Current status of career development and current tasks

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1 APEC Forum on Human Resources Development Sustainable Career Development throughout Working Life Prepared by : Achmed Badaruddin M. Yatim (MALAYSIA) Idea, Strategy and Basic Policy Human resource development is an issue of critical concern for any economy today as the increasing competition in the global market requires the economy to further strengthen its competitiveness and venture into new growth areas. This will requires human resource that is knowledgeable, highly skilled, flexible, creative and imbued with positive work ethics. In this regard, the current fiveyear development plan i.e. the Ninth Malaysia Plan ( ) placed human resource development as one of the top priorities. One of the human resource development thrusts is to create a critical mass of trained, skilled and knowledgeable workforce to sustain economic growth, increase competitiveness and support the transformation into a knowledgebased economy. The strategy to ensure sufficient supply of high quality workforce as required by the industry is to increase the effectiveness and efficiency of the education and training delivery systems as well as career development. In the context of this paper, the scope of career development throughout working life is limited to retraining, skills upgrading as well as life long learning. Current status of career development and current tasks Rapid pace in technological change caused knowledge to obsolete in time. As shown in Diagram 1, technology used changes within three to five years while 50 percent of the technological and specialised vocational knowledge will be outdated within certain period of time. Therefore, the extremely rapid pace of technological change requires workers to be well equipped with the latest skills required by the world of work so as to remain competitive in the global market. 1

2 In view of the above, career development programs in Malaysia will be strengthened with active participation of the Government agencies, employers and private training providers. Diagram 1: The HalfLife Time of needed to be in charge 100 % Computer 1 year Technological 3 years Specialized Vocational 5 years 50% % in Higher Education 10 years School 20 years 0 Based on data from IBM, Years The Department of Skills Development (DSD) (formerly known as National Vocational Training Council) was established to formulate, promote and coordinate technical and vocational training as well as retraining strategy and programs in keeping pace with technological and industrial changes. Some of the functions of DSD are : to assess skill needs; develop the National Occupational Skills Standard (NOSS); implement the national skills certification program under the Malaysian Skill Certificate System; and promote skills training and retraining. 2

3 Two major changes undertaken by DSD to intensify the development of skills training and retraining are the adoption of a new 5level Malaysian Skills Certificate (MSC 1 to 5) and the introduction of a new accreditation approach. The implementation of MSC opened new opportunities for both school leavers and workers to be gainfully employed. Workers with previous skills and experience could have their skills recognized and awarded with the appropriate MSC under the Accreditation of Prior Achievements Program. Worker with MSC 1 & 2 would take up position at production level while worker with MSC 3 & 4 would become supervisor. MSC 5 enables worker to take up position at the management level. Therefore, MSC also promotes and motivates life long learning and upward mobility for skilled workers especially those who are already in the business. Realizing the importance of quality control and assurance, DSD has adopted a stringent procedure by involving three levels of key personnel namely the assessor, internal verifier and external verifier. The assessor and internal verifier are appointed by the accredited centres while the external verifier are appointed by DSD itself. The DSD has expanded rapidly since its inception in Currently, there are more than 1,500 training centres with more than 6,000 programs accredited by DSD. A recent significant event in Malaysian higher education and training sector would be the establishment of Malaysian Qualification Framework (MQF). The MQF is a unified system of national qualifications encompassing higher education and skills training. MQF is a comprehensive structure that integrates, rationalizes, justifies and brings together all qualifications offered into a single interconnected system. The awards are offered by all educational and training institutions as well as workplace training and life long learning experiences. It provides a system for awarding credits for learning in informal settings such as life long learning efforts as well as work place training. Such efforts would be assessed and given the 3

4 appropriate credits through methods such as skill demonstration and knowledge, testimonials, portfolios, products and so on. Diagram 2 OPPORTUNITY TO UPGRADE QUALIFICATION UNDER THE MQF SKILLS TRAINING SYSTEM EDUCATION SYSTEM MASTER MSC 5 MSC 4 DEGREE DIPLOMA MSC 3 MSC 2 MSC 1 CERT. SCHOOL LEAVER WITH MALAYSIAN EDUCATION CERTIFICATE MSC = Malaysian Skills Certificate 4

5 By providing learning pathways and recognition of prior learning and experience, the MQF encourages flexible learning, similar esteem between academic and work place qualifications as well as seamless cooperation between academic and employers and between public and private sectors. Diagram 2 shows that with the implementation of MQF, skills training system and education system are now integrated and no longer separated. All qualifications within the framework would be given the same value and respect. This means increasing opportunity to upgrade qualification for skills training graduate and worker. Malaysian Skills Certificate Level 5 (MSC 5) is equivalent to a university bachelor degree. Therefore, worker with MSC 3 is able to pursue diploma program at university while worker with MSC 4 & 5 are able to pursue degree and postgraduate program respectively at university. The implementation of National Dual Training System (NDTS) commenced in The NDTS is an industrialbased skills training approach modelled after the German system. Its objectives are to make skills training more marketoriented, produce the right skilled workers required by the actual workplace and to build closer partnership with the industry. Trainee or worker in this training scheme will spend 70% 80% of their time at the work place and the other 20% 30% in training institution to learn theoretical foundations. The training would be for a period of four semesters. There are two implementation approaches. The first one is done through Dayrelease approach where trainee/worker spends 34 days per week at work place and 12 days at training institution. The other approach is Block approach whereby trainee/worker spends 34 months at work place and 12 months at training institution. Trainees/workers are given monthly allowance by the employers. On the other hand, employers are given reimbursement from Human Resource Development Fund or tax incentive. 5

6 Current status of public support The Government provides several fiscal and nonfiscal supports to promote career development in Malaysia. Some of the main incentives are : (i) Double Deduction Incentive for Training (DDIT) The DDIT scheme allows companies to deduct their training expenditures twice from gross income to compute tax liability. The employer would send their workers to approved training institutions or by applying to the Malaysian Industrial Development Authority (MIDA) for approval of inplant training programme. Employer who sends its worker for training at approved training institutions would automatically qualified to claim the double deduction incentive from the Inland Revenue Board. (ii) Skills Development Fund The Skills Development Fund (SDF) was set up in 2001 with a matching grant from the Government to promote training and retraining among school leaver and worker. Under the SDF, trainees/workers pursuing industrial training programme at private training institutions accredited by the DSD would receive loan assistance of RM 5,000 per annum for the duration of their course. After the trainees/workers completed their study, the loan and four percent annual administrative charge must be repaid within a maximum 15years period. However, there is a problem of low rate of loan repayment and SDF is taking steps to improve the situation. (iii) Human Resource Development Fund (HRDF) The HRDF was established by the Government in 1993 and it is administer by HRD Corporation (HRDC). HRDF s main objective is to encourage 6

7 employers in the private sector to train, retrain and upgrade the skills of their workers in line with their business needs and the industrialization strategy of the economy. Employers covered under the HRDC Act are required to register with HRDC. These included employers in the manufacturing sector with 50 workers or more and employers with 10 to 49 workers and with paid up capital of or less than RM2.5 million; and employers in the services sector with 10 workers or more for selected industries. However, the registration of employers in the manufacturing sector with paid up capital less than RM2.5 million is optional. HRDF is a levyrebate scheme. Employers in the manufacturing and service sectors who have contributed 1 percent of their workers wages to this fund are eligible to claim a portion of allowable training expenditures incurred for training and retraining of their workers. The rates of reimbursement are from 80 percent to 100 percent depending on the type of training programs. Employers can fully utilize their HRDF levy contribution by sending workers for retraining and skills upgrading under various training schemes implemented by HRDC such as : Approved Training Program Scheme (PROLUS) for approved training program at registered institutions, the Training Grant Scheme (SBL) for external training program from nonapproved institutions, Annual Training Plan Scheme (PLT) for firms that train workers on regular basis, and Training Grant Scheme for Small and Medium Scale Enterprises. Since its establishment, HRDF has succeeded in encouraging employers to actively retrain and upgrade the skills of their workers. This is evident in the increased number of training places and amount of financial assistance approved to employers for retraining and skills upgrading purposes. Table 1 shows that for the year 2006, a total of 618,267 training places were approved (compared to 546,125 for 2005) with financial assistance amounting to RM347.3 million 7

8 (RM291.9 million for 2005). The SBL scheme accounted for 87.6 percent of the total training places and 68.2 percent of disbursement. This means the employers prefer inhouse training offered by the external training providers. Table 1: Number of Training Places and Financial Assistance Approved for Retraining According to Scheme of Training (2005 & 2006) Training Scheme Training Places Year 2005 Year 2006 Financial Training Assistance Places (RM million) Financial Assistance (RM million) 1. Training Grant Scheme (SBL) 473, , Approved Training Programme Scheme 10, , Annual Training Plan 2, Agreement with Training Provider Scheme 19, , Apprenticeship Scheme 1, Purchase of equipment Special SBLPKS Scheme 31, , Purchase of computer Computer aided training Graduate Training Scheme 7, , TOTAL 546, , Source: Human Resource Development Corporation,

9 (iv) Small and Medium Industries and Enterprise Development Corporation (SMIDEC) SMIDEC was established in 1996 under the Ministry of International Trade and Industry and its objectives are to promote and coordinate the development of SME in the manufacturing sector into an efficient and competitive sector through the provision of advisory services, fiscal and financial assistance, infrastructural facilities, market access and other support programme including training and retraining. SMIDEC provides financial assistance to SMEs in the form of grants (such as Industrial Technical Assistance Fund Grant Scheme and Grant for Skills Upgrading) and loan schemes. As access to financing is one of the major problem faced by SMEs in their business development, SMIDEC provides various loans for working capital, purchase of fixed assets and project financing to SMEs. Bank Negara Malaysia for instance has setup the Small and Medium Enterprise Special Unit aimed to assist viable SMEs in obtaining financing. For the purpose of skills upgrading of SMEs workers, SMIDEC has appointed more than 21 training providers to undertake industrial training program for SMEs in various skills area such as ICT, Pneumatics, Programmed Logic Control and Electronics. Most of the training providers are state skills development centres. SMEs who send their workers for training and skills upgrading to any approved training provider are eligible for 50 percent training grant from SMIDEC. The remaining cost can be claimed through the HRDF, if the companies registered with HRDC. In order to encourage more SMEs to retrain and upgrade the skills of their workers, the grant for skills upgrading has been increased from 50 percent to 80 percent of the training cost beginning in Both schemes have contributed tremendously in encouraging SMEs to train and retrain their workers. 9

10 Current status of career development for underemployed workers and those in informal sector. As the human resource development policy encourage skills upgrading among all segments of society, career development for underemployed and informal sector workers is not left out. Apart from the usual life long learning and skills upgrading training offered by private training institutions, there are also affordable courses available at the community colleges and civic centres run by the authority and the NGOs. In addition, elearning and distance education offer more places with flexible entry requirements to pursue diploma, first degree and post graduate programs. Financial assistance such as scholarship, soft loan and partial withdrawal of worker s pension fund are provided to encourage life long learning. Conclusion In the context of globalization and Keconomy, high quality human resource has become a necessity. The overall human resource development policy and strategies in Malaysia encourage sustainable career development throughout working life as it is vital for sustainable economic growth. From workers perspective, career development across all levels would enables them to earn more through increased productivity and more importantly to remain employed by meeting the changing needs of the industry. 10