Hrd Corp Must Look Beyond Levy Collection

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The Human Resource Development Corporation (HRD Corp) reportedly recorded its most successful year in history. While this achievement is commendable, it is crucial to look beyond these figures.
The true measure of HRD Corp’s success should not solely rely on financial achievements or levy collection records but also on how well it fulfills its core mission. This includes addressing key performance indicators (KPIs) aligned with its fundamental purpose: empowering Malaysia’s workforce to adapt, thrive, and succeed in an era of rapid technological change.
We also wish to remind readers of the ongoing issues plaguing HRD Corp, particularly concerning its governance and spending practices, which have raised serious concerns about its effectiveness in addressing Malaysia’s workforce challenges.
This includes the issue of HRD Corp’s top management salaries, reportedly exceeding RM1 million annually per individual, a matter recently disclosed in Parliament.
Such revelations have sparked doubts about HRD Corp’s financial management and its role in tackling critical workforce issues.
While the agency has achieved high levy collections, including RM2.2 billion in 2023, the focus must shift to how effectively these funds are being utilised to address critical workforce issues, particularly in retraining displaced workers and upskilling those at risk of job loss due to automation, robotics, and artificial intelligence (AI).
Findings last year by the Public Accounts Committee (PAC) and the auditor-general revealed alarming governance issues within HRD Corp. Reports indicate that a significant portion of levies collected from employers, intended for workforce development, have been diverted into risky investments, including equity markets and property purchases.
This misuse of funds not only deviates from HRD Corp’s primary mission but also raises serious concerns about its priorities and accountability.
Adding to this controversy, HRD Corp’s CEO, in his response to the PAC, revealed the organisation’s tendency to align its actions with the interests of certain elites-in-power, further casting doubt on its independence and integrity.
Such disclosures highlight a worrying gap between HRD Corp’s stated objectives and its actual practices, raising questions about its ability to address the urgent challenges posed by automation, AI, and other technological advancements reshaping Malaysia’s workforce.
Job displacement
One of HRD Corp’s critical responsibilities is to retrain displaced workers, particularly in industries affected by automation and AI. However, there is a lack of transparency regarding the amount of levies allocated for this purpose and the extent to which these efforts have successfully helped displaced workers secure new employment.
Malaysia faces significant challenges in this regard. Studies, such as those conducted by the Khazanah Research Institute (KRI), estimate that 54 percent of Malaysian workers are at high risk of job displacement due to automation, with semi-skilled and low-skilled workers being the most vulnerable.
Despite this, there is no clear data on the amount HRD Corp has spent on retraining these workers or the success rate of its programmes in helping them transition to new roles. This lack of accountability raises questions about whether the agency is genuinely addressing the needs of displaced workers.
Another issue is upskilling workers at risk of job loss due to automation, robotics, and AI. As industries increasingly adopt these technologies, the demand for low-skilled labor is declining, while the need for highly skilled workers is rising.
HRD Corp has a crucial role in preparing the workforce for this transition, yet there is limited information on the amount of levies allocated for upskilling initiatives.
The adoption of automation and AI is expected to impact approximately 7.8 million workers in Malaysia, with sectors such as manufacturing, transportation, and retail being the most affected. Without targeted upskilling programmes, these workers face the risk of unemployment and wage stagnation.
However, HRD Corp’s spending priorities appear misaligned with these urgent needs, as evidenced by the lack of comprehensive programmes to address skill gaps.
Shift in approach
To remain relevant and effective, HRD Corp must undergo a strategic shift in its approach to workforce development. This includes:
1. Transparency and accountability: HRD Corp must provide detailed reports on how levy funds are allocated and the outcomes of its training programmes. This will help rebuild trust among stakeholders and ensure funds are used effectively.
2. Focus on displaced workers: A significant portion of levies should be allocated to retraining programmes for workers displaced by automation and AI. These programmes should be designed to equip workers with the skills needed to transition to new roles in emerging industries.
3. Proactive upskilling initiatives: HRD Corp must prioritise upskilling programmes for workers at risk of job loss. This includes developing training modules in collaboration with industries to ensure workers acquire the necessary skills.
4. Addressing regional inequalities: Targeted interventions are needed to address the uneven impact of automation across Malaysia’s regions. States like Selangor and Sabah, which rely heavily on manufacturing and logistics, require tailored programmes to mitigate job losses.
5. Collaboration with multiple stakeholders: HRD Corp should work closely with employers, labor unions, think tanks, civil society, and educational institutions to develop comprehensive training programmes that meet the needs of workers and industries.
HRD Corp’s success should not be measured by the amount of levies collected or spent but by the tangible impact of its programmes on Malaysia’s workforce.
As the nation grapples with the challenges posed by automation, robotics, and AI, HRD Corp must refocus its efforts on retraining displaced workers and upskilling those at risk of job loss.
By addressing these issues proactively and transparently, HRD Corp can play a vital role in ensuring Malaysia’s workforce remains competitive and resilient in the face of technological change. - Mkini
SURESH BALASUBRAMANIAM is a central committee member of Parti Sosialis Malaysia (PSM).
The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.

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