The trend towards market-oriented training systems gives an increasingly prominent role to the private sector. Enterprises, in particular, are expected to undertake a proactive role in training. Conversely, the traditional role of the State is evolving from government-led and government-owned training systems towards creating an enabling environment for enterprises and individuals, employers and workers, to invest and actively participate in a collective training effort.
Partnerships and strategic alliances between the interested parties have become the key strategy to improve the relevance, efficiency, effectiveness, equity and sustainability of training policies, systems and programmes. Training is increasingly conceived and promoted as a cooperative effort in which the various relevant institutions in the public and private sectors must participate and share responsibilities. Moreover, the partners concerned are being called upon to contribute to the overall training effort, and to articulate their inputs, making the best possible use of their respective strengths and comparative advantages.
In practical terms, only a few countries have set up a coherent systemic framework and appropriate incentives for these partnerships to flourish on a large scale. Nevertheless, there is already an assortment of innovative and interesting experiences throughout the world which offer options and lessons for promoting public/private alliances in training.
In order to capture the nature, range, and extent of innovations, the constraints faced and opportunities created by these partnerships, the Training Policies and Systems Branch (POLFORM) of the ILO undertook an extensive research programme "Strategic Training Partnerships between State and enterprises". The work between 1995 - 1997 included case studies covering 26 experiences in 14 countries from various regions: Australia, Chile, Denmark, France, Germany, India, Ireland, Ivory Coast, Japan, Malaysia, South Africa, Spain, United Kingdom, United States. Based on these experiences, extensive review of literature and discussions on the subject at national and international levels, analytical, conceptual and policy papers were elaborated.
Preliminary results of the research programme were presented and discussed at numerous seminars and conferences including two major ILO regional meetings, one for Asian countries ("Asian Experiences in Strategic Partnerships between Enterprises and the State", Chiba, Japan, December 1995, in collaboration with the Asian and Pacific Skills Development Programme, APSDEP), and one for Latin American and Caribbean countries ("Strategic Alliances in Training", Santiago de Chile, May 1997, in collaboration with the Inter-American Research and Documentation Center, CINTERFOR).
The research programme also provided a contribution to the ILO Enterprise Forum (Geneva, November, 1996), on the theme "Training for Employability".
The collection of papers produced under this research programme are listed at the back of this document as Training Partnership Papers. They are available in English, French and Spanish from the documentation service of the Employment and Training Department.
The results of the work accomplished in this area, and the experiences, concepts and messages conveyed, have raised considerable interest and contributed to demonstrate possible avenues for innovative ways of rebalancing the roles and responsibilities of the private and public sectors in training. Hopefully, the lessons learned from these experiences will contribute towards building trust and fostering cooperation between the two sectors, stimulating their participation and promoting the best use of their respective strengths in training. It should also help to lay the basis for improving awareness and institutional capacity for collaboration and joint ventures on human resources development and training among a wider span of institutions and interested parties in the public and private sectors.
The variety and dynamism in this innovative and promising area is phenomenal and deserves an on-going effort in accumulating, analyzing and exchanging information, and raising debate at the country, regional and international levels. With this aim, the scope of the programme on Strategic Partnerships in Training will be broadened in the coming years. Readers are encouraged to contact the Training Policies and Systems Branch for further exchange of information and experiences on this theme.
María Angélica Ducci
Chief
Training Policies and Systems Branch
Employment and Training Department
The policy environment for training and education in Malaysia has changed dramatically over the past five years or so. During the 1970s and 1980s, the Malaysian Government assumed the role of the principal agent of social engineering. Education and training were seen as a tool for the redistribution of wealth between the different races. Public training facilities were therefore expanded drastically to provide training for underprivileged groups. Since the late 1980s, and especially in the 1990s, the role of the State has been greatly reduced, with a view to the State acting as a training facilitator rather than a training provider.
A series of strategies have been adopted to put this new policy into effect. Representatives of enterprises have been co-opted into the government planning machinery to ensure that training policies and programmes reflect the needs of the market. Dialogue has been developed with industry associations and private training institutions to provide input for decision-making. A comprehensive tax incentive scheme has been established to overcome a general reluctancy on the part of enterprises to provide training, which was mainly attributable to the high initial capital outlays required for training and the low initial returns. The fiscal measures were supplemented by the adoption of the Human Resources Development Act, making it mandatory for employers to contribute to the Human Resources Development Fund. The Fund collected some RM230 million in levies within the first three years of its inception.
The Malaysian experience illustrates how a policy environment can be rapidly modified to adapt to the needs of industry. The Government has shown great commitment in pursuing its objectives in this respect. One of the most notable features of the Malaysian experience is that the changes have been mainly State-led, as part of the "Malaysia Incorporated" strategy under which the public and private sectors assume the role of partners in development. In accordance with this strategy, in place of its traditional role as a regulator, the emphasis of the State is now on facilitating the private sector in its role as the engine of economic growth. In the field of training, the State has therefore reached out to enterprises to find out their needs and seek ways of responding to those needs.
In very general terms, the impact of this policy reorientation on the national training system has been the provision of more training facilities, a more conscious effort to make training more market-driven and the fact that employers now share a bigger burden of the financing and provision of training.
Training in Malaysia has traditionally been provided by the public sector. However, in recent years, the Government has adopted a policy of involving enterprise in all aspects of training, including planning, curriculum development, standard-setting, financing, co-financing and the management of training centres.
This policy shift reflects the Government's recognition of the need for private sector input into training as Malaysia gears up to attain "developed nation" status by the year 2020. Training needs have become particularly crucial given the emphasis on the development of capital-intensive and value-added industries. The industrialization policy, combined with the increasing shortage of labour in a country with a population of about 21 million, has imposed a strain on the existing national training system. Apart from the need for enterprise involvement to make training more market-driven, the sheer magnitude of training requirements points to the need for enterprises to share the burden of training.
New policy measures were adopted to enlist enterprise collaboration in training. The Second Outline Perspective Plan (1990-2000) (or OPP2) recognized that, in view of the increasing internationalization of the world economy, Malaysia would face more competition in trade and investment. It therefore recommended that the country should be equipped with a strong education and training base, with private sector employers bearing a greater responsibility for industrial training. The Plan outlined various strategies to achieve this goal, including:
A Cabinet Committee was commissioned to propose concrete plans for training in the 1990s. It recommended the privatization of training institutions and the establishment of joint public-private machinery at various levels to improve the coordination and integration of training in accordance with national needs.
Detailed strategies to achieve these objectives were adopted under the Sixth Malaysia Plan, 1990-95. These included:
Numerous measures have been adopted over recent years to promote enterprise involvement in the planning of training. Representatives of enterprises have been co-opted into existing government machinery responsible for planning, training needs assessment, curriculum design and standard-setting. A tripartite board representing the State, workers and employers has been set up by the Ministry of Human Resources, which reports directly to the Cabinet and is responsible for manpower planning in the private sector.
To ensure enterprise participation in policy matters affecting vocational and skills training, a National Vocational Training Council (NVTC) has also been created. The Council is chaired by the Secretary-General of the Ministry of Human Resources and is composed of ten representatives each from the State and from enterprises. Each member serves for a period of three years. The responsibilities of the NVTC include: assessing skill requirements; advising the Government on new vocational training programmes that need to be implemented; and planning, coordinating, monitoring and evaluating training activities and programmes. It is also responsible for setting national trade standards and training syllabuses, as well as implementing a national programme of trade skill testing and certification.
In addition to restructuring formal manpower planning structures, other bodies have been established to provide input into the human resources development planning process. One example is the Malaysian Business Council, a consultative State/enterprise body created in 1991 by the Prime Minister. The Council has nine committees, including one on human resources development, the role of which is to study ways of creating a pool of highly skilled and productive workers to meet future development challenges. The Committee is composed of representatives of the key government agencies directly involved in education and training, individuals from the private sector who hold key positions in industry associations, as well as representatives from education and training institutions. The Committee's recommendations are submitted to the Malaysian Business Council which, although not a government policy-making body, constitutes an important source of policy input for government agencies.
The Government has introduced a series of fiscal incentives to encourage greater enterprise participation in the provision of training. Under the 1991 budget, double tax deduction on training expenses for manufacturing companies undertaking in-house training and external training in approved training institutions (ATI) (1) to upgrade and develop artisanal, supervisory and technical skills, was extended to benefit new manufacturing companies that have not yet commenced production. Companies in non-manufacturing industries sending their employees for training in ATI were also entitled to double tax deduction. The scope of training eligible for double deduction was further extended to include training programmes related to productivity and quality control. Double deduction was subsequently extended to cover "approved training programmes" undertaken by both manufacturing and non-manufacturing companies. One of the criteria for approval was that the training had to be undertaken at approved training institutions in the case of non-manufacturing industries. For the manufacturing sector, the training could be undertaken either in-house or at approved training institutions.
With the establishment of the Human Resources Development Fund (HRDF), employers eligible for training grants from the HRDF were no longer accorded the double tax deduction incentive. However, other fiscal incentives were introduced in subsequent budgets to promote training. These include:
In addition to fiscal incentives, the rules were liberalized for the granting of licences to operate private training centres and institutions. For example, under the new Tourism Industry (Licensing of Tourism Training Institution) Regulations, 1994, applicants are only required to prepare suitable premises after their application has been approved, whereas the previous practice was for applicants to show proof that they already had the premises for the planned courses.
In a related move, the national language policy was liberalized to allow the use of English as the medium of instruction in private institutions of higher learning. Under the Private Higher Education Institutions Act, 1996, private higher educational institutions may, with the approval of the Minister of Education, conduct a course or a substantial part of a course of study in the English language.
Many schemes have been introduced to maximize the sharing of resources between the State and enterprises, and to promote the cross-fertilization of ideas. These include schemes to allow enterprises to make use of public training facilities and for the exchange of trainers between the two sectors.
Under the time sector privatization scheme, enterprises are allowed to make use of state training facilities to train their employees through part-time courses conducted either by the institutes or the enterprise in the evenings, at weekends or during semester breaks. Part-time courses can also be customized, depending on the demand and needs of employers. The curricula for such courses are jointly formulated by the employers and the institutes concerned.
The regular movement of experienced personnel between industry and training institutions is encouraged to ensure that the practical insight gained on the job is translated into training inputs and to ensure continuous exposure to new developments in industrial technologies. To make it more attractive for private sector instructors to serve as part-time lecturers in public training institutions, the Public Services Department is reviewing the fees of part-time lecturers. Other arrangements include establishing exchange programmes with industries and multinational corporations overseas to enable instructors to acquire on-the-job training, and the use of specialized industry staff and retired professionals for occasional lectures, courses and seminars.
A National Apprenticeship Scheme has been set up under which private companies are encouraged to sponsor apprentices. The scheme involves one-and-a-half years' industrial training and one-and-a-half years' on-the-job training. New investors who send apprentices for on-the-job training or to industrial technology institutes for training while waiting for their factories to be built are eligible to claim the reimbursement of the training from the Human Resources Development Fund, provided that the employer is registered with the Fund.
The Ministry of Human Resources is also working closely with industry associations to initiate apprenticeship schemes for registered school-leavers. To encourage greater participation, the Ministry has engaged in dialogue with enterprises and industry associations. An initial grant has been proposed to encourage industry associations to set up specialized training institutions to cater for the specific skill needs of strategic industries.
Enterprises are also being encouraged to set up skills training centres jointly with the Government. The Government contributes part of the initial capital requirement, as well as land and/or premises for the centre, which is usually run by a committee composed of representatives of both the Government and enterprises.
Although no State-owned training centres have yet been restructured along these lines, some existing public institutions are being corporatised.
To ensure that enterprises play a bigger role in financing training, a Human Resources Development Act was adopted in 1992. The Act makes it compulsory for all employers with 50 or more employees to contribute to the Human Resources Development Fund. The levy is 1 per cent of employees' wages.
Although initially only covering manufacturing companies employing 50 or more employees, the Fund was extended to smaller manufacturing firms with 10-49 employees in 1995, at the rate of 1 per cent of their payroll. Firms with 10-50 employees but less than RM25 million paid-up capital can register with the Fund at a contribution rate of only 0.5 per cent of their payroll. The Fund has also been extended to cover employers in nine service industries employing more than ten workers, namely hotel and tourism, computer services, freight forwarding, telecommunications, courier and postal services, advertising, and shipping and air freight.
In essence, the Fund is a form of cost-sharing scheme for retraining and skills upgrading programmes, under which registered employers can apply for training grants to defray part of the allowable costs of training their employees, provided that the training is of direct benefit to the employers and that trainees are Malaysian citizens. It is only intended for employees of companies registered with the Human Resources Development Council and does not cover the pre-employment training of youths or the training of unemployed adults (2) or informal sector workers. However, there are plans to use excess funds to provide training for school drop-outs.
Employers can reclaim up to the limit of the amount of the levy paid in any current year. The rate of assistance originally ranged from 30 to 60 per cent for employers with 200 or more employees, and from 30 to 70 per cent for those with fewer than 200 employees. However, the two-tier system was revised in July 1994 and there is now only a single rate of from 50 to 80 per cent for all registered employers, regardless of the number of employees.
The Fund is managed by a Human Resources Development Council, which is composed of eight employers' representatives, four representatives of government agencies and two independent members. It covers training in managerial, administrative, supervisory, technical, computer, craft and other specialized skills. Enterprise/institution-based training, industry-managed training, cooperative-type training and overseas training all lie within its terms of reference. Under the auspices of the Fund, four training schemes are currently in operation:
Other schemes that are being planned include an industrial automation programme for production workers designed to produce workers with diagnostic and shop-floor skills, and a group training scheme under which employers' and workers' associations can apply for up to RM15,000 to provide training facilities for their members on their premises. To ensure that training is properly supervised, the Council can hire a training coordinator at a monthly salary of RM3,000 for the first three years.
As a result of this government support, enterprises in Malaysia are playing a bigger role in industrial training than ever before. They are also venturing into more specialized fields of training. Some key examples are:
Numerous joint State/enterprise training centres have also been established over the years. The oldest is the Penang Skills Development Centre (PSDC), set up in 1989 jointly by the Penang state government and a group of multinational enterprises. The Centre is now one of the foremost skills training centres in the country.
Inspired by the success of the PSDC, the Selangor Human Resource Development Centre was established in 1992 by the Selangor state government in collaboration with the private sector, with some 15 founder members and seven ordinary members. With the objective of developing skills and abilities in manufacturing, management and services, the Centre, which had an initial grant of RM5 million from the Government, is equipped with RM9 million worth of advanced manufacturing training facilities and is able to train 8,000 persons a year. Like the PSDC, priority is given to the employees of companies registered with the Centre, although its courses are also open to employees of non-member companies. The Centre also runs pre-employment training for youths. To ensure the quality of training programmes and provide opportunities for the workforce to upgrade their skills and qualifications, all the courses conducted at the Centre are validated and accredited by the Boxhill College of Technical and Further Education, Victoria, Australia. This allows trainees using the Centre's modular courses to earn credits towards certificates, diplomas and degrees.
Another example is the Entrepreneurs Vocational Centre, which was set up in Perak with a Government grant of RM4.5 million. Managed by the State Economic Planning Unit and the Perak branch of the Federation of Malaysian Manufacturers, its objective is to produce workers and entrepreneurs who are competitive in various industrial branches. In addition to vocational training, it also conducts courses on how to set up and manage businesses.
Based on the same concept, training centres have also been set up recently in the states of Johore, Melaka, Kedah, Sabah, Sarawak and Negeri Sembilan. Some industry associations have also established training branches, including the Entrepreneurs Skills Development Centre, set up by the Federation of Malaysian Manufacturers, and the Plastic Technology Centre, founded by the Plastics Manufacturers' Association.
The role of enterprises in the direct financing of training has also increased as a result of the Human Resources Development Fund. By 31 March 1995, a total of RM146.9 million had been collected in levies by the Human Resources Development Council. At the same date, the Council had spent a total of RM64.128 million (43.6 per cent) on training for some 398,254 employees. The percentage utilization of the product of the levy rose from 5.5 per cent in the first year to 64.9 per cent in 1994 and 74.2 per cent in the first quarter of 1995.
However, a preliminary study has shown a propensity for larger firms to make greater use of the Fund. By March 1994, small firms with fewer than 100 employees accounted for 39.8 per cent of the employers registered with the Fund, but only 1.6 per cent of them made use of the Fund's training schemes. Conversely, companies with over 1,000 employees accounted for 4.6 per cent of registered employers, while 31 per cent of them made use of the Fund. In sectoral terms, the largest number of registered employers were from the chemicals, petroleum, rubber, electrical machinery, apparel, footwear, wood products and furniture sectors. The electrical machinery subsectors alone accounted for 80 per cent of all trainees under the Training Assistance Scheme (SLB) and 39 per cent of trainees under the Annual Training Plan Scheme (PLT). Other subsectors with a high take-up rate were professional/scientific equipment, electrical machinery, ceramics and minerals. The paper/publishing and wood products/furniture sectors had the lowest take-up rate.
Performance of the HRD Fund as at March 1994
| Company size (No. of employees) |
No. of registered companies | % of companies training under SLB and PLT schemes |
| Below 100 | 1 342 (39.8%) | 1.6 |
| 100-199 | 950 (28.1%) | 3.8 |
| 200-1,000 | 921 (27.3%) | 11.3 |
| Over 1,000 | 158 (4.6%) | 31.0 |
Schemes for the sharing of training resources and facilities between the public and private sectors have not been very successful. Enterprises have shown a general reluctance to accept instructors on attachment or to sponsor apprentices. Potential apprentices find the scheme unattractive due to the lack of certification, while employers are not very enthusiastic in view of the tendency of apprentices to leave the moment they acquire sufficient skills. To overcome these problems, the scheme will be modified to make it more flexible in terms of duration and format in order to encourage more employers to send apprentices for training. "Sandwich" courses will be introduced to increase industry exposure, as well as to shorten institution-based training and make it more market-driven. The apprenticeship contract is also being reviewed to make it more difficult for trainees to leave employers who sponsor them for courses.
In the field of human resources development planning, the policy shift has resulted in more opportunities for the involvement and participation of enterprises in decision-making in the areas of training needs assessment, curriculum design, standard-setting and certification. Enterprise representatives have been co-opted into the planning and decision-making machinery. At the apex is the Tripartite Board of the Ministry of Human Resources, which reports directly to the Cabinet. Half of the members of the National Vocational Training Council (NVTC) are representatives of enterprises, who are also predominant on the National Occupation Skills Standards (NOSS), a specialized body set up to streamline the accreditation system. There are also less formal partnership structures, such as ad hoc technical committees, on which enterprises are often represented by industry associations to look into specific issues. In addition, the relevant government agencies also carry out surveys and initiate dialogue with the private sector on an ad hoc basis to obtain feedback from enterprises on important matters relating to training. By way of illustration, the Ministry of Finance engages in an annual pre-budget dialogue with industry associations and key industrialists, while the Ministry of Human Resources conducts dialogue with industry as and when the need arises.
However, in the absence of a detailed study, it is difficult to assess the current level of representation of enterprises and its impact on human resources development planning. Informal discussions with government officials suggested that representation and influence in planning vary from agency to agency and from case to case. Where a formal partnership structure is in place and where enterprises are represented by senior personnel, as in the case of the NOSS, the NVTC and the Malaysian Business Council, private sector influence on decision-making tends to be stronger. It is especially strong in the NOSS. The Malaysian Business Council, on which key industry leaders and top civil servants are well represented, is an influential body in government decision-making. The Human Resources Development Council, another body dominated by private sector representatives, decides on the training carried out under the Human Resources Development Fund. But the influence of enterprise may not be so great on other ad hoc technical committees set up by the Government to study various issues. There are a number of reasons for this, including the failure of some private sector representatives to attend meetings or take part in dialogue, instances in which junior staff have been sent to meetings, failure to maintain continuity and the general low priority accorded by employers to the matter. Discussions with government officials also show that the response of enterprises to government manpower and other surveys is often poor. All these factors serve to limit input by enterprise into the decision-making process.
One of the strategies to promote collaboration between the State and enterprises is the development of joint State/enterprise skills training centres. The Penang Skills Development Centre (PSDC), the first such centre to be set up, is an interesting example of State/enterprise collaboration in the area of training. Centrally located in the Bayan Lepas Free Trade Zone, the Centre has become one of the foremost skills training institutions in Malaysia. It currently provides training in technical manufacturing and managerial skills and further education.
Penang, in the north-western tip of the Peninsula Malaysia, is a major centre for the electronics industry. A skilled labour shortage in the State began to be felt in the late 1980s. The Penang State Government responded by holding a series of meetings with the multinational enterprises operating in the Penang Free Trade Zone. A steering committee was set up composed of representatives from the Penang Development Corporation and industry to look into the establishment of a skills training centre to cater for training needs. The committee held its inaugural meeting in May 1989. By November 1989, the PSDC was officially registered with the Registrar of Societies and in 1990 it obtained approved training institution status.
The PSDC was established with the mission of facilitating the utilization of resources among manufacturing and service industries by providing training and educational programmes in support of operational requirements, as well as keeping abreast of technological progress. It operates by pooling the resources of the State, enterprises and academia with a view to:
In the short term, its objective is to establish a mechanism to coordinate and utilize the resources available from both industry and training institutions to meet the immediate training needs of its members, position the PSDC as the leading training institution in Penang, work closely with the Government to implement the programme of the Human Resources Development Fund and achieve financial self-sufficiency. Its principal priority is to meet the training needs of its members. However, its courses are also open to employees of non-member companies, as well as to interested individuals who meet the entry standards of the respective courses. A course fee is charged for all courses and registered member companies are entitled to a discount. The Centre does not have the social objective of providing free training to the unemployed.
In the longer term, the Centre attempts to provide pre-employment training for school-leavers, as well as to promote vocational and technical centres.
Membership of the PSDC is open to the Government and all other sectors of the economy. The Centre has three categories of membership:
Although the PSDC was initiated by the state government, through the Penang Development Centre, it has allowed industry, and particularly multinational enterprises, to spearhead the establishment and management of the PSDC. The Centre is managed as a business, with management expertise provided by its members. Its day-to-day activities are administered by an Executive Director, who is a full-time employee of the Management Council. Policy matters are decided by the Management Council, which is composed of 11 elected officers representing the founder members and one representative each from the state government, the Penang Development Corporation, the Standards and Industrial Research Institute of Malaysia (SIRIM), the Penang Regional Development Authority and the Ministry of Public Enterprise. However, there is no participation by NGOs, the local community or trade unions. The officers are elected annually. The members of the Council are usually chief executive officers or very senior personnel of member companies. The Council meets regularly to discuss the management of the Centre, approve the courses and seminars, approve expenditure and assist in the financing of courses and seminars, settle disputes and approve the membership of the Council.
The Council is assisted by a training committee and two subcommittees, namely the Skills Enhancement Subcommittee and the Career Advancement Subcommittee. All companies that are members of the PSDC send a qualified representative, usually the training or personnel manager, to the meetings of the subcommittees, which form the first line of communication between the Centre and industry. They assess the training needs of members, plan and design courses, and draw up a training calendar for the approval of the Council. They also monitor, evaluate and obtain feedback on the effectiveness of courses.
Courses cover both the so-called hard skills (manufacturing/process, quality/productivity, computer and automation) and soft skills (supervisory/management and personnel business). The courses are of varying duration and are conducted on either a part-time or a full-time basis. Some courses are strictly designed for certain categories of workers, while others are open to those with minimum academic or technical qualifications. Trainees are often admitted who do not possess the minimum qualifications, but who have the relevant experience.
The courses are conducted externally by technical experts, who are either recruited or seconded by member companies or suppliers of technical equipment to the Centre. With the exception of professional courses, for which the standards are set by professional bodies, the PSDC is not formally involved in standard setting. However, the fact that it is in close and constant touch with the needs of industry ensures the success of its programmes. Nevertheless, consideration is being given to the adoption of the standards set by the National Vocational Training Council.
The PSDC has often been used as an example of State/enterprise collaboration. It started off with and still enjoys the commitment of the State, enterprises and academia.
The State provides support through cash grants, training materials, equipment and trainers. It also provides the PSDC with its premises, which are rented from the Penang Development Corporation at the token annual amount of RM10, compared with the market rental value of RM12,000. Since its inception, public contributions have reached a total of some RM4.77 million in the form of Federal State grants, subsidized rental, the secondment of Penang Development Corporation officers and the renovation of premises.
Private sector support is obtained from both member and non-member companies. To date, donations and the loan of equipment, furniture, training materials and trainers by members, equipment suppliers and private training institutions have reached a total value of some RM8.3 million.
This material support from the State and enterprises has been instrumental in permitting the PSDC to provide courses at very competitive rates. In addition, its close contacts with industry have allowed the PSDC to respond quickly to the training needs of enterprises. Feedback on the training needs of members is channelled directly through the Training Subcommittee. Training and courses are tailored to these needs. Unlike public training institutions, the PSDC professes no social objectives. Its priority is to its members and courses are organized as and when its members express a need for them. Their failure rate is therefore minimal. The PSDC also enjoys greater flexibility in recruiting the best trainers, generally from industry, than public training institutions, where the wages are controlled by the Treasury. Monitoring the effectiveness of individual programmes is facilitated by the fact that many of the trainees are employees of its member companies. This feedback is crucial in helping the Centre continuously improve and upgrade its programmes.
Between 1989 and 1994, the PSDC organized 802 courses for 12,705 trainees. It also collaborated with other training institutions, equipment suppliers and industry associations to organize courses for the manufacturing sector. Although a detailed breakdown of the courses held during the period is not available, by way of indication, the PSDC conducted 45 short courses in hard skills and 19 courses in soft skills during 1995. The duration of its courses ranged from one to 19 days. It also conducted 16 certificate, diploma and degree courses of between six months' and two years' duration. The above did not include the courses that the PSDC conducted from time to time that were customized to the needs of its clients.
Number of PSDC courses and trainees
| Year | No. of courses | No. of participants |
| 1989 | 16 | 307 |
| 1990 | 61 | 714 |
| 1991 | 104 | 1 572 |
| 1992 | 237 | 3 771 |
| 1993 | 164 | 2 662 |
| 1994 | 220 | 3 679 |
| Source: Penang Skills Development Centre. | ||
To cope with the training demand, the PSDC has expanded its infrastructure by setting up seven laboratories (computer, programmable automation literacy, industrial automation technology, electronics, microprocessor/PC, surface mount technology and vacuum technology) and two workshops (precision machining training and basic machining/mechatronics) to provide hands-on training. It has also set up a 20,000 sq. ft. team building park to conduct experimental learning in team building and empowerment. This programme is intended for work group leaders, such as supervisors, officers and managers, who are required to work in teams. The 16-hour programme is composed of 80 per cent outdoor and 20 per cent indoor training designed to:
The number of member companies has doubled since the PSDC was founded. It started with 24 members in 1989. In 1992, the PSDC's members accounted for some 6.6 per cent of the factories operating in the Penang Free Trade Zone and Industrial Estates, employing over 45 per cent of their total workforce. By 1995 it had 58 members. Of these, eight were involved in semi-conductor manufacturing, 16 in consumer electronics, ten in engineering and the rest in medical products, textiles, plastics, telecommunications, transport, agrochemicals, IT, consultancy and state development corporations.
The PSDC is now financially self-sufficient. The administrative costs of the Centre are covered by its income from training fees. It is recognized by the State as a means of satisfying industry's human resources development needs and its success has led to it being used as a model in many other states in the country.
The objective of the PSDC for the future is to assist in establishing Penang and the northern region of the Malaysian Peninsula as the centre of manufacturing excellence in Asia and the Pacific. In order to achieve that objective, it will continue to seek the support of enterprises and the State, not only to provide training courses of a high quality at very competitive prices, but also to respond quickly to the needs of industry by providing the right courses at the right time. It is seeking to become a fully fledged training institution capable of training technicians to diploma and certificate levels. Above all, it is endeavouring to use its unique position to provide a link between public sector training institutions and industry by developing programmes leading up to an Open University concept.
Industrial training in Malaysia has become more broad-based in terms of training provision and financing, including:
Although the formal structure of partnerships varies, enterprise representatives have been co-opted into the planning and decision-making machinery.
However, there is still a gap between the public and private sectors in their perceived roles and responsibilities in skills training. This affects the impact of the schemes. The system can be effective only if there is constant feedback and input by enterprises into the planning machinery. As noted earlier, this input is sometimes not forthcoming. Apart from a few joint State/enterprise bodies, the existing structure for collaboration in planning is neither permanent nor formal. Feedback is usually obtained through government surveys and dialogue with the representatives of industry associations. Such dialogue is often only held when there is a perceived need for it. The absence of a mechanism for constant feedback is an obstacle to systematic follow-up and planning. Responses to government surveys are often poor.
Even where the structure is more formal, government officials have noted that the contribution of enterprises varies greatly, depending on the individual representative. Irregular attendance at meetings by enterprise representatives and a lack of continuity are quite common problems. This lack of commitment and interest by enterprises is also reflected in the poor response to government schemes to optimize training resources through the sharing of facilities between the two sectors.
The lack of incentives and publicity for the schemes is partly to blame for the poor response from enterprises. However, the problem can also be traced to the general attitude of enterprises. The traditional management culture in the country does not give priority to training. Nor does it favour working with the Government. On the contrary, it has been the practice of the Chinese community (which incidentally dominates the business sector in Malaysia) to avoid interference in governmental matters. This hands-off attitude is a relic of colonial times, but probably became even more entrenched during the New Economic Policy era. A new management culture is required as a first step in promoting a greater role by enterprises as partners in training.
Another area of concern is the quality of industrial training. The National Vocational Training Council (NVTC) is the authority in charge of standard-setting and certification for vocational and technical skills. But there is currently no legal requirement for training institutions to register with the NVTC or to adopt its standards. The bodies that grant licences or the status of "approved training institutions" do not often require the training institution concerned to meet specific standards. Nor do they monitor the institutions closely. It is not therefore surprising that the quality of industrial training programmes varies greatly. However, a Skills Development Act has been proposed which would give the NVTC greater power to provide guidance and directions to training institutions, especially in the areas of standards and accreditation.
Finally, there is the question of the effectiveness of the schemes in attaining their objectives of enhancing industrial training and retraining. A 1988 Malaysian Labour Market Flexibility Survey indicated that formal structured training to upgrade workers' skills was generally confined to large, and often multinational manufacturing enterprises. Smaller firms were less likely than larger firms to retrain and upgrade the skills of employees. When they did so, smaller firms provided training to a smaller fraction of their workforce. Training was also positively correlated with the export orientation of enterprises.
Malaysia is on the verge of becoming an industrialized country. The promotion of industrial depth requires the massive training and retraining of its workforce. The role of enterprises in training is essential to ensure that the training system is responsive to the rapidly changing needs of industry. The Malaysian Government has created a very favourable policy environment to promote the involvement of enterprises in training. However, existing policies can be made more effective if some of the administrative and other problems are addressed. The following recommendations are designed for that purpose:
1. All government and semi-government-assisted training institutions may apply for ATI status. Private training institutions are considered only if they are the representative of the industry concerned, are not primarily profit motivated, and conduct courses for the purpose of overcoming shortages of requisite skilled labour. There are currently over a dozen approved training institutions, including the National Productivity Corporation, the Standards Industrial Research Institute of Malaysia, the Mara Institute of Technology, the Forest Research Institute of Malaysia, the Malaysian Agriculture Research and Development Institute, the Centre for Instructors and Advanced Skills Technology, The Penang Skills Development Centre, the Mara Skills Institute, the Industrial Training Institute, the German-Malaysian Institute, the Malaysian Timber Industry Board, the Federation of Malaysian Manufacturers-Entrepreneur Skills Development Centre, the Perak Entrepreneurs Vocational Centre and Tuas Polytechnic.
2. For the past few years, Malaysia's unemployment rate has been below 3 per cent. The country currently employs about 1.17 million foreign nationals (15 per cent of the total workforce).
3. The institutes run by Telekom Malaysia Bhd and Tenaga Nasional Berhad have recently been approved to university status.
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