What is the projected reduction in upskilling opportunities due to HRDC fees?

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Projected Reduction in Upskilling Opportunities Due to HRDC Fees

The introduction of a RM300 micro-credential fee per trainee per training by the Human Resource Development Corporation (HRDC) is projected to significantly reduce the number of employees who can be upskilled annually, despite employers contributing the same amount of levy. This new charge effectively curtails the reach of existing training budgets, impacting both individual companies and the broader national effort to enhance workforce capabilities.
Impact on Employer Training Capacity

For an employer contributing RM144,000 annually to HRDC, the previous capacity allowed for 12 training sessions. However, the implementation of the RM300 micro-credential fee means this same contribution can now only fund 8 training sessions. This translates to a direct reduction in the number of employees that can be upskilled, from a previous capacity of 240 individuals down to 160, representing a 33% decrease.
Nationwide Reduction in Upskilled Employees

On a larger scale, the implications are substantial. In 2019, employers collectively contributed RM900 million to HRDC, a sum that could fund approximately 75,000 training sessions annually. With the newly introduced micro-credential cost factored in, this same funding level would only support around 50,000 sessions. Assuming an average of 20 participants per session, this reduction in training capacity means an estimated 500,000 fewer employees could benefit from upskilling opportunities each year.
Concerns Over Policy Direction and Competitiveness

This policy shift raises questions about its alignment with HRDC's founding objective of encouraging employers to provide learning and development. The added cost is perceived by some employers as a move by the regulator towards becoming a profit centre, potentially prioritising revenue generation over stakeholder interests. The focus on micro-credentials, rather than proven skills acquisition, is also a point of contention, with concerns that it may not substantially enhance Malaysia's overall competitiveness or the practical capabilities of its workforce.

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What is the projected reduction in upskilling opportunities due to HRDC fees?

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