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SKILLS DEVELOPMENT

OVERVIEW OF MALAYSIA’S HISTORY, POLITICS, ECONOMY AND INNOVATION

3.10 SKILLS DEVELOPMENT

In Malaysia, the public and private sectors provide support for skills development.

According to Mohamad Iqbal (2006), firms in Malaysia are encouraged to contribute to human capital development. However, there is no specific legislation or administrative directive placed on them to fulfil these obligations other than the HRDF.

Enterprises that come within the ambit of the relevant legislation are required to contribute to the HRDF. This fund will be used for the purpose of promoting, developing and upgrading the skills of employees; including, providing, establishing, expanding, upgrading and maintaining training facilities (p53).

Meanwhile, in the public sector, the Ministry of Human Resources is the responsible agency to administrate the country’s skills base. The ministry is divided into several

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divisions. Each of these divisions has different roles and functions. The Ministry is divided into several divisions as shown in Table 3.19.

Table 3.19

The Ministry of Human Resources Administrative System Ministry of Human Resource

Department Statutory Bodies and Companies

Advisory Council

Training Institute -Manpower development

-Department of Skills Development

-Labour Department (Peninsular Malaysia) -Occupational Safety &

Health Department -Labour Department (Sabah)

-Labour Department (Sarawak)

-Trade Union Affairs -Industrial Relations Department

-Industrial Court -National Institute of Human Resources

-Social Security Organisation (SOCSO) -Human Resources Development Berhad (HRDB) -National institute of Occupational Safety and Health -Skill

Development Fund Corporation

-National Labour Advisory Council -National Council of Occupational Safety and Health -Wages council

-Japan-Malaysia Technical Institute -Advanced Technology Centre -Industrial Training Institute

Sources: Information compiled from the Ministry of Human Resources website, and Haslinda, Raduan and Kumar (2007)

However, it is not the only ministry that has been given the mandate to fulfil the task, the Ministry of Education, Ministry of Higher Education, Ministry of Entrepreneur and Cooperative Development and Ministry of Youth and Sports also share the duty (Haslinda et al., 2007). Each of these ministries has their own role in promoting

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education and skills training programs in order to ensure the stock of human capital produced is equipped with the skills and knowledge required by the market.

The Ministry of Human Resources, besides governing the country’s human capital development, is also responsible in managing several public training institutions and providing training schemes for the country. The training institutions provide training programs in various fields to facilitate the skills needed by the industrial sector. Among the training institutions under the Ministry are the Japan-Malaysia Technical Institute, Advanced Technology Centre and several Industrial Training Institutes that are located in almost every state in Malaysia. The training schemes meanwhile are administrated by the Human Resources Development Berhad (HRDB), a statutory body of the Ministry of Human Resources. Until now there are about eleven training schemes available. A list of the training schemes is provided in Table 3.20. Each training scheme is specially customised to meet the training needs of industry. A study by Abd Hair, Rahmah and Zulridah (2010) on the impact of training conducted by HRDB on employee’s job performance found that these training schemes improve knowledge, skills and develop positive work behaviour of employees. The training syllabus matches with employee needs and expectation.

Meanwhile, the Ministry of Higher Education and Ministry of Education, besides providing education for the creation of the professional and management sector of the workforce, is also involved in promoting formal skills training programs at secondary and tertiary levels of education. The Ministry of Higher Education through several

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institutions including universities, university colleges, polytechnics and community colleges offer a variety of courses for higher education in professional, semi-professional or specific skills areas (Haslinda et al, 2007). University and university colleges are responsible in preparing the stock of professional and skilled human capital for the job market; meanwhile the polytechnics and community colleges aim to provide industries with workers with skills in engineering, information technology, commerce and service sectors (Ministry of Human Resource, 2009).

Table 3.20

Training Schemes Provide by the Ministry of Human Resources

Training Scheme Scope Remarks

SBL (Skim Bantuan Latihan) Scheme

Employers are allowed to identify their own training needs and implement their own training programs in-line with their operational and business requirements. Training programs can be conducted by internal trainers, external trainers or overseas trainers should the expertise in a specific area is not available locally.

From 2000 to 2011, a total 5,856,622 trainees have been trained

SBL-Khas Scheme

The SBL-KHAS Scheme is implemented to assist employers who are facing cash flow problems to continue with their retraining and skills upgrading of workforce programs during the economic slowdown by using the existing levy balance. This scheme is available to all employers registered with HRDB. Under this scheme, employers do not have to pay or pay a small upfront cost depending on the rate of financial assistance on each training programme. HRDB will directly debit from the employers’ levy account to pay the training fees to the training providers with the authorisation of the employers.

From 2000 to 2011, a total 467,045 trainees have been trained

Annual Training Plan (Plan Latihan Tahunan) Scheme

Under the PLT Scheme, employers are encouraged to analyse and identify their training needs and submit the programs proposed for duration of 12 months period.

Annual Training Plans should be based on training needs identified, which include significant training activities

From 2000 to 2011, a total 31,544 trainees have been trained

Jurupelan Scheme To assist employers, HRDB has approved the Jurupelan Scheme where employers can engage registered training consultants to assist them in identifying training needs, formulating training programs and preparing the annual training plan. Since it is a one-off exercise, there is a need

Until 2011, the scheme has

distributed a total of RM25,279,881

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to ensure that there is a transfer of knowledge and skills in training needs analysis and the preparation of the annual training plan from the consultants to the respective employers in the context of “Change Agent / Client”

relationship. Financial assistance is at the rate of 80% of the consultation fee

Approved

Training Program (PROLUS) scheme

Under the PROLUS scheme, the training providers must register with HRDB and training programs offered have been granted the approved training programme (ATP) status. As such, employers do not have to seek prior approvals when they send their employees to attend training under the PROLUS scheme. Training under the PROLUS Scheme can only be conducted at training providers’ premises offering the training programs

From 2000 to 2011, a total 120,578 have been trained

PERLA (Perjanjian Latihan dengan Penyelia) Scheme

Training under the PERLA Scheme must be conducted at training providers’ premises that offer the programmes

From 2000 to 2011 a total of 72,605 trainees have been trained

Computer Based Training (CBT) Scheme

This scheme enables employers to purchase any training software in the market or to develop training software according to the company’s training needs

Until 2011, the scheme has

distributed a total of RM22,389,393 Information

Technology Scheme

Under the Information Technology Scheme, employers are allowed to purchase desktop computers for the purpose of setting up a Computer Based Training Unit at their headquarters or branches subject to a maximum of RM25, 000 once in every 3 years

Until 2011, the scheme has

distributed a total of RM28,521,707 Purchase of

Training Equipment and Setting up of Training Room Scheme

This scheme enables employers to obtain financial assistance to purchase training equipment in order to equip, to renovate or to improve training room to

encourage more retraining activities. However, the setting up of training room is not inclusive of construction of building, training centre or any payment for rent.

Approved training equipment by HRDB is limited to:

Television, Video player, Overhead Projector, Multimedia, LCD and Direct Projector, White board and screen, Tapes, Slides, Chairs and tables for training room, VCD /DVD player, Training Video, Flip chart stand and Mannequin.

Purchase of training equipment and setting up of training room scheme is at the rate of 80% of purchase cost subject to a maximum 20% of total levy contributed for the previous year

Until 2011, the scheme has

distributed a total of RM37,120,172

Apprenticeship Scheme

The purpose of this scheme is to increase the supply of skilled workers in the industry. Under this scheme, tuition fees incurred will be fully paid by HRDB, whilst

sponsoring employers will pay the monthly allowances to the apprentices

From 2000 to 2011 a total of 10,326 trainees have been trained

SMETAP Scheme The objective of the SMETAP Scheme is to equip SME employees with specialised skills especially for programs that are not widely available in the market. It is also aimed to

From 2000 to 2011 a total of 16,341 trainees have been

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enhance the skills of internal trainers in conducting in-house training, thereby creating a training culture within their companies. Under the SMETAP Scheme, the course fee will be debited directly from the employers’ levy accounts

trained

Source: Information compiled from the Human Resource Development Berhad, Ministry of Human Resources website at http://www.hrdportal.com.my/

Similarly, the Ministry of Education offers technical and vocational schools at the secondary level of education Students in technical and vocational schools are provided with practical and technical based learning. These students will later further their tertiary education at the polytechnic or community colleges with the opportunity to master their skills. Besides the role of these government agencies, several private institutions also complement these educational processes. Table 3.21 visualizes the different stream of the workforce preparation made by each institution.

The government has also set up several bodies to assist in formulating policies and promote training activities. Zainol Abidin (1998) has shown the ways these bodies have supported training culture by ensuring government policies are implemented. These bodies include:

(i) Economic Planning Unit (EPU)

As the centralised unit that responsible in planning the development of domestic human capital, the unit which is managed by the Prime Minister’s office, would plan and gather necessary input that is very useful in enhancing the country skills development. Under EPU, the Ministry of Human Resource, Ministry of Finance, Ministry of Statistic and several other ministries are working together in preparing proposals before submitted to

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the National Development Planning Committee for approval.

(ii) National Development Planning Committee (NDPC)

NDPC is the official body that responsible in formulating the county’s development policy. The committee consist of members from several ministries and Secretary General with the Chief Secretary as the chairman.

Through NDPC, the proposals forward by EPU will be bring to the cabinet for discussion and implementation.

(iii) The National Vocational Training Council (NVTC)

NVTC is responsible in promoting and co-ordinating vocational and industrial training related strategies and programs. The functions include developing the country vocational training programs syllabus, provide certification for vocational training programs and examine the existing training programs for further development.

(iv) Cabinet Committee on Training

It is the highest body of policy makers concerning training development in Malaysia. Chaired by Minister of Education, the committee comprises of members from various sort of background namely from the public sector, private sector, professional body and academicians.

(v) Human Resource Development Council (HRDC)

The main objective of HRDC is to manage the financial assistance for human capital development in Malaysia. Human Resource Development Fund is administrated by this council. Besides of that, HRDC also in charge in determining the types of training programs that are suitable and needed by

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the industries.

Table 3.21

Main Streams of the Education and Training System in Malaysia

Stream Institutions Workforce Preparation

Higher education Universities and other institutions of higher learning, both public and private

Professional and

managerial personnel such as engineers, architects and surveyors

Technical and vocational education

Polytechnics, technical colleges and community colleges

Supervisory personnel such as technical assistants and supervisors

Vocational skills training

Skills training institutions, public and private

Skilled and semi-skilled workers

Source: Pang (2007)

During the Eight Malaysia Plan, about RM42.4 billion was expanded for education and training purposes. And realizing the importance of knowledge and skills in workers, the Malaysian government has increased the amount to RM45.1 billion during the Ninth Malaysia Plan (Malaysia, 2006). From Table 3.22, it can be seen that allocation for tertiary education is the highest figure among all, with RM16.1 billion allocated during the Ninth Malaysia Plan.

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Table 3.22

Development Expenditure and Allocation for Education and Training, 2001-2010 (RM million)

Program 8MP

(2001-2005) Expenditure

9MP (2006-2010)

Allocation Education

Pre-school

Primary Education Secondary Education

Government & Government-aided School (Academic) MARA Junior Science Colleges

Government & Government-aided School (Technical and Vocational)

Tertiary Education Teacher Education

Other Educational Support Programs

37,9220.0 215.7 5,369.3 8,748.1 7,931.2 433.1 383.8 13,403.9 1,368.1 8,816.9

40,356.5 807.3 4,837.3 6,792.8 5,549.1 614.5 629.2 16,069.0 577.7 11,272.4

Training

Industrial Training Commercial Training Management Training

4,450.9 3,930.6 158.6 361.7

4,792.6 4,103.6 179.5 509.5

Total 42,372.9 45,149.1

Source: Ninth Malaysia Plan (2006-2010)

Simultaneous with the huge sum of funds allocated for tertiary education, the number of enrolments at the tertiary level in public and private higher education has also shown an increase. As show in Table 3.23, the total enrolment at tertiary education institutions increased from 574,421 in 2000 to 731,698 in 2005.

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The increase can be explained: First, by the establishment of new universities, university colleges, branch campuses, and polytechnics, as well as community colleges which provide wider access to higher education. (The total number of tertiary education institutions for the years of 2000 and 2005 are shown in Table 3.24).

Table 3.23

Enrolment in Tertiary Education Institutions by Level of Study, 2000-2010

Source: Ninth Malaysia Plan (2006-2010) Level of

Study

Number of Students

2000 2005 2010

Public Private Total Public Private Total Public Private Total Certificate 23,816 81,754 105,570 37,931 94,949 132,880 141,290 143,480 284,770 Diploma 91,398 117,056 208,454 98,953 131,428 230,381 285,690 188,680 474,370 First

Degree

170,794 59,932 230,726 212,326 110,591 322,917 293,650 134,550 428,200 Masters 24,007 2,174 26,181 34,436 4,202 38,638 111,550 5,770 117,320

PhD 3,359 131 3,490 6,742 140 6,882 21,410 270 21,680

Total 313,374 261,047 574,421 390,388 341,310 731,698 853,590 472,750 1,326,340

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Table 3.24

Tertiary Education Institutions, 2000-2005

Institution 2000 2005

Public University

University College Polytechnic

Community College

11 0 11

0

11 6 20 34

Total 22 71

Private University

University College Branch Campus College

5 0 3 632

11 11 5 532

Total 640 559

TOTAL 662 630

Source: Ninth Malaysia Plan (2006-2010)

Second, by the government and private institutions extending financial assistance to students from low-income groups to access to higher education. A total of RM7.9 billion was disbursed by the National Higher Education Fund (NHEF) during the Ninth Malaysia Plan period, benefiting 678,467 students. This was done simultaneously with government agencies, government-linked companies, state governments as well as private organisations such as companies and banks also providing greater financial assistance to students. (See gross enrolment ratio of Malaysia’s higher education institutions from 2000-2008 , Table 3.25).

Table 3.25

Gross enrolment ratio in Higher Education Institution, 2000-2008

Source: Worldbank index

Note: Data are for 2000-2008, the most recent data available

Year 2000 2002 2004 2006 2008

% 26 28 32 31 37

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The increase of allocations for training programs has also contributed to the expansion of output of skilled and semi-skilled workers. As shown in Table 3.26, the output of skilled and semi-skilled human capital from the public training institutions increased from 39,606 in 2000 to 71,876 in the year 2005. Engineering courses contribute the most in the total of skilled and semi-skilled workers output. This is in response to the rapid shift towards capital-intensive and knowledge-based industries as well as the increased utilization of ICT in production processes and services. (Malaysia, 2000). Haslinda et al. (2007) estimated that by 2007 that about 2,000 training providers and institutions had been appointed by the government as a step to promote knowledge and skills development of the workforce (Haslinda et al., 2007).

Nevertheless, if compared, the output of private educational institutions still lags behind public educational institutions. This situation represents an imbalance between the availability in number of private institutions in the Malaysia’s market (Please refer to Table 3.24).

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Table 3.26

Output of Skilled and Semi-Skilled Human Capital by Course, 2000-2010

Source: Ninth Malaysia Plan (2006-2010)

The increase in tertiary education enrolment and output from training institutions has also reflected general employment pattern in Malaysia. With the growth of supply of educated and skilled human capital, a high demand for employment has registered in almost all occupational sectors (see Table 3.27).

Course Number of Trainees

2000 2005 2010

Public Private Total Public Private Total Public Private Total Engineering

Mechanical Electrical Civil

16,428 9,606 5,234 1,588

9,730 2,232 7,378 120

26,158 11,838 12,612 1,708

31,633 17,380 11,677 2,576

17,337 4,866 12,221

250

48,970 22,246 23,898 2,826

56,330 30,966 19,828 5,536

44,627 10,608 33,498 521

100,957 41,574 53,326 6,057

Building Trades

1,417 547 1,964 2,566 1,200 3,766 4,232 2,633 6,865

ICT 903 7,520 8,423 1,016 11,844 12,860 1,853 12,886 14,739

Others 2,133 928 3,061 3,550 2,730 6,280 9,379 1,630 11,009

Total 20,881 18,725 39,606 38,765 33,111 71,876 71,794 61,772 133,566

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Table 3.27

Employment by Major Occupational Group, 2000-2010 (‘000 persons)

Occupational group 2000 2005 2010

Senior Officials & Managers1 Professionals2

Technicians & Associate Professionals3

Clerical Workers4

Service Workers, Shop & Market Sales Workers5

Skilled Agricultural & Fishery Workers6

Craft & Related Trade Workers7 Plant & Machine Operators &

Assemblers8

Elementary Occupations9

639.9 537.9 1,112.9

890.4 1,205.6 1,391.2

844.0 1,493.2 1,159.5

871.6 680.9 1,430.5

991.4 1,558.0 1,376.0

1,263.8 1,568.9 1,153.7

1,018.0 778.4 1,580.8

1,018.0 1,892.2 1,344.9

1,604.8 1,628.7 1,110.2

Total 9,274.6 10,894.8 11,976.0

Source: Ninth Malaysia Plan (2006-2010) Notes:

1 Includes general managers, department managers and senior government officials.

2 Includes graduate teaching professionals, accountants and auditors, and computer system designers and analysts.

3 Includes non-graduate teachers, supervisors and engineering and computer support technicians.

4 Includes administrative clerks, accounting and finance clerks and telephone operators.

5 Includes cooks, travel guides and waiters.

6 Includes farm workers, plantation workers and forestry workers.

7 Includes mechanics and fitters, carpenters and tailor.

8 Includes equipment assemblers, drivers and machine operators.

9 Includes street vendors, domestic helpers and cleaners, and construction and maintenance labourers.

3.11 THE CHALLENGE IN MALAYSIA’S SKILLED HUMAN CAPITAL