Impact of HRDCorp's Microcredential Implementation towards Malaysia's Talent Development Agenda

Sitting in my previous HR role, I can understand the strategic objective of HRDC.

It is created very much with the intent to encourage employers to upskill their employee. After all, the 1% levy are the employer's money.

The 1% considered as sunk cost. Hence, employers might as well just utilize it for the benefit of their employee and employers will typically then use the 1% levy as their annual training budget.

BUT the recent circular from HRDC (Employers' Circular 2/2022 - as attached) raises questions on value creation for employers.

Excerpt, effective 15th Aug 2022:

1. All?programmes, except team building, shall be microcredential enabled.

2. HRDC will charge Employers, a microcredential fee of RM300 per trainee.

?? This means that an employer will now be upskilling less people in their organization for the same amount that they have been contributing into HRDC on an annual basis.

?? What do I mean by this?

Example,

An employer with annual contribution of RM144k used to be able to conduct 12 sessions of 2-day workshop (assume RM6k/day X 2 days = RM12k / session for 20 pax)

With this new circular, it means the employer will now be only able to conduct 8 session of the 2-day workshop. (RM6k/day X 2 days + RM6k for microcredential = RM18k / session)

This means, if previously an employer is able to upskill 240 pax, they are now only able to upskill 160 pax.

A 33% reduction in people being upskilled in an organization!

?? Let's take the annual contribution from all employers to HRDC to take a look at the impact to a broader nationwide perspective.

In 2019, the annual contribution is RM900 million.

Using the same formula as outlined above, this means that the said amount will be able to fund around 75,000 session per year.

?? With microcredential cost factored in, this goes down to 50,000 session per year.

?? Assuming each session is filled with 20 pax, this means that we will have LESS 500,000 employees being upskilled annually.

?? ?? ?? 500,000 employees NOT receiving upskill opportunity annually VS getting microcredential.

?? Will microcredential move our people capabilities to the next level to progress Malaysia to become more competitive?

The answer lies with the employer.

And as an ex-HR, I do remember us being more focused on actual skills acquisition rather than certificates (caveat ; certificates in some technical area are valuable, but NOT all areas)

It's about how employees are able to deliver actual value into business (rather than bringing certificates into the business).

? HR folks, what are your thoughts?

P.s. : I might be interpreting the circular wrongly. In this case, please do correct me.

P.s. 2 : How RM300/trainee paid to HRDC adds value to long-term and meaningful employee skill acquisition in a company will be an interesting topic. But I believe we will get more insight in the next few weeks.

Big thank you to?Siva Seenivasan FCMI?for bringing this up in his earlier post.

#hrdcorp?#training

Point-by-point review in twitter:

Impact of HRDCorp's Microcredential Implementation towards Malaysia's Talent Development Agenda?

Why HRDCorp's Microcredential Need to Be REVOLUTIONARY to make up for the reduction of employees trained.