Do We Need HRDF?

The Human Resources Development Fund (HRDF) is working hard to exorcise its dark past. Fortunately, no priests are involved.

Previously, the Fund was operated like a private company by some of its top personnel. Huge bonuses, increments were given to favoured employees. Kickbacks? Well that is in the realm of speculation.

HRDF collects a 1% levy from employers’ monthly payroll. This is, in addition to EPF, Socso and DBKL licencing permits/ requirements. Employers of smaller businesses are burdened even though there is a pandemic and businesses are struggling for revenue. Then there are organisations with own training centres like banks and they too contribute. What about SC licensed advisers? They contribute, although they must pay for SC-linked courses.

The Fund used to have over RM1.0 billion for human capital development. It subsidises various courses up to RM5,000. So, it is broad based not depth-based nor industry focused.

Recently, it has come up with a plan to expand coverage, effective from 1 March 2021. The 11^th Malaysia Plan has identified high quality human capital to propel the country’s future. This expansion will increase number of employees eligible for training from 2.5 million to 6.1 million from March 2021. The Fund was originally focused on entities with 10 workers or more. Now it is examining those with 5 or more workers. Eventually, it may have all, including the micro ones – below 5 workers. What’s the purpose? To upskill? There is a whole eco system of training and trainers who “live” on this Fund. The key is to get on its panel of trainers!

Could HRDF stick to its original goal of upskilling employees in companies with 10 or more workers. Why? To reduce burden of cash outflow of SMEs. It also must define a select group of industries to upskill. It should exempt those with in-house training centres or those linked to a regulators’ scheme of training like banks or capital market players. And it should operate in a transparent manner so that companies/ taxpayers’ money is not misused or mismanaged in the future.

 

Reference:

1.     Ti-M Views With Great Concern The Exposure Of An Alleged Scandal Involving The Human Resource Development Fund, https://transparency.org.my/

2.     Evidence of alleged misuse of, 13 June 2018, The Edge

3.     Lydia Nathan, HRDF moves past scandals to focus on original role, 4 July 2019, The Malaysian Reserve