The Human Capital Development (HCD) Strategic Reform Initiative (SRI) follows
on from recommendations proposed under the New Economic Model. The SRI focuses on
enhancing and addressing the human capital capabilities and needs of the 12 National
Key Economic Areas (NKEAs) as well as strengthening the skills of Malaysia's labour
The initiatives undertaken through this SRI are implemented via a two-pronged approach,
Workplace transformation, representing the elements required for a workplace to
function effectively; and
Workforce transformation, which focuses on complementing the Government's measures
to enhance human capital by leveraging women's talent, providing comprehensive labour
market data and upskilling and upgrading of the workforce.
The workplace transformation initiative is focused on addressing three main areas,
Modernising labour laws and enhancing the labour safety net
Modernising Malaysian labour laws in line with the needs of a high-income economy
Enhancing the labour safety net to ensure workers are protected during times of
economic transition; and
Strengthening the human resource (HR) management of Malaysian small- and medium-sized
enterprises (SMEs) which make up 99% of local businesses.
Among measures that have been addressed under these areas include increasing the
population's standard of living by introducing a minimum wage for all workers; and
raising the minimum retirement age to 60 years to retain a larger number of local
knowledge workers and pave the way for higher productivity.
The Government is also currently reviewing the Industrial Relations Act 1967 in
an effort to allow more efficient resolutions for unfair dismissals and trade disputes,
ensure effective enforcement of Industrial Court awards; and balance business needs
and employees' rights through conciliation.
The Employment Act 1955 is also under review to ensure the law is in line with emerging
needs of local and foreign employers, as well as with the needs of an industrialising
nation's workforce. Any amendments to the law are aimed at spurring productivity
and efficiency, increasing income levels and protecting employees to support local,
regional and global competitiveness.
In order to ensure public awareness and promote stakeholder engagement on any changes
to labour legislation, the Government also takes measures such as conducting nationwide
roadshows and issuing guidelines on the implementation of the laws.
Strengthening HR Management in SMEs
- The Minimum Wages Order 2012 was fully enforced by the Peninsular Malaysia, Sabah and Sarawak Departments of Labour in January 2014.
- As at December 2014, 98.9% of employers in Peninsular Malaysia had implemented minimum wages, 98.7% in Sarawak and 97.2% in Sabah.
- The National Wages Consultative Council (NWCC) is in the final stage of reviewing the Minimum Wages Order, in line with the NWCC Act 2011 which requires a review at least once every two years.
- The Government announced the introduction of an Employment Insurance System in the Budget 2015 presentation.
In line with Malaysia's high-income goal for 2020, the country's SMEs, which already
contribute to 31% to GDP and employ 60% of the workforce, must account for at least
40% of the economy's output.
This initiative aims to achieve this goal by enhancing the SMEs' performance through
a transformation of their HR processes and capabilities, equipping SMEs with the
tools necessary for maintaining productivity and managing their workforce.
- A tracer study was conducted in 2014 to increase the efficiency of the National Human Resource Centre, with recommendations proposed to enhance the centre's services, revamp the NHRC portal to improve visibility and attract more visitors and reinforce the promotion of NHRC services.
The initiatives implemented under workforce transformation are centred on the following
Upskilling and reskilling the Malaysian workforce
- Upskilling and reskilling the workforce;
- Leveraging women talent; and
- Labour market analysis.
This policy area undertakes a two-pronged approach to build a workforce that is
sufficiently skilled to fulfil the needs of a high-income nation. These measures
comprise upskilling NKEA-specific manpower and providing manpower training programmes.
Upskilling the manpower involved in the 12 NKEAs
This involves engaging industry players, educational institutions and the Government
to develop sustainable, sector-led approaches to address the skill needs of each
In 2012, this initiative focused on developing a skilled workforce for the Oil,
Gas and Energy NKEA. Centred on enhancing the capabilities of the solar photovoltaics
(PV) industry, efforts undertaken in 2012 included:
The Sustainable Energy Development Authority Malaysia (SEDA) commissioned German-based
Renewables Academy (RENAC) to conduct a 10-day Train-the-Trainer (TTT) programme
on the design and installation of grid-connected PV systems.
RENAC also recommended the expansion of existing training facilities at University
Teknologi Mara and the Selangor Human Resource Development Centre following its
evaluation of the two centres.
SEDA held three mini-hydropower plant industry engagement workshops in Perak, Pahang
- In 2014, the Economic Planning Unit was tasked by the Cabinet to lead a Public Skills Institution Audit Exercise across seven Ministries.
- PEMANDU facilitated the establishment of a partnership between the Department of Skills Development, the German-Malaysian Institute and the Malaysian German Chamber of Commerce and Industry in 2014. The scheme involves training with 17 companies.
- The National Talent Enhancement Programme has trained a total of 1,103 trainees as at December 2014, against a target of 682.
- Recognition of Prior Learning, an assessment which allows upskilled employees to demand a higher salary according to his/her expertise, saw the participation of 17,470 employees as at December 2014.
Providing upskilling training programmes for the Malaysian workforce
These upskilling training programmes are provided through the MSC Malaysia MyProCert
Programme (MyProCert), the National Talent Enhancement Programme (NTEP), Industry
Academia Collaboration (IAC) and the Technical Education and Vocational Training
(TEVT) Curriculum and Trainers' Programme.
MyProCert aims to enhance the skills of the Malaysian workforce in line with international
certification standards. Initially offering SAP certification, the programme now
includes other certification partners to cover more skill sets, providing international
professional certification at affordable rates. More information is available at
the following link.
NTEP comprises a 12-month attachment programme with the 12 NKEAs and non-NKEAs under
the five Regional Economic Corridors. The programme was held from June 2011 to December
IAC, managed by the Multimedia Development Corporation (MDeC) and supported by PEMANDU,
enables global technology players to establish strategic alliances with public and
private institutions of higher learning by investing in curriculum development and
Leveraging women's talent
SEDA Malaysia developed and organised four workshops related to renewable energy systems:
- A four-day competency training course on field acceptance test of small hydropower plants. Under the programme, both technical and practical sessions focussed on relevant international standards applicable to small hydro installations.
- Two Train-the-trainers (TtT) sessions related to grid connected solar photovoltaic (GCPV) systems installation and maintenance training were held in June to develop a pool of trainers for the course. A total of 20 trainers were trained for this TtT programme.
- 68 wiremen and chargemen were trained under SEDA Malaysia Grid-Connected Photovoltaic Systems Course during the August-November period.
- Developed a GCPV System Design course to replace the current International Sustainable Power Quality training module following the expiry of SEDA Malaysia’s ISPQ license and decision by ISPQ accreditor Global Sustainable Energy Solutions to cease operations in February.
- MyProCert received nearly 5,000 applications for the 33 skill sets offered during the year. The full list of certification and training programmes is available on www.mscmalaysia.my
- During the year, IAC collaborated with Intel, Agilent, National Instruments and Altera to conduct TtT programmes in the area of embedded systems. As of December 31, 2013, 10,662 knowledge workers have benefitted from IAC programmes, surpassing the target of 8,000 knowledge workers for the programmes.
This measure supports targets outlined under the 10th Malaysia Plan, such as increasing
the female labour participation rate to 55% (2011: 47.9%), which is expected to
raise Malaysia's GDP by 2% annually.
This effort is also focused on a 30% representation of women on the boards of public-listed
companies (PLCs) by 2016.
The Government has embarked on a series of supportive measures to support these
goals, such as:
- Strengthening the platform for upskilling women talent;
- Increasing entrepreneurship activities for low-income earners; and
Advocating a holistic structural social support system for childcare and eldercare
solutions to encourage women to remain in the workforce.
Labour market analysis
- The participation of Malaysian women in the workforce has risen to 53.4% in Q1 2014 from 49.2% in 2012.
- 515 childcare centres were registered with JKM in 2014.
- As part of the Government's effort to subsidise the training of childcare minders, 3,296 childcare minders completed their training in the Kursus Asuhan PERMATA programme in 2014.
- On 16 April 2014, the Cabinet decided to review the possibility of locating workplace childcare centres on levels above the second floor in commercial buildings, following feedback from companies that they are constrained by existing building usage.
- The number of women on boards has risen to just over 10% as at the end of 2014 from 8% in 2012.
- 932 women were trained under the Women's Directors Programme conducted by NIEW, MINDA and LeadWomen in 2014. Of these, 17 have been appointed to boards.
- PEMANDU is studying the feasibility of setting up the 30% Club, a global network of business advocates championing board diversity.
Labour market analysis comprises a critical component in helping the Government
identify and address Malaysia's manpower needs in its transformation towards high-income
status, as well as to plan effective labour policies.
As such, the Government in January 2012 established the Institute of Labour Market
Information and Analysis (ILMIA), whose role among others is to forecast workforce
demand in industry sub-sectors and build a centralised and interactive labour market
- In 2014, ILMIA commenced Phase Two of the ILMIA Portal, which has seen it complete the procurement and installation of a Labour Market Integrated Data Warehouse.