UNDERLYING FACTORS OF CAREER CHOICE Hew Fui Mun, Kamala Yeap & Yeoh Ei Leen INTI International University College Persiaran Perdana, Putra Nilai 71800 Nilai Negeri Sembilan ABSTRACT Graduates are an integral part to today’s employment market. This study has looked at the underlying factors that influence graduates choice of career. The first research objective investigates if the graduates would choose to work in the pathway that they have studied or otherwise. The second objective studies the motivating job factor that prompts the graduates to accept job, and the third objective researches the perception of undergraduates in working for the government, small-and medium-sized enterprises (SMEs) and multinational corporations (MNCs). INTRODUCTION In Malaysia, education has become as integral part of life and paper chase. With the public and private universities and university colleges producing thousands of graduates every year, the market is becoming saturated. Of course the employers are spoilt for choice. But this is not so. Employers do have a difficult time getting the right candidates. When they do identify and employ the right candidates, the employees may not stay or last on the job. Why is this so? Thousands graduate every year and yet there are thousands of vacancies left vacant. Is it because of the perception of today’s graduates or undergraduates in their choice of a career? Do they know the type of job that they would prefer to do? What do these educated youngsters look for in a job? Would they join a small- and medium-sized enterprise, a multinational corporation or opt to start a business on their own? To address these issues the following research was conducted. This research focusing on the factors influencing the choice of career of undergraduates was conducted at a private institution of higher learning. Three objectives, that is, (1) to investigate if the final year students would choose to work in the pathways that they graduated from or alternative available options, (2) to find out the motivating factor that prompts them to accept a job in an organization, and (3) to find out the undergraduates’ perception of working for small and medium-sized enterprises (SMEs), multinationals (MNCs) or becoming an entrepreneur, were identified and studied. The sample used in this study comprised of 140 final year undergraduate students from four pathways, that is, accounting, business administration, finance and marketing. Through a questionnaire survey, the factors influencing the career choice of undergraduates at this private institution of higher learning was studied. LITERATURE REVIEW Studies had been carried out by academics to determine how certain were the undergraduates and graduates of medical-related degree programme in deciding their choice of career (Ellin, Parkhouse and Parkhouse, 1986; Lambert, Goldacre and Turner, 2003; Goldacre, Turner, Fazel and Lambert, 2005). This research shared similar concern where it viewed the certainty of career choice among business graduates as crucial as they had spent the duration of three years in pursuing a major that may or may not be their choice of career when they graduate. If the research results indicated that many of the business graduates inclined to choose a career that was different from their business major, then the public and private institutions of higher learning in Malaysia have to ensure that career counseling will be provided to high school students who intent to pursue a business degree so that they can make well-informed and well- thought of career decision. Literature search discovered that there had been three similar research done in investigating the underlying factors influencing business graduate’s choice of career and if they preferred to work for multinational corporations (MNCs) or small and medium-sized enterprises (SMEs) (Teo and Poon, 1994; Moy and Lee, 2002; Harris, Grubb and MacKenzie, 2006). Moy and Lee (2002, p.340) state that job attributes are the most important factors that influence the choice of career among undergraduates. The job attributes that are important to undergraduates in choosing their career can be broadly categorized into three groups including the job itself, compensation or security and the company or work environment (Moy and Lee, 2002, p.341). This research replicated the factors used by Teo and Poon (1994) and Moy and Lee (2002) to investigate which job attributes affect the Malaysian business graduates’ preferred choice of employment. In addition, this research had also included factors influencing career choice of Malaysian business graduates based on several research of similar area to find out if the relationship between factors influencing career choice and the groups of business graduates’ who chose to work for SMEs, MNCs, government board and run their own business. Teo and Poon (1994) have used 10 factors such as pay, fringe benefits, working conditions, managerial quality and relationships, long-term career prospects, responsibility given, authority, involvement in decision making, marketability and job security in investigating which of these job attributes or factors influenced the choice of employment of first year business undergraduate. Moy and Lee (2002) in their research of the business graduate perceptions of employment in SMEs and MNCs have tested two hypotheses based on nine job attributes. The missing job attribute in Moy and Lee’s (2002) research in comparison with Teo and Poon’s (1994) was authority. Moy and Lee (2002, p.343) found that business undergraduates rated long term career prospects as the most important job attribute affecting their career choice, followed by pay, job security and managerial relationship. Both research revealed that pay, fringe benefits, working conditions, long term career prospects and marketability as significantly less favourable in SMEs than in MNCs. Whereas job attributes such as managerial relationships, responsibility given, authority and involvement in decision making were viewed to be favourable in SMEs due to their perception of SMEs having a flat organization structure and less bureaucratic (Teo and Poon, 1994, p.21-22; Moy and Lee, 2002, p.344). Based on similar job attributes used by Poon and Teo (1994) and Moy and Lee (2002), Harris et al. (2006) have taken academic major, gender and personality into account to determine if there was any relationship between these three variables and business undergraduates’ preferred employment with SMEs and MNCs. They discovered that undergraduates who majoring in management preferred to work in SMEs while the accounting, finance and marketing major preferred to work for MNCs. Female preferred employment with MNCs but male preferred SMEs. There was no finding of any significant relationship between personality and employment preference. It will be interesting to find out if findings from this research concurred with Harris et al. (2006) as the field of study of the business graduates was taken into consideration to study the inclination of accounting, finance, marketing and business administration graduates towards their choice of career. Another empirical research on factors influencing choice of employment found that individuals who prefer to work for an organization feel such a career provides great development of knowledge and skills, job security, higher income, intellectual simulation and the opportunity to work with people they admire and respect (Brenner, Pringle and Greenhaus as cited in Kolvereid, 1996, p.24). The individuals who preferred to work for an organization and those who prefer to operate their own business concurred that their preferred career will provide greater opportunity for continued development, to earn a higher income and to work with people they admire and respect (Brenner et al., as cited in Kolvereid, 1996, p.25). Kolvereid (1996, p.28-29) has included security, economic opportunity, authority, autonomy, social environment, workload (working hours), challenge, self realization, participate in the whole process, responsibility, career opportunity as classes of reasons for employment status preferences in his study. His research found that individuals who chose to work for an organisation rated security, social environment, workload, avoidance of responsibility and career opportunity as the reasons. Those who preferred self-employment rated high on factors such as economic opportunity, authority, autonomy, challenge, self-realisation and participate in the whole process. Similar research reported that student opted for a career in accountancy was due to financial remuneration, experience of chosen subject as a student, impression of the career (Felton, Buhr, Northey, 1994). Therefore, experience of chosen subject as a student did influence student’s choice of career. Another research on factors that are rated as important in influencing career choice of psychiatric graduates (Goldacre et al., 2005) indicated that enthusiasm or commitment, the anticipated hours and working conditions, self appraisal of own skills or aptitudes, experience of chosen subject as a student, influence of a particular teacher. Normative referents, that is, non family group such as teacher (Pimpa, 2007) is identified as one of the factors influencing graduates’ choice of career. This research also attempted to find out if a relationship exists between parental occupation and choice of employment. Although financial remuneration or security is commonly viewed as an important determinant of career choice, several research have shown that graduates who either chose to work for SMEs or to be self-employed did not view pay as important than those who wanted to work for MNCs (Szamosi, 2006, p.662). It is obvious that business graduates chose to work for SMEs or self employment were inclined towards the vast scope of responsibility, challenge, involvement in decision making and the whole management of organisation process. Career opportunity is the obvious factor that influences choice of career in MNCs among business graduates. FINAL YEAR UNDERGRADUATES WOULD CHOOSE TO WORK IN THE PATHWAYS THAT THEY GRADUATED FROM OR OTHER AVAILABLE OPTIONS Out of 140 respondents selected from the private higher learning institution in Malaysia, approximately 55 percent were Malaysian students and 45 percent were international students. Both groups were in their final year when the survey was carried out. These 140 final year students came from four different cohorts of study; Accounting (25 percent), Finance (0.7 percent), Marketing (30 percent) and Business Administration (44.3 percent). With reference to this, it is consistent with the findings that majority of the respondents (48.8 percent) opted marketing and management/administration fields as their first choice of long term career. In Malaysia, there are various opportunities offered to Business graduates and positions offered to these graduates are related to the position as Sales and Marketing executives as well as Management Trainees. In addition, there were 10.4 percent of respondents who opted accounting field as their first choice of long term career and this number absolutely comes from the accounting undergraduates. Accounting is a specialized field and students from non- accounting cohorts could not enter into the field. The issue arising from this finding is there were 25 percent accounting undergraduates in this study but not even half of them selected the Accounting field as their first choice of long term career. Perhaps, these Accounting undergraduates preferred to start up their own business as there were 19.2 percent of respondents who opted this as their first choice of a long term career. This could be attributed to the respondents’ parents’ careers. In this study, there were 58.6 percent of the undergraduates’ parents who have their owned business (self-employed) and it is believe this could lead to the undergraduates’ interest and confidence in the field of entrepreneurship as 19.2 percent of respondents chose this as their first choice meanwhile 26 percent of respondents chose it as their second choice. Studies find that the family appears to play a critical role in a child’s career development (Guerra and Braungart-Rieker, 1999). Trice (1991) has mentioned that parents’ occupation will influence the career aspirations of their children. Majority of these final year undergraduates were uncertain whether they are going to choose a career related to their area of study. This scenario of uncertainty among these 140 respondents was also reflected in the question whether there is a possibility of changing you career after a short period of time. There were 67.9 percent of respondents who said they will probably do so. It is common and normal as career indecision is a phenomenon among the college students as these young kids have yet to step into the career world and this directly causes the feeling of uncertainty. The finding of this study again reflected the sense of uncertainty among the undergraduates as there were 21.4 percent of these final year undergraduates who were still uncertain on their choice of long-term career. However, these uncertainties reduced in line with the duration of study. There were only 15 percent respondents who were certain of their choice of long-term career since their first year in the programme but this have increased to 40 percent when the respondents enter into their final year. MOTIVATING JOB FACTOR(S) THAT PROMPTS UNDERGRADUATES TO ACCEPT A JOB IN AN ORGANIZATION From the analysis of the research findings it was observed that out of the 15 factors that had been identified as factors that may influence the choice of a job/career, salary was listed as extremely important whereas factors such as advice from friends and family, relatedness to subjects learnt as a student, and influence from a particular teacher/lecturer were viewed as somewhat important. Other factors such as working hours, five-day week, working conditions, geographic location, fringe benefits, future financial prospects, marketability, job security, self appraisal of own personality and knowledge, and enthusiasm/commitment as regards to the type of job were viewed as very important. Although salary was listed as extremely important but only 41.7 percent of the respondents did consider this fact as being such with another 38.8 percent considering salary as very important and 16.5 percent as somewhat important. The survey indicated that 2.9 percent of the respondents did not consider salary as an important factor in their selection of a career. Thus it can be stated that not all undergraduates do consider salary as the most important factor when choosing a job. Another interesting factor that was highlighted by this study is that although salary was viewed as extremely important but a large majority of the respondents, that is, 99.2 percent have identified working conditions as either somewhat, very or extremely important. So it can be reiterated that undergraduates do not view salary but working conditions as the most important criteria in their choice of a career. Another factor that undergraduate consider as important in their choice of career is job security where 97.1 percent of respondents have identified this factor as an important criteria in their choice of a job. The importance of other factors such as fringe benefits and future financial prospects were ranked after salary. The influence of a teacher or lecturer was placed as the last factor that undergraduates took into consideration when making a career choice. The sequence of importance given to the 15 elements that were used to study the factors influencing career choice of final year undergraduates can be listed as (in the order of the most important criterion to the least important criterion): (1) Working conditions (99.2 percent); (2) Job security (97.1 percent); Salary (97.0 percent); (4) Fringe benefits (96.5 percent); (5) Future financial prospects (96.5 percent); (6) Long-term career and promotion prospects (95.7 percent); (7) Self-appraisal of own personality and knowledge (95.7 percent); (8) Marketability (93.5 percent); (9) Geographic location (92.8 percent); (10) Enthusiasm/ commitment (88.6 percent); (11) Working hours (86.4 percent); (12) Five-day week (83.3 percent); (13) Advice from friends and family members (75.7 percent); (14) Related to subjects learnt before as a student (68.3 percent) and (15) Influence from a particular teacher/lecturer (62.6 percent). From the above sequence, it can be clearly seen that present day undergraduates give more importance to the working condition of the job and the job security than to monetary gains. Thus it can be agreed with Teo and Poon (1994), and Moy and Lee (2002) that job attributes do contribute to an undergraduate’s career choice. UNDERGRADUATES’ PERCEPTION OF WORKING FOR SMALL AND MEDIUM- SIZED ENTERPRISES (SMES), MULTINATIONALS (MNCS) AND SELF-EMPLOYED Research findings indicated that the final year business undergraduates perceived job attributes (listed in descending order according to responses collected) including fringe benefits, future financial prospects, salary, working condition, job security, long term career prospects, marketability and working hours as better in MNCs in comparison to SMEs. The finding that the final year business students perceived that MNCs can offer better compensation/ security and work environment than SMEs concurs with Teo and Poon (1994) and Moy and Lee (2002). It can be concluded that business graduates from different countries in Asia, United Kingdom, the United States of America and Ireland (Roffe, 1996; Scott and Twomey, 1988 as cited in Moy and Lee, 2002, p.341) perceived SMEs to be less favourable than MNCs with regard to compensation and work environment. The final year business undergraduates perceived job attributes such as managerial quality and relationships, responsibility given, authority and involvement in decision making in MNCs as similar to SMEs. This result is slightly different from the research of Teo and Poon (1994) and Moy and Lee (2002) where the respondents for both research perceived that SMEs to be more favourable than MNCs in terms of managerial relationships, responsibility given, authority and involvement in decision making. But managerial quality and relationships has the highest percentage of favourable response followed by responsibility given among all other job attributes in SMEs. This is due to the perception that SMEs are less bureaucratic and shorter span of control offer much favourable social relationship between superior and subordinate and greater work responsibility has to be assigned to employees due to the near to non existence of job specialization in SMEs. It is clearly shown in the research findings that the final year business undergraduates preferred to work for MNCs, followed by either running their own business or becoming an entrepreneur, to work for SMEs and lastly to work for the government. It is interesting to note that many of the students ranked self-employed as second choice of career after a career in MNCs. This indicated that these students would rather be self-employed than to work for SMEs. This is a serious indication that the unfavourable perception of working with SMEs among business undergraduates could lead to the difficulty of SMEs in employing the “best” business graduates who are equipped with sufficient knowledge and skills that can contribute to the management and development of SMEs. The perception of less favourable job attributes in SMEs could also lead to the unwillingness of fresh business graduates to seek employment in SMEs even though there is availability of job vacancies and thus contributing to the statistics of unemployment rate. But the finding that shown that the final year business undergraduates wanting to run their own business and venture into something new is a sign of independent and ambitiousness among this generation of business graduates. This could also due to a higher percentage, that is, 58.6 per cent of the business undergraduates’ parents are running own business. It could be due to the influence of parent’s occupation (Pimpa, 2007). Almost 80 per cent of final year business undergraduates from various majors preferred to work for MNCs. Research results revealed that a higher number of marketing and business administration undergraduates preferred to run their own business in comparison with those with either a major in accounting or finance. Preference to work for SMEs is higher among the accounting and finance undergraduates than the marketing and business administration graduates. This finding is contradictory to the result of Harris et al. (2006) as their research indicated that the management undergraduates indicated a higher preference to work for SMEs than students from other business majors. CONCLUSION It can be generalized based on the research conducted among the undergraduates on the factors that influence their choice of career, most undergraduates are quite certain of their choice of their career. Most undergraduates are certain of the career path that they would take by the time they reach the final year of study. A small percentage may be unsure of their long-term career but to a large extent the undergraduates are quite certain of the career that they would pursue. Furthermore, undergraduates do not view monetary rewards as the most important deciding factor in their career choice but work conditions and job security. This indicates that if a job was to ensure good working conditions and job security with low monetary rewards, undergraduates will opt to accept the job instead of one with high salary but poor work conditions and low job security. Employers should take notice of this fact as they will have to ensure that these requirements are given the priority. Finally, business undergraduate prefer to work for MNCs than SMEs or set up their own businesses. Whereas accounting and finance undergraduates preferred to work for SMEs. In this event the MNCs and SMEs should direct their recruitment efforts in the right direction so that wastage of resources can be reduced and the appropriate candidates can be recruited. REFERENCES 1. Felton, S., Buhr, N. and Northey, M., 1994. Factors influencing the business student’s choice of a career in Chartered Accountancy. Issues in Accounting Education, 9(1), 131-141. 2. Goldacre, M.J., Turner, G., Fazel, S. and Lambert, T., 2005. Career choices for psychiatry: national surveys of graduates of 1974-2000 from UK medical schools. British Journal of Psychiatry (2005), 186, 158-164. 3. Guerra, A. L. and Braungart-Rieker, J. M., 1999. Predicting career decision in college students: The roles of identity formation and parental relationship factors. The Career Development Quarterly, 47. 4. Harris, M., Grubb., W.L. and MacKenzie, W.I., 2006. Business students’ perceptions of employment in small and medium-sized enterprises versus multinational corporations: Investigating the moderating effects of academic major, gender and personality [online]. In: USASBE/SBI 2006 Best Paper Award Winner. Available from: www.usasbe.org/conference/2006/Best%20Paper%20Award%20Winners.pdf [Assessed 20 August 2007] 5. Kolvereid, L., 1996. Organizational employment versus self-employment: Reasons for career choice intentions. Entrepreneurship Theory and Practice, Spring, 1996, 23-31. 6. Kolvereid, L., 1997. Prediction of employment status choice intentions. Entrepreneurship Theory and Practice, Fall, 1996, 47-57. 7. Moy, J.W. and Lee, S.M., 2002. The career choice of business graduates: SMEs or MNCs? Career Development International, 7(7/6), 334-347. 8. Pimpa, N., 2007. The influence of normative referents on Thai students’ choice of international education [online] Monash Centre for Research in International Education. Available from: http://www.aare.edu.au/01pap/pim01016.htm [Accessed 6 April 2007]. 9. Szamosi, L.T., 2006. Just what are tomorrow SME employees looking for? Education and Training, 45(89), 654-665. 10. Teo, H.A. and Poon, J.T.F., 1994. Career choice of undergraduates and SMEs in Singapore. The International Journal of Career Management, 6(3), 20-26. 11. Trice, A. D., 1991. Stability of children’s career aspirations. The Journal of Genetic Psychology, 152, 137-139.