrimination that form in our minds pit Chinese-owned private sector businesses against Malay graduates and a Malay dominated public sector against the non-Malay workforce.
How do we detect whether employers privilege one group and exclude another? We could ask them how they recruit, or ask graduates about their experience finding a job. However, their answers will very likely be biased. Racially discriminating employers will likely not reveal their true intentions, while graduates who feel they have been discriminated may overstate their grievance or may not be fully informed about the circumstances behind their rejected applications.
What about the effect of quality? If Chinese graduates are preferred in the private sector and Malays in the public sector, is it because of race, or is it academic attainment, compatibility of person with organisation, or other factors?
In a recent study, Muhammed Abdul Khalid and I tried to disentangle these gnarled issues. We conducted a field experiment that observes real decisions made by employers on persons they call for interview. Instead of asking employers whether they discriminate, we sent fictitious Malay and Chinese résumés to real job advertisements, then recorded the ones that got called back for interview and compared those with the ones that did not get called.
We ensured that the Malay and Chinese applicants in our pool were similarly qualified. We controlled for quality, in the way that experiments isolate the effect of the determinant in focus by controlling for – in other words, taking away – the effects of other determinants.
Here’s how the experiment went. We generated a pool of fictitious résumés of fresh degree graduates – credible job applicants with invented names and addresses. Résumés were clustered by quality, based on cumulative grade point average (CGPA). Those with CGPA of 3.1 -3.9 were considered “above average”, and those in the 2.2-3.0 range we classified as “below average”. Those with higher CGPA tended to be more impressive in terms of extra-curricular activities, language abilities and other positively regarded attributes.
Since we used CGPA to indicate quality, we chose not to include foreign university graduates. Foreign universities, especially in English-speaking countries, are more highly regarded; holding a foreign degree thus corresponds with being a higher quality applicant. To remove this overlap with CGPA as the quality marker, we confined our applicant pool to graduates of local universities – both public and private institutions.
Our research assistants sent four applications to entry level online job advertisements for engineering and accounting positions, one for each combination of race and quality: above average Malay, above average Chinese, below average Malay, below average Chinese. In total, we sent 3012 resumes to 753 jobs in the private sector. We attempted to apply to public sector jobs as well, but unfortunately could not proceed due to insurmountable technical hurdles
We then recorded callbacks for interview, and observed whether résumés of one race are significantly more likely to be called, after controlling for quality. Just to be clear, let me state again the basic scenario we are scrutinizing: when employers evaluate job applicants that are comparable in all aspects except for race, are they more inclined to one race over the other?
We also compiled data on the companies to which we sent job applications, and derived a profiled for each company based on the group holding a majority of directorships and shareholdings and therefore most likely to exercise control. The main categories that emerged were Chinese-controlled, foreign-controlled (including foreign-local joint ventures), and Malay-controlled, with a smattering of Indian-controlled and mixed-controlled companies (where no group clearly exerted control).
Similar experiments have been conducted and validated around the world, notably in the UK, US, India, and France. All of them find the presence of discrimination, to varying extents, based on race, ethnicity, gender, or caste.
Ours is the first study in Malaysia employing this method. And what did we find? Race matters – a lot. Chinese applicants are much more likely than Malay applicants to be called for interview. Quality also matters, but much less so.
The numbers give us a better sense of our main findings. As shown in the first line of the table, Chinese applicants on the whole registered a callback rate of 22.1 – that is, for every 100 Chinese résumés sent to job ads, 22.1 got called for interview. For every 100 Malay résumés sent, only 4.2 got called for interview. The ratio of these callback rates indicates strong preference for Chinese graduates. For every Malay applicant that gets called, 5.3 Chinese applicants get called. Discrimination was significantly larger in engineering jobs than in accounting jobs.
The gap is smaller, but still large, for higher quality résumés. An above average Chinese applicant is 4.5 times more likely to get called than an above average Malay, while the corresponding ratio for below average Chinese and below average Malays is 6.5.
These findings robustly indicate that private sector employers discriminate in favour of Chinese fresh graduate applicants and against their Malay counterparts. This is not surprising, although the magnitudes probably exceed our hunches.
||Chinese callback rate
|Malay callback rate
|Chinese callback rate per Malay callback rate
Since publicizing these findings in November 2012, two broad criticisms have recurred that are worth discussing here. The first criticism denies that discrimination could occur or tries to explain it away, based on personal or company experience. However, such views overlook important aspects of our research and the extent to which we control for quality.
We have noticed that people, especially employers, refer to scenarios or experiences of filtering out Malay applicants before the interview stage because their academic records, on average, fall short. Sadly but truly, the educational achievement gap between groups remains substantial at graduation from university.
However, this study precisely addresses the issue by ensuring that equivalent numbers of Malay and Chinese applicants attain high CGPAs. Our data show that even top of the class Malays, graduating with CGPAs above 3.6 from the more reputable local universities, are considerably less likely than even below average Chinese graduates to be called for interview.
Another criticism asserts that the study merely confirmed what we “already know” and is thus worth little. True, we may have already known that discrimination existed – but only from personal observation, experience, hearsay, or presumption. Now we have empirical proof, from sample of over 3000 job applications and 750 companies.
More importantly, though, let us not be too convinced and comfortable that we already know all there is to know on the matter. Indeed, we found out much more than we thought we knew. Within the Chinese and Malay applicant pools, personal characteristics besides race impact on the prospects for interview.
Take Chinese proficiency, which is often divisive in discourses on graduate employment. Actually, it should be a more unifying issue. Our study finds that Malays who declare proficiency in Chinese language are more likely to be called for interview than Malays who do not. Chinese proficiency is also an advantage for Chinese applicants, of course.
We also found that type of university or tertiary institution makes a difference, but not entirely in line with common perceptions of “unemployable” public university graduates. Malays holding degrees from Universiti Malaya, Universiti Sains Malaysia, Universiti Kebangsaan Malaysia and Universiti Putra Malaysia – the major and more established public universities – enjoy better than average prospects for getting an interview.
The outlook for University Teknologi MARA (UiTM) graduates varies across job type. In engineering jobs, they are evaluated on par with peers from major public universities, but UiTM accounting graduates are viewed less favourably. On the whole, it is Malay graduates of private institutions who face the slimmest chances of getting called for interview.
Of course, this study would not be quite complete without examining if a hiring company’s profile affects job applicant’s chances. Well, it does, but it is not a simple, caricatured story of Chinese companies obstructing Malay entry. For accounting positions, Malays applying to Chinese-controlled companies are less likely to be called back, compared to Malays seeking work in Malay-controlled or foreign-controlled companies.
For engineering jobs, our results are most interesting. A foreign-controlled company is least likely to call a Malay applicant. However, a Malay engineering graduate has a better chance of getting an interview in a Chinese-controlled firm than a Malay-controlled firm.
We trust and hope our work has shed cool light on a heated and nationally vital subject. Undeniably, this study has limitations.
This research just examines discrimination in selection for interview, not the job offer stage, let alone employment and promotion, which impact further on our economy and society. Investigating discrimination at those levels is exceedingly more controversial and difficult, if not impossible, since it will involve research assistants posing in person as job candidates.
Nonetheless, our findings have broader implications. Our evidence of discrimination means that qualified Malay applicants are potentially being overlooked and excluded from job opportunities. Also, if discrimination occurs at this stage, it probably occurs at later stages as well – although the magnitude is likely to be less than what we observe in this study. Employers are more likely to discriminate at this early job application stage, because there is much less information about job applicants than employed personnel, and the process is impersonal and removed from scrutiny.
More importantly, though perhaps frustratingly for some readers, this research does not directly address the burning question: why do employers discriminate? We too would dearly like to know, but our chief objective was to probe and measure discrimination, and that’s made for a big enough project.
Before generalizing anecdotes or pondering why discrimination occurs, we ought to investigate its form and prevalence, and this field experiment has produced a careful, methodical and objective gauge of this phenomenon.
While we have not produced data to empirically inform why employers discriminate, we have highlighted the complexities of the problem and the need for further investigation.
Our findings demonstrate that factors not revealed in résumés have a major bearing on graduates’ selection for interview – whether related to attitude, compatibility of applicant with company, past hiring experience, or other factors and combinations of factors. Perhaps some employers expect Malay applicants to not socially fit into the company and hence do not bother calling them for interview. Perhaps they feel a need and justification for private sector to counterweigh the pro-Malay policies public sector. We cannot confidently evaluate these arguments without further study. Emphatically, we must not be hasty to blame the discrimination we detect on malevolent motives and racial stereotyping, prejudice or bigotry.
Clearly, there’s more work to be done in this thorny, fertile field. We hope that the cause will be taken up by the academic community, private organizations, governments,… indeed, all of society. These are shared problems demanding shared solutions.
*Dr Lee Hwok Aun is Senior Lecturer in the Department of Development Studies, Universiti Malaya. Dr Muhammed Abdul Khalid is now Research Fellow at Malaysian Institute of Economic Research