Relevance of Graduates Competence to the Needs of the Labor

Market

Silvina Widya and Fandy Bestario Harlan

Applied Business Administration, Politeknik Negeri Batam, Jl. Ahmad Yani, Batam Centre 29461, Indonesia

Keywords: Relevance, Graduates Competencies, Labor Market Needs.

Abstract: This research examines the relevance between graduates’ competencies and competencies needed in the labor

market, especially those in Batam. The respondents studied were Alumni of The Applied Business

Administration Study Program. The analytical approach used is a descriptive static analysis and multiple

correlation analysis. This study showed that the level of relevance between graduate competencies to

competency needs in the labor market is 71% which means it falls into the "relevant" category.

1 INTRODUCTION

Financial conditions can determine the level of

welfare of a country's people. Financial growth can be

improved by opening opportunities and jobs so that

the labor force can be absorbed to the maximum. The

government's expected financial target can be

achieved if growth in the industrial sector can also

reach the target as desired. Therefore, the efforts that

must be made to achieve the growth target in the

industrial sector is the fulfillment of a superior and

competent workforce following the needs of the

growing industry. However, in reality there is a gap

between competence and the needs of industry,

especially in Indonesia today.

Recorded in the central statistics data by the

Central Bureau of National Statistics in 2020 as of

August, that there are 52% of the poor working group

of 138.22 million people in the workforce in Indonesia

(Badan Pusat Statistik Nasional, 2020). The workforce

in Indonesia is still dominated by elementary to junior

high school graduates where the level of quality and

competence can be said to be relatively low or below

current industry standards. Based on McKinsey

Global Institute data in 2012 that listed in study by

Handayani (2015), the number of labor availability is

greater than the number of labor needs, the difference

in the number of labor availability with the number of

labor needs is at the smallest number at the college

education level of two million people. This proves that

the chances of availability of college graduates are

higher than other graduates of the education level. The

educational background becomes one of the main

factors that influence the size of competence of a

workforce to be accepted to work.

Vocational education as one of the educational

institutions that have an essential role in preparing

competent human resources for companies or

industries. Vocational education is prepared to print

skilled personnel who are ready to work with various

competencies and able to adapt to the development of

the industry. There are various departments and skills

courses provided by vocational education that are

expected to be a solution for prospective workers to

meet the needs of a growing industry.

Competence is the main factor that a graduate

needs in entering the world of work. Work

competency is the ability possessed by a workforce to

complete a job well. Graduate competencies need to

be designed according to competency needs in the

labor market, so it is important to analyze the

competency level of graduates as an effort to increase

the level of absorption of graduates themselves under

the needs of the world of work so that evaluations of

graduate development can be obtained for the better in

the future. This can also help the government reduce

the number of unemployed graduates which has an

impact on reducing poverty in Indonesia.

2 LITERATURE REVIEW

The Research by Dhruba Borah, Khaleel Malik, &

Silvia Massini entitled “Teaching-Focused

Widya, S. and Bestario Harlan, F.

Relevance of Graduates Competence to the Needs of the Labor Market.

DOI: 10.5220/0010888700003255

In Proceedings of the 3rd International Conference on Applied Economics and Social Science (ICAESS 2021), pages 281-288

ISBN: 978-989-758-605-7

281

University–Industry Collaborations: Determinants

And Impact On Graduates' Employability

Competencies”, aims to explore research on teaching-

focused university-industry collaboration (UIC) by

studying the determinants of university participation

in collaboration as well as the impact of teaching-

focused UIC on graduate employability.

Another research conducted by Pauceanu, AM,

Rabie, N., & Moustafa, A, entitled "Employment

Under The Fourth Industrial Revolution", aims to

identify the perspectives of higher education students

on their work competencies and compare them with

the job skills of the labor market as requested by the

employer.

The Research by Supriati & Tri Handayani with

the title "Relevance of Higher Education Graduates in

Work Placement", aims to determine the level of

relevance of graduates in work placements and

determine competency relevance factors in work

placements. Another study by Yelli Eka Sumadhinata

& Pipin Sukandi entitled "Analysis of the Relevance

of Graduate Competencies to Work Needs", has the

aim of knowing the size of graduate competencies

needed by the world of work.

Titik Handayani researched "The Relevance of

Higher Education Graduates in Indonesia to the Need

for Manpower in the Global Era", and this research

examines the relevance of university graduates in

Indonesia and the need for manpower in the global

era. Another research conducted by Anas Arfandi

with the title "Competency Relevance of Graduates of

Diploma Three in Civil Engineering in the World of

Work", has the objectives of: (1) describing the

relevance of the graduate's field of work with

educational background; and (2) mapping the

relevance of D3 Civil Engineering competencies in

the world of work with D3 Civil Engineering

competencies at FT UNM.

The Research conducted by Mercedes Teijeiro,

PaoIo Rungo & Me Jesus Freire entitled “Graduate

Competencies and Employment: The Impact of

Matching Firms' Needs and PersonaI Attainments”,

aims to study the working conditions of graduates and

the relationship between universities and the labor

market and the role of competence in the relationship

between the two variables. Another study by Ali

Muhson, Daru Wahyuni & Endang MuIyani with the

title "Analysis of the Relevance of Higher Education

Graduates with the World of Work", examines the

level of relevance (suitability) of graduates of

Economics Education at UNY.

The difference in the research that the author will

do with previous studies, lies in the focus of research

which emphasizes the relevance of competence and

different research objects, namely graduates of the

Applied Business Administration study program at

the Batam State Polytechnic in the last six years,

starting from from 2015 to 2020.

2.1 Work Competencies

Competence is the ability possessed by each

individual in the form of knowledge and skills to be

able to do a job in order to achieve optimal

performance. According to research of Muksin &

Kurniawati (2019), competence is the ability to

behave, think and act consistently as a manifestation

of the value of knowledge and skills possessed by a

person in carrying out work. While work competence

is the ability possessed by a workforce to complete a

job. According to UU RI No. 13 Year 2013 About

Employment, competence is the work ability of each

individual covering aspects of knowledge, skills and

work attitudes in accordance with established

standards. Rauner, et al., added that professional work

competencies refer to skills based on a person's

specific intelligence and oriented to freedom from

workers in interacting between humans and

machines. In detail, the most needed work

competencies in the era of technological development

are as follows. (World Economic Forum, 2020)

Table 1: Job Competency Classification.

No Kind Classification Required

Competencies

1 Hard-

Skill

Problem Solving Analytical thingking

and innovation

Complex problem

solving

Critical thingking

and analysis

Creativity,

origanility and

initiative

Reasoning,

problem-solving

and ideation

Technology use

and development

Technology use,

monitoring and

control

Technology design

and

rammin

2 Soft-

Skill

Self-

management

Active learning and

learning strategies

Resilience, stress

tolerance and

flexibilit

Working With

eople

Leadership and

social influence

ICAESS 2021 - The International Conference on Applied Economics and Social Science

282

The world of work has competency standards in

an effort to maintain professional work competencies

that must be met by the workforce under the field of

work. Competency profile in a job is dynamic which

continues to grow following the demand for jobs and

skills required.

2.2 Competency of Business

Administration Graduates

Applied Business Administration Study Program is a

branch of administrative science that integrates the

administrative capabilities of work and tasks with the

ability to manage resources in a work system. Similar

to other study programs, the, Business Administration

Study Program has a standard of competence that

refers to the provisions of the Ministry of

Technology.

The standard of competence that each study

program has in vocational higher education has been

regulated in the Regulation of the Ministry of

Technology. Through competency standards,, the

government becomes easier in controlling the quality

between universities and each other.

Competence of graduates of the Business

Administration Study Program obtained from the

learning outcomes formulated in the Batam State

Polytechnic curriculum (Politeknik Negeri Batam,

2021) which has referred to SN-Dikti

(Permenristekdikti No. 44, 2015) and has a level

under the level of Indonesian National

Qualification/KKNI (Perpres No.8 Year 2014).

2.3 Labor Market Needs

The market is known as a meeting place for the

demand and supply of a product that has added value.

In, the existence of the market is characterized by the

sale and purchase of goods and services as the output

of a production, as well as the concept of the labor

market where labor is part of the production factor.

Labor as input in the production process that will

produce the output of goods and services. Based on

data from the BPS Indonesia, there are a total of

128,454,184 Indonesians of productive age who work

by main occupation. These figures are described in

detail in the following graph. (Badan Pusat Statistik

Nasional, 2020).

Figure 1: Graph of Population Aged 15 Years Old and Over

Employed by Main Occupation.

2.4 Framework

Based on the literature study from the results of

previous research, graduate competencies that refer to

the formulation of learning outcomes according to the

Indonesian National Qualifications Framework

(KKNI) will produce competent graduates according

to the needs of the labor market. However, there is a

need for research on the reality that occurs in every

graduate about how the size of the competency level

that graduates has is under the competencies needed

in the world of work. In addition, there is a need for a

study of the level of relevance of graduates in certain

fields of science that are absorbed in the labor market.

Therefore, it will be analyzed in this study. The

following is the framework of thought formulated in

this research.

Figure 2: Research Framework.

2.5 Hypothesis Development

Hypothesis is a statement of two or more variables, the

relationship between variables is temporary,

speculative or still weak. The weak point in this case

is not the relationship between the variables which is

weak, but the statement made in the hypothesis is true

or not (Ansori, 2020). From the framework of thinking

that is applied, the following hypotheses are built:

Relevance of Graduates Competence to the Needs of the Labor Market

283

H0: There is no relevance/relationship between

the competence of graduates and the competence

of labor market needs kebutuhan

H1: There is a relevance/relationship between the

competence of graduates and the competence of

labor market needs

3 RESEARCH METHOD

3.1 Population and Sample

The population in this study is Alumni of Applied

Business Administration Study Program, Batam State

Polytechnic from 2015-2020. The samples used in the

study were alumni of ABT Study Program who were

respondents where numbered 170 people.

3.2 Data Collection and Measurement

Techniques

The data collection techniques used in this study are

by: (1) Questionnaire/Questionnaire, and (2)

Documentation. While the data measurement

techniques used are validity test and reliability test.

Validity test is conducted to find out the extent to

which the measuring instrument that has been

compiled actually measures what needs to be

measured (Sumadhinata & Sukandi, 2016). In

determining whether or not an item will be used, it is

usually done a correlation coefficient significance test

at a significance level of 0.05. If r calculates ≥ r table,

the instrument or question items are significantly

correlated to the total score (declared valid).

While reliability tests are used to determine the

extent to which measurement results remain

consistent when re-measured against the same

symptoms. The criteria used for determining items

are valid and have acceptable reliability values based

on the following table.

Table 2: Standard Criteria for Validity and Reliability of

Research Instruments.

Cate

Reliabilit

Validit

Good

0.8 0.5

Acceptable

0.7 0.3

Mar

inal

0.6 0.2

3.3 Descriptive Statistical Analysis

The research method used is a method of descriptive

quantative statistical analysis, which is an analysis

whose data can be calculated to produce quantitative

interpretations that include the level of availability of

graduates as well as the level of competence of labor

market needs. While determining the level of

relevance of competence to the needs of the labor

market is calculated through the following equations.

(Wagiran, 2015).

     

   

Percentage (%) =

x 100%

(1)

The percentage obtained will be interpreted into

four categories based on normal distribution rules as

in the following table.

Table 3: Standard Guidelines for Relevance of Graduate

Competencies to Labor Market Needs.

Interval Category

81,25% < x < 100% Highly Relevant

62,50% < x < 81,25% Relevant

43,75% < x < 62,50% Less Relevant

25,00 < x < 43,75% Irrelevant

3.4 Normality Test

Normality test is used to see whether the distribution

of data is normally distributed or not. The normality

test in this study can be detected by the Kolmogrov-

Smirnov Test on SPSS 20 with the decision criteria

being if the value of sig > 0.5 then the data is normally

distributed and if sig < 0.5 then the data is not

normally distributed. A good regression model when

it has a normal value, the normality test is carried out

on the residual value not on each variable

(Seytoningrum, 2002).

3.5

Correlation Analysis

Correlation analysis is one way to determine whether

there is a linear relationship between variables.

In this

study, correlation analysis was used to determine the

level of relationship between graduate competencies

and competency needs in the job market. The basis

for decision making in multiple correlation analysis is

as follows:

If the value of Sig. F < 0.05, then correlated

If the value of Sig. F > 0.05, then there is no

correlation

Meanwhile, to be able to provide an interpretation

of the correlation coefficient found is large or small,

it can be guided by the provisions listed in the

following table:

ICAESS 2021 - The International Conference on Applied Economics and Social Science

284

Table 4: Interpretation Guidelines for Correlation

Coefficients.

Correlation Interval Relationshi

Level

0,00

–

0,199 Sangat rendah

0,20

–

0,399 Rendah

0,40

–

0,599 Sedang

0,60

–

0,799 Kuat

0,80

–

1,000 Sangat kuat

3.6 Hypothesis Test

To test the extent of the influence of the independent

variables partially on the dependent variable, the t-

test is used which is done by comparing the t-count

value with the t-table with a significance level of 5%

of 5%. The basis for decision making in hypothesis

testing (T test) are:

If Sig. < 0.05 / t-count > t-table, then there is a

relevance/relationship between the competency of

graduates and the competency of labor market

needs

If Sig. > 0.05 / t-count < t-table, then there is no

relevance/relationship between graduate

competencies and labor market competencies

4 RESULT

4.1 Validity Test Results

Validity test refers to r-table values, the correlation

value used to measure validity (r-count) must be

greater than the r-table value in order to be declared

valid.

Table 5: Validity Test Results.

Variable Indicator r-count

r-table 5%

(170)

Desc.

Hard-

skill

(X1)

X1.1 0.642 0.1497 Valid

X1.2 0.594 0.1497 Valid

X1.3 0.707 0.1497 Valid

X1.4 0.737 0.1497 Valid

X1.5 0.537 0.1497 Valid

X1.6 0.664 0.1497 Valid

X1.7 0.731 0.1497 Valid

X1.8 0.654 0.1497 Valid

X1.9 0.687 0.1497 Valid

X1.10 0.648 0.1497 Valid

X1.11 0.658 0.1497 Valid

X1.12 0.577 0.1497 Valid

X1.13 0.662 0.1497 Valid

X1.14 0.707 0.1497 Valid

X1.15 0.688 0.1497 Valid

Soft-skill

(X2)

X2.1 0.756 0.1497 Valid

X2.2 0.771 0.1497 Valid

X2.3 0.777 0.1497 Valid

Variable Indicator r-count

r-table 5%

(170)

Desc.

X2.4 0.766 0.1497 Valid

X2.5 0.749 0.1497 Valid

X2.6 0.749 0.1497 Valid

X2.7 0.665 0.1497 Valid

X2.8 0.708 0.1497 Valid

X2.9 0.713 0.1497 Valid

Labor

Market

Needs

(Y)

Y1 0.671 0.1497 Valid

Y2 0.533 0.1497 Valid

Y3 0.419 0.1497 Valid

4.2 Reliability Test Results

The criteria of a questionnaire question item are

declared reliable if the calculated alpha value is

greater than 0.70. The reliability test result of all

questionnaire statement items is 0.953, the value is

greater than 0.70, so all statement items can be said to

be reliable/consistent as following table.

Table 6: Reliability Test Results.

Variable Cronbach’s

Alpha

Cut off

Cronbach’s

Alpha

Desc.

X1 0.942 0.7 Reliable

X2 0.969 0.7 Reliable

Y 0.953 0.7 Reliable

4.3 Respondent's Identity

The respondents taken in this study are graduated

student of the Polibatam Business Administration

Study Program from the 2015-2020 graduation year,

which is determined by the number of respondents as

many as 170 people. This research was conducted by

disseminating questionnaires through Google Form.

The characteristics of respondents in this study

include alumni status, waiting time to get a job, part

of job placement and position in the company as in

the following table.

Table 7: Respondent Identity.

No Category Sub-Categories

Percentage

(%)

Graduate

Status

Work

Not Working

Entrepreneurial

Continuing Studies

Waiting

Time to Get

a Job

< 6 months

before graduation

< 6 months after

graduation

Relevance of Graduates Competence to the Needs of the Labor Market

285

No Category Sub-Categories

Percentage

(%)

> 6 months

before graduation

> 6 months after

graduation

Work

Placements

Section

Administration 25

HRD 12

Finance 8

Front-Liner 6

Technical 5

Other 44

Position In

The

Company

Owner 2

Middle

Management

First-Line

Management

Non-

Management

4.4 The Level of Availability of

Graduates of the Applied Business

Administration Program of

Polibatam

Graduate data is classified into 4 categories, namely:

work, non-employment, entrepreneurship, and

continuing studies. Analysis of graduate data using

statistics techniques in percentage form based on

categories as in the following table:

Table 8: Graduate Availability Levels.

Category Percentage (%)

Work 59 66 59 71 76 45 63

Not Working 41 34 35 25 19 43 33

Entrepreneurial 0 0 7 4 3 12 4

Continuing

Studies

0 0 0 0 1 0 0

Sum

Based on table 6, the highest average percentage

is in the working category of 63%, so it can be said

that graduates of the Applied Business

Administration Program Polibatam have been

absorbed in the world of work.

4.5 Level of Competency Needs in the

Labor Market

Business administration competencies required in the

labor market are competencies that must be possessed

by workers graduates of Applied Business

Administration. Therefore, it is necessary to identify

the competencies that become the needs of the labor

market. The business administration competency

item consists of: 15 soft-skill competencies and 9

soft-skill competencies. Here's the percentage of

competencies needed in the labor market.

Table 9: Percentage competency of Overall Labor Market

Needs.

Compete

ncy Type

Number

Compete

ncy Items