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The Experience of malaysia through the Human Resources Development Fund

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The 2016 Education and Skills Network meeting is jointly organised by the Department of Labour and Employment, Philippines, ADB, OECD and GIZ and the latter’s regional programme RECOTVET (“Regional Cooperation Programme to Improve the Training of TVET Personnel”), which aims at supporting and creating personnel, institutional and thematic preconditions for quality improvement and regional harmonisation of the education and training of training personnel in South East Asia over the next years.

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The Experience of malaysia through the Human Resources Development Fund

  1. 1. ©2016 Human Resources Development Fund (HRDF) All rights reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the permission of the copyright owner. “We aim to be the human capital development authority in strengthening the economic development of Malaysia” -PSMB Vision PEOPLE | PROWESS | PROGRESS 3 November 2016 By : Rony Ambrose Gobilee Planning, Strategy & Development Division, HRDF
  2. 2. CONTENT P e o p l e | P r o w e s s | P r o g r e s s ABOUT THE HUMAN RESOURCES DEVELOPMENT FUND (HRDF) 1 HRDF ROLES IN HUMAN CAPITAL DEVELOPMENT OF MALAYSIA 2 THE NATIONAL AGENDA ON HUMAN CAPITAL DEVELOPMENT 3 ISSUES & CHALLENGES TO MEET THE NATIONAL AGENDA ON HUMAN CAPITAL DEVELOPMENT 4
  3. 3. P e o p l e | P r o w e s s | P r o g r e s s THE NATIONAL AGENDA ON HUMAN CAPITAL DEVELOPMENT 1
  4. 4. P e o p l e | P r o w e s s | P r o g r e s s Page 4 THE NATIONAL AGENDA ON HUMAN CAPITAL DEVELOPMENT CHAPTER 5: ACCELERATING HUMAN CAPITAL DEVELOPMENT FOR AN ADVANCED NATION The Malaysian Government aims to achieve 35% of skilled workers by Year 2020. Creation of over 1.5 million new jobs by the Year 2020.
  5. 5. P e o p l e | P r o w e s s | P r o g r e s s Page 5 THE NATIONAL AGENDA ON HUMAN CAPITAL DEVELOPMENT The three major occupational groups are skilled workers, semi-skilled and low-skilled. Skilled workers comprise managers, professionals and technicians and associate professionals. Semi-skilled workers comprise clerical support workers, service and sales workers, skilled agricultural, forestry and fishery workers, craft and related trade workers, and plant and machine operators and assemblers. Low skilled workers comprise elementary occupations. Source: Eleventh Malaysia Plan (2016 – 2020), Economic Planning Unit • Skilled workers are projected to comprise 35% of the workforce by 2020. • Existing industries will be encouraged to move up the value chain by investing in high value added activities that require skilled workers Creation of more high-skilled jobs
  6. 6. P e o p l e | P r o w e s s | P r o g r e s s Page 6 HIGHLIGHTS ON HRDF IN THE ELEVENTH MALAYSIA PLAN (11TH MP) Chapter 5: ACCELERATING HUMAN CAPITAL DEVELOPMENT FOR AN ADVANCED NATION FOCUS AREA C Strengthening lifelong learning for skills enhancement EXPANDING HUMAN RESOURCES DEVELOPMENT FUND (HRDF) ACT COVERAGE • The coverage of the HRDF Act, 2001, will be expanded to include more subsectors under the services and agriculture sectors… • …HRDF will also collaborate with SME Corp to provide training to SMEs not covered under the HRDF Act… SUPPORTING PRE-EMPLOYMENT TRAINING THROUGH THE FUTURE WORKERS TRAINING SCHEME • The Future Workers Training (FWT) Scheme will be established under the HRDF to promote pre-employment training focusing on emerging technologies…
  7. 7. P e o p l e | P r o w e s s | P r o g r e s s ABOUT THE HUMAN RESOURCES DEVELOPMENT FUND (HRDF) 2
  8. 8. P e o p l e | P r o w e s s | P r o g r e s s Page 8 Establishment of Human Resources Development Fund (HRDF) through Human Resources Development Act, 1992 2001 Known as Pembangunan Sumber Manusia Berhad (PSMB) via the PSMB Act,2001 2005 Appointment of PSMB as the Training Coordinating Body for SMEs from the National SME Development Council (NSDC) 2020 Malaysia as a Developed and High Income Status with 35% of Skilled Workforce Establishment of National Human Resources Centre (NHRC) as a one-stop centre for SMEs in Human Resources Management 2011 2014 Expansion of the PSMB Act, 2001 to cover 19 new sub-sectors 1993 Implementation of 1Malaysia Globally Recognised Industry and Professional (1MalaysiaGRIP) Programme 2015 2016 Implementation of HRDF Pool Fund
  9. 9. P e o p l e | P r o w e s s | P r o g r e s s Page 9 OUR VISION & MISSION Spearheading the human capital learning and development through strategic interventions that fulfil the current and future needs of the industry To be the human capital development authority in strengthening the economic development of Malaysia MISSION VISION
  10. 10. P e o p l e | P r o w e s s | P r o g r e s s COVERAGE OF PSMB ACT, 2001
  11. 11. P e o p l e | P r o w e s s | P r o g r e s s Page 11 SECTORS COVERED UNDER THE PSMB ACT 2001 MANUFACTURING SERVICES MINING & QUARRYING (Effective June 2014)
  12. 12. P e o p l e | P r o w e s s | P r o g r e s s Page 12 Service Sector 1. Energy 2. Hypermarket/Supermarket/Departmental Store 3. Direct Selling 4. Commercial Land Transport and Railway Transport Services 5. Warehousing Services 6. Port Services 7. Hotel Industry 8. Freight Forwarding 9. Shipping 10. Air Transport 11. Tour Operating Business (In-bound only) 12. Postal or Courier 13. Telecommunication 14. Research & Development 15. Engineering Support & Maintenance Services 16. Security Services 17. Computer Services 18. Advertising 19. Private Hospital Services 20. Higher Education 22. Training 23. Gas, steam and air-conditioning supply 24. Water treatment and supply 25. Sewerage 26. Waste management and material recovery services 27. Food and beverage services 28. Production of motion picture, video and television programme, sound recording and music publishing 29. Information service 30. Tourism enterprise 31. Building and landscape services 32. Event management services 33. Early childhood education 34. Health support services 35. Franchise 36. Sale and repair of motor vehicles 37. Private broadcasting services 38. Driving school 39. Veterinary services SECTORS COVERED UNDER THE PSMB ACT 2001
  13. 13. P e o p l e | P r o w e s s | P r o g r e s s Page 13 1. Electrical and Electronic 2. Metal Product 3. Mineral Product 4. Food and Beverages 5. Transport Equipment 6. Plastic 7. Wood & Wood based and Cork 8. Machinery 9. Industrial Chemicals 10. Paper and Pulp 11. Iron and Steel 12. Rubber Product 14. Furniture and Fixtures 15. Printing and Publishing 16. Textile and Apparel 17. Petroleum and Coal 18. Optical and Photography 19. Glass and Glass Product 20. Petroleum Refinery 21. Footwear 22. Ceramic 23. Tobacco 24. Leather Manufacturing Sector 1. Petroleum and gas extraction 2. Mineral and stone quarrying Mining and Quarrying Sector SECTORS COVERED UNDER THE PSMB ACT 2001
  14. 14. P e o p l e | P r o w e s s | P r o g r e s s Page 14 OUR REGISTERED EMPLOYERS REGISTERED EMPLOYERS 38 SUB- SECTORS 23 SUB- SECTORS 10,077 REGISTERED EMPLOYERS 7,100 1,025,507 EMPLOYEES COVERED 943,810 EMPLOYEES COVERED 2 SUB- SECTORS 58 REGISTERED EMPLOYERS 14,809 EMPLOYEES COVERED 63 SUB- SECTORS 17,235 REGISTERED EMPLOYERS 1,984,126 EMPLOYEES COVERED Services Manufacturing Mining & Quarrying as at 31st August 2016
  15. 15. P e o p l e | P r o w e s s | P r o g r e s s Page 15 EXPANSION OF PSMB ACT, 2001 2014 : Expanding the coverage of the PSMB Act, 2001 so that employers from 19 new sub-sectors can be registered To increase the number of skilled workforce from 28% to 35% by year 2020 This effort is also in line with the NEM which inspires to up-skill the current workforce, in particular those from the bottom 40% of households, by way of continuous training and education. assist Expanding the coverage of the PSMB Act, 2001 so as to provide a wider access to training fund where the number of employees that will be eligible for training under HRDF will increase from 1.77 million in 2014 to 2.8 million in 2020 which is an increase of 58%.
  16. 16. P e o p l e | P r o w e s s | P r o g r e s s HRDF ROLES IN HUMAN CAPITAL DEVELOPMENT OF MALAYSIA 3
  17. 17. P e o p l e | P r o w e s s | P r o g r e s s Page 17 VARIOUS SCHEMES / SERVICES OFFERED BY HRDF HRDF provides its registered employers with various schemes / services in order to encourage employers covered under the Pembangunan Sumber Manusia Berhad Act, 2001 to retrain and upgrade the skills of their employees, apprentices and trainees in line with their business needs and the development strategy of the country. There are 12 schemes / services offered by HRDF, namely: 1. Training Assistance Scheme (SBL) 2. Special Training Assistance Scheme(SBL- Khas) 3. Purchase of Training Equipment and Setting Up of Training Room 4. Information Technology and Computer-Aided Training 5. Industrial Training Scheme 7. Recognition of Prior Learning (RPL) 8. Future Workers Training (FWT) 9. Computer based Training 10. SME Training Partners (SMETAP) 11. Train The Trainer (TTT) 12. SME Training Needs Analysis (SME TNA) 13. SME On-the-Job (SME OJT)
  18. 18. P e o p l e | P r o w e s s | P r o g r e s s Page 18 STATISTICS ON APPROVED TRAINING PLACES AND GRANT DISBURSEMENT 721,797 754,324 781,438 702,232 836,368 589,010 289.02 354.80 402.92 372.42 450.11 454.41 0 50 100 150 200 250 300 350 400 450 500 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 2011 2012 2013 2014 2015 2016* RMmill TrainingPlaces APPROVED TRAINING PLACES GRANT DISBURSEMENT (RM mill) * As at 31st August 2016
  19. 19. P e o p l e | P r o w e s s | P r o g r e s s Page 19 SPECIAL PROGRAMME UNDER GOVERNMENT FUND SMALL AND MEDIUM ENTERPRISES • Training Incentives Programme for SMEs • Skills Upgrading Programme • Training Fund under Minimum Wage EMPLOYEES • 1Malaysia Globally Recognised Industry and Professional Programme(1MalaysiaGRIP) • Train & Replace Programme • 1Malaysia Outplacement Centre (1MOC) FUTURE WORKERS • Apprenticeship Scheme • Housewives Enhancement and Reactivate Talent Scheme (HEARTS) • Future Workers Training (FWT) Scheme COMMUNITY • Special Programme Intended for Community Enrichment (SPICE) • Entrepreneurship Enhancement Skills Programme for Indian Community (EMPhAtIC)
  20. 20. P e o p l e | P r o w e s s | P r o g r e s s THE EFFECTIVENESS OF HRDF • The Net Impact of 1% Levy Payment for SMEs • Effectiveness Study of the Human Resources Development Fund (HRDF) • Outcome-based Study on the Apprenticeship Scheme • Percentage of Skilled Workforce Among HRDF Registered Employers • Effectiveness Study of the Training Incentive Scheme
  21. 21. P e o p l e | P r o w e s s | P r o g r e s s Page 21 THE NET IMPACT OF 1% LEVY PAYMENT FOR SMEs Source: World Bank based on census and survey from Department of Statistics, Malaysia – SME Masterplan 2012-2020 NET IMPACT OF HRDF It is found that training programmes by HRDF indicated a strong positive impact including effects on productivity (Total Factor Productivity and Labour Productivity). The highest impact was on investment in machinery and equipment and capital intensity followed by increase in value added and TFP. This programme also showed increase in labour productivity and wages.
  22. 22. P e o p l e | P r o w e s s | P r o g r e s s Page 22 EFFECTIVENESS STUDY OF THE HUMAN RESOURCES DEVELOPMENT FUND (HRDF) Further findings have shown that training were able to effectively give impacts to the actual business results in terms of … The study found that HRDF training schemes were effective in terms of… Source: Study on the Effectiveness of Human Resources Development Fund (HRDF) by Saujana Edu Urus Sdn. Bhd. • Increasing the employees’ knowledge and skills • Increasing companies’ performance • Improving companies’ productivity level
  23. 23. P e o p l e | P r o w e s s | P r o g r e s s Page 23 OUTCOME-BASED STUDY ON THE APPRENTICESHIP SCHEME APPRENTICE BEING EMPLOYED WITHIN 6 MONTHS AFTER COMPLETION OF TRAINING 96% 95% APPRENTICES SATISFIED WITH THE QUALITY OF TRAINING DELIVERY DONE BY TRAINING PROVIDERS AND SPONSORING EMPLOYERS 97% APPRENTICES RECEIVED STARTING SALARY MORE THAN RM900 (MINIMUM WAGE) 98%SAID THAT SALARY OFFERED BY THEM WERE ALIGNED WITH APPRENTICES’ SKILLS AND EXPERIENCE GAINED BY THEM DURING TRAINING 85%SATISFIED WITH PERFORMANCE SHOWED BY APPRENTICES AT WORKPLACE EMPLOYERS WERE SATISFIED WITH APPRENTICES’ SKILLS AND KNOWLEDGE THAT ARE IN-LINE WITH ORGANISATION’S WORKING ENVIRONMENT. THEY ALSO PROVIDE OPPORTUNITY FOR APPRENTICES TO APPLY THEIR SKILLS IN THE ORGANSATIONS APPRENTICE EMPLOYERS Source: Outcome-based Study on the Apprenticeship Scheme under 2013 Allocation 41.2% APPRENTICES RECEIVED MORE THAN RM1,500 AS THEIR STARTING SALARY 45.9% APPRENTICES RECEIVED MORE THAN RM1,500 AS THEIR STARTING SALARY
  24. 24. P e o p l e | P r o w e s s | P r o g r e s s Page 24 PERCENTAGE OF SKILLED WORKFORCE AMONG HRDF REGISTERED EMPLOYERS 28% 38% SKILLED WORKFORCE Nation HRDF Percentage of skilled workforce under HRDF coverage are 38% Note: Definition of Skilled Workers was based on the Department of Statistics (DOS) job positions category: Managers, Professionals and Technician and Associate Professionals Source: Study on the HRDF Registered Employers’ Employees’ Skilled Bracket 2014 Note: Data were based on NER 2011 by ILMIA, Ministry of Human Resources
  25. 25. P e o p l e | P r o w e s s | P r o g r e s s Page 25 EFFECTIVENESS STUDY OF THE TRAINING INCENTIVE SCHEME FOR SMEs Majority of respondents cited that the scheme has positive impacts on employees in the areas of: Source: Study on the Effectiveness of Training Incentive Scheme (2011/2012 Allocation) by Frost & Sullivan They also have seen the difference between trained employees and non- trained employees under this programme in terms of: Enhanced Job-Relevant Knowledge and Skills Improved productivity Increased Job Motivation of Trained Employees Reduced Levels of Absenteeism (Sick Leaves and No-Shows) • More motivated than non- trained employees • More productive than non- trained employees • More likely to be promoted than non-trained employees • More likely to receive a salary increment than non-trained employees
  26. 26. P e o p l e | P r o w e s s | P r o g r e s s ISSUES & CHALLENGES TO MEET THE NATIONAL AGENDA ON HUMAN CAPITAL DEVELOPMENT 4
  27. 27. P e o p l e | P r o w e s s | P r o g r e s s 1% 99% Certification Certificate of Attendance Page 27 THE EFFECT FROM GIVING FULL AUTONOMY DECISION TO EMPLOYERS TO DETERMINE EMPLOYEES’ TRAINING Analysis on the HRDF internal data was done in order to understand the effect of the existing mechanism. Findings of the study are as follows: • Employers tend to send their employees for non-technical training (e.g.: Teambuilding / Motivation); • Employees were sent to non- professional certification courses; and • Increased in the unutilised HRD levy balance. FINDING 1 FINDING 2 FINDING 3
  28. 28. P e o p l e | P r o w e s s | P r o g r e s s HRDF APPROACH TO OVERCOME THOSE ISSUES & CHALLENGES
  29. 29. P e o p l e | P r o w e s s | P r o g r e s s CURRENT APPROACH / MECHANISM EMPLOYERS LEVY PAYMENT Fulfilling Business Needs COMPANY INDIVIDUAL ACCOUNT BUSINESS PERSPECTIVE • Focusing on Business Plan / Activities • Company Performance Related • Business Sustainability • Business Productivity and Profitability CURRENT MECHANISM Page 29
  30. 30. P e o p l e | P r o w e s s | P r o g r e s s Page 30 THE NEED FOR A DIFFERENT APPROACH EMPLOYERS LEVY PAYMENT Fulfilling Business Needs SUPPORT NATIONAL AGENDA POOL FUND COMPANY INDIVIDUAL ACCOUNT MACRO LEVEL BUSINESS PERSPECTIVE BENEFITS TO THE INDUSTRY MACROLEVEL INTERNVENTION
  31. 31. P e o p l e | P r o w e s s | P r o g r e s s Page 31 THE NEED FOR DIFFERENT APPROACH – IMPLEMENTATION OF HRDF POOL FUND 100% HRD Fund 70% IndividualEmployers Employees’ training by Employers 30% Consolidate 1. Outplacement Centre (Retrenched Workers) 2. Train and Replace (Replacement of Foreign Workers) 3. SMEs Up-skilling & Re-Skilling Programmes 4. Programmes for Future Workers 5. Certification / Value Added Programmes Identified by the Sectorial Training Committees (STCs) / Special Fund for Industrial Association Programmes IDENTIFIED STRATEGICINITIATIVES
  32. 32. P e o p l e | P r o w e s s | P r o g r e s s Page 32 BENEFITS TO THE INDUSTRY Increase labour supply in strategic and high impact areas that have been identified to reduce the country’s dependency on external expertise and support the Government’s aspiration to achieve developed nation status by the year 2020 through a 35% skilled local workforce Equip the Malaysian workforce with more certification-base courses that will enhance the quality of their work; positively impacting the performance of their organisation. Tactical driven skills certifications will allow the Malaysian workforce to gain a competitive advantage over their foreign counterparts working in Malaysia. In addition, employers with skilled workforce will be able to explore new and bigger business opportunities as they become more competitive in the global marketplace. Assist employers of SMEs with insufficient levy balance to continuously train and upgrade the skills of their employees through the use of the pool fund. More funding could be generated to the industries that have identified their specific training needs
  33. 33. P e o p l e | P r o w e s s | P r o g r e s s GET IN TOUCH WITH US
  34. 34. P e o p l e | P r o w e s s | P r o g r e s s Page 34 OUR LOCATIONS Johor Branch No. 50 & 50-01, Jalan Setia 3/7, Taman Setia Indah 81100, Johor Bahru Johor. Tel : (07) 3538121 Fax : (07) 3538217 Northern Branch Tingkat 2, Wisma PERKESO, Lebuh Tenggiri 2 13700, Seberang Jaya, Pulau Pinang. Tel : (04) 3970779 Fax : (04) 3987350 Sarawak Branch Wisma PERKESO Level 4, Lot 436, Section 54, No. 52 Travilion Commercial Centre Padungan 93100 Kuching, Sarawak. Tel : (082) 254 721 Fax : (082) 254 795 Sabah Branch Lot B5, Tingkat 5, Bangunan KWSP, 88598, Kota Kinabalu Sabah. Tel : (088) 260 114 Fax : (088) 252 114 Melaka Branch Lot 4-04, Wisma UTC, Jalan Tan Chay Yan, Off Jalan Hang Tuah 75300 Melaka. Tel: (06) 282 1537 Fax: (06) 282 1536 HEADQUARTERS Pembangunan Sumber Manusia Berhad (545143-D) Wisma HRDF Jalan Beringin, Damansara Heights 50490, Kuala Lumpur. Toll Free Line 1 800 88 4800 General Line: (03) 2096 4800 General Fax: (03) 2096 4999 Website: www.hrdf.com.my I www.nhrc.com.my East Cost Branch Pusat Latihan Hospatiliti Cherating, Perkampungan Cherating Lama, 26080 Kuantan, Pahang. Tel : (09) 581 9250 Fax : (09) 581 9268
  35. 35. P e o p l e | P r o w e s s | P r o g r e s s Page 35 MYHRDF @myhrdf @mynhrc MY HRDF MY NHRC
  36. 36. P e o p l e | P r o w e s s | P r o g r e s s

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