Intensifying Human Capital Development Building Skilled Workforce To
Intensifying Human Capital Development: Building Skilled Workforce To Meet The Needs of a High-Income Nation Tan Mei Ling Associate Director, Human Capital Development SRI
q Overview of the New Economic Model and Economic Transformation Programme q Growing the economy, skills and jobs q Intensifying Human Capital Development
PM introduced the National towards Vision 2020 Transformation Policy Economic Transformation Programme Vision 2020 GTP 1. 0 : 2010 – 2011 Government Transformation Programme 1 Malaysia (People First, Performance Now) 10 th & 11 th Malaysia Plan 3
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Overview Of ETP Gross National Income (GNI) Transformational FOCUS Actions ‘Drivers’ • 12 NKEAS • 131 EPPs • 60 BOs COMPETITIVENESS ‘Enablers’ • 51 Policy Measures • 6 SRIs & Natural Homes • USD 15, 000 (RM 48, 000) per Capita GNI • USD 523 Billion (RM 1. 7 Trillion) GNI • 6% GDP Growth per Annum Jobs Investment • 3. 3 Million Additional Jobs • USD 444 Billion (RM 1. 4 Trillion) Investment • 92% Private, 8% Public Investment • 73% Domestic, 27% Foreign Direct Investment 5
To become a High-Income Nation, We Need: COMPETITIVENESS We Need “Enablers” To Ensure Competitiveness SRIs Strategic Reform Initiatives & FOCUS We need “Drivers” to ensure focus on high -impact areas NKRAs + NKEAs National Key Result Areas National Key Economic Areas
To become a High-Income Nation, We Need: COMPETITIVENESS We Need “Enablers” To Ensure Competitiveness & FOCUS We need “Drivers” to ensure focus on high -impact areas SRI NKEAs + NKRAs Strategic Reform Initiatives National Key Economic Areas National Key Result Areas
In 2010, ETP was introduced with 12 National Key Economic Areas (NKEAs) as focused sectoral approach to Economic Growth Oil, Gas & Financial Education Energy Services Greater Tourism KL/Klang Valley 11 Economic Sectors + Greater Kuala Lumpur Business Services Agriculture Comms Content & Palm Oil Infra Wholesale & Retail Electrical & Electronics Healthcare
1 Strategic Direction 2 Labs 3 An Engagement and Establish in detail what transformational needs to be done approach Share lab output with rakyat Multiple Cabinet retreats to ascertain the direction needed Open Day and seek their feedback 4 GTP /ETP Roadmap 5 Tell the rakyat what we are going to do KPI targets Setting KPIs for the whole Cabinet 6 Imple- mentation Problem solving, on the ground implementation 7 IPR/ External validation on results achieved Audit 8 Annual Report Tell the rakyat what we have delivered 9
To become a High-Income Nation, We Need: COMPETITIVENESS & FOCUS We Need “Enablers” To Ensure Competitiveness We need “Drivers” to ensure focus on high -impact areas SRIs NKRAs + NKEAs Strategic Reform Initiatives National Key Result Areas National Key Economic Areas
The Strategic Reform Initiatives (SRIs) are the enablers for us to be COMPETITIVE, which are based on the New Economic Model 1 Int’l Standards & Liberalisation 2 9 policies 4 Public Service Delivery 5 policies Government‘s Role in Business 5 policies Public Finance 3 5 7 policies 6 Human Capital Development Narrowing Disparities / Bumi SMEs 9 policies 2 policies For Malaysia to be highly competitive… “the country must produce a labor force and enterprises that are nimble, innovative and constantly adjusting to the fast changing environment” 11
SRI Human Capital Development NKRA & NKEA Education Early Child Care & Pre -School Secondary School Primary School TVET Institutions, College & University WORKPLACE TRANSFORMATION 1 Modernise Labour Laws 2 Labour Safety Net 3 SRI Human Capital Workforce (Low to Highly Skilled) WORKFORCE TRANSFORMATION Strengthen HR Mgmt 4 5 Labour 6 Upskilling & Leverage Reskilling Women’s Talent Market Analysis OBJECTIVES • Attract investor whilst protect workers’ rights • Consolidate & streamline labor laws • Protect workers during economic transition • Upskill HR capabilities to enhance business performance in SMEs • Provide • Upskill to • Increase comprehensive address skills participation in labour market and manpower labour market: data and analysis of NKEA • Attract sectors • Retain • Key tool for • Increase women national manpower in decision planning making positions to 30%
q Overview of the New Economic Model and Economic Transformation Programme q Growing the economy, skills and jobs q Intensifying Human Capital Development
Structural shift of to manufacturing and services based economy in the last four decades From agrarian/natural resources-based to manufacturing & services-based economy
The 12 National Key Economic Areas (NKEAs) will focus on attracting and growing higher value output of goods and services Oil, Gas & Financial Education Energy Services Greater Tourism KL/Klang Valley 11 Economic Sectors + Greater Kuala Lumpur Business Services Agriculture Comms Content & Palm Oil Infra Wholesale & Retail Electrical & Electronics Healthcare
To become a high income nation by 2020, Malaysia needs to nurture the skills and competitiveness of the critical mass of the workforce By 2020 50% Competent and skilled workforce Current ~25. 3%* Competent and skilled workforce • *SOURCE: based on Labour Force Survey, Dept of Statistic 2012 Shift towards higher value manufacturing and services-based economy: • Higher skills with strong English, IT and technical proficiency • Higher productivity
q Overview of the New Economic Model and Economic Transformation Programme q Growing the economy, skills and jobs q Intensifying Human Capital Development
Current State of Malaysia’s Labour Force Participation Rate (%) 2010 – 63. 7 2011 – 64. 4 Working Age Population (‘ 000) 2010 – 19, 326. 9 2011 – 19, 684. 6 Labour Force (‘ 000) 2010 – 12, 303. 9 2011 – 12, 675. 8 Employed (‘ 000) 2010 – 11, 899. 5 2011 – 12, 284. 4 Outside Labour Force (‘ 000) 2010 – 7, 023. 0 2011 – 7, 008. 8 Unemployed (‘ 000) 2010 – 404. 4 2011 – 391. 4 • *SOURCE: based on Labour Force Survey, Dept of Statistic 2010 and 2011 Unemployment Rate (%) 2010 – 3. 3 2011 – 3. 1
In the last 20 years, the core Malaysian labor force has become more formally educated… Education Distribution of Malaysian Workers (25 -35 year old) 120% In 1990, around 55% at most primary educated. 100% 80% In 2011, almost 60% 75% had completed at least upper secondary education. 40% 20% Not applicable UPSR/no certificate PMR/SRP SPM/SPMV STPM Diploma/Certificate Degree Source: DOS – LFS 1990 -2011 2010 2009 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1993 1992 1990 0%
Since 2001, job creation biased toward high- and mid-skilled occupations… Net job creation between 2001 and 2011 by skill level (in thousands) Number of jobs in 2011 by skill level (in thousands) 5, 000 1, 600 4, 500 1, 400 3, 500 1, 000 3, 000 800 2, 500 600 2, 000 1, 500 400 1, 000 200 500 0 -200 …however largest share of workforce are still concentrated in low- and mid-skilled occupations. 4, 000 1, 200 High Skill Medium Skill Low Skill -400 Source: DOS – LFS 2001 -2011, World Bank analysis in 2013 Report ‘Developing Skills for Innovation and High Income Economy in Malaysia’
However, utilization of new economy skills has not increased over time. . . 3. 20 Routine cognitive 3. 10 3. 00 2. 90 New Economy Skills 2. 80 2. 70 Manual Skills 2. 60 2. 50 2. 40 2001 2002 2003 2004 2005 2006 2007 2009 2010 Source: DOS – LFS 2001 -2011, World Bank analysis in 2013 Report ‘Developing Skills for Innovation and High Income Economy in Malaysia’
And, utilization of non-routine cognitive skills amongst older Malaysians has not increased over time, but has increased for younger ones … OLDER COHORT YOUNGER COHORT 80 *Malaysians 36 and above in 2001 and 45 and above in 2010 Mean Skill Percentile of 2001 Skills Distribution 70 60 50 40 30 *Malaysians 27 and below in 2001 and 36 and above in 2010 Non-routine cognitive: Analytical 70 Non-routine cognitive: Interpersonal 60 Routine cognitive 50 40 Routine manual 30 Non-routine manual physical 2010 2009 2007 2006 2005 2004 2003 2002 2001 20 20 2001 Mean Skill Percentile of 2001 Skills Distribution 80 Source: DOS – LFS 2001 -2011, World Bank analysis in 2013 Report ‘Developing Skills for Innovation and High Income Economy in Malaysia’
Key Questions 1 Do we have people with the right skills to meet future requirements? Despite increasing levels of post-secondary levels of education in the workforce, employers find that inadequate skills persist. 2 Do we have enough people to fill projected workforce requirements? At current state, insufficient quantity of Local Labor Supply to fill Workforce Requirements. Employment of Malaysian citizens is projected to increase from around 10. 4 million (in 2010) to 12. 7 million in 2020*, assuming a 5% GDP growth per year. *Including foreign labor (so the entire workforce), the total labor demand is expected to increase from 11. 9 million (in 2010) to 15. 3 million.
SRI Human Capital Development Framework Holistic approach to intensify development Years at work OBJECTIVE Education & Skills training • Professional & Skilled • Semi Skilled • Low skilled Institutional support / enablers Education: Academic & TVET Fresh Grads Develop Quality Graduates Secure right job Education • English, Maths & Science Higher Education • TVET • Internship & Apprenticeship • Bridging / Train & Place programmes Junior – Middle Management Develop solid, Industry and soft Skills • Upskilling /re-skilling • NKEA Industry-Skills clusters • Corridors & Cities • Attract & retain Women in the Workforce Senior Management Develop senior leaders • 30% women in decision-making positions Incentives and Double Tax deduction Education Policies and Labour Laws Data and system: Labour Market Information (Talent Supply & Demand) Industry Engagement and Public-Private Collaboration/Partnership 24
1 Up skilling & Re-skilling What are we doing? Our Focus … (Mo. HR, MOE, various Ministries) • Address NKEAs and Corridors & Cities requirements • Develop policies, strategies, and structure programmes, consistent with international curriculum and standards • Promote industry collaboration with education, vocational and tertiary entities Low to high skilled workforce Potential School TVET and Tertiary Continuing Education Build competencies & skills via collaboration with industry, education institutions & government Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained 25
Example of an Upskilling Incentive Programme How does it work Professional Certification Providers Reduced pricing Employee/ Employer My. Pro. Cert Incentive � Matching incentive upon first passing Up to 50% DISCOUNT � Affordable � Highly discounted Employer: HRDF Claimable* Employee: Self Funding/ Skills Loan (PTPK)* * Terms & Conditions apply Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained
Integrated TEVT Career Portal, iwant 2 b, launched on 21 st Mar 2013 to attract SPM-leavers to pursue TEVT URL: www. iwant 2 b. my Launched on the same day when SPM result was announced Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained
Integrated TEVT Career Portal SPM Result What I WANT to be? Electrician Chef Hairstylist Welder Housekeeper Machinist Interactive portal for TEVT career guidance • Personal profile • Psychometric Test • Recommendations (based on interest & qualifications) • Accredited Institutions (public & private) • Accredited Courses • Career Pathway • Jobs Description • Salary Range • Available Skills Funding • Success Story Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained 28
Vocational Transformation Plan launched in 2011 to promote vocational training Buying seats in private TEVT institutions § For highly specialised programmes Collaboration with industry-led bodies and industry-partners § Strengthen curriculum and delivery of TEVT programmes Basic Vocational Education programme § expanded vocational education to begin in lower secondary Vocational College programme § strengthened the existing pathway in upper secondary Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained
NKEA EPP 5: Scaling Up Private Skills Training EPP 5 5 -YEAR Target and Achievement (‘ 000 as at 30 April 2013) The aim of this EPP is to reduce the percentage of low-skilled and semiskilled workers from 76% in 2009 to 50% in 2020. 45. 0 40. 0 35. 0 30. 0 25. 0 20. 0 15. 0 10. 0 5. 0 - 33. 7 22. 1 26. 9 28. 9 36. 5 31. 7 41. 3 9. 0 2011 2012 2013 Annual Target 2014 2015 Achievement Can be achieved through demand- side revolving loan ……. 2011 RM 232 mil Total RM 2012 RM 200 mil 2013 RM 200 mil 632 mil allocated in 3 years, With focus on quality (starrating), branding and skills training promotion under: & benefits more than 45, 000 students Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained
2 Increasing the Labour Force Participation What are we doing? • Increase Minimum Retirement Age to 60 is enforced from 1 July, 2013 (Mo. HR) • Promote women participation in the labour market from current 47% to 55% (Mo. WFCD, various other Ministries) • Increase women in decision making positions to 30% by 2016 (Mo. WFCD) • Promote to our local talent who are located overseas to return to Malaysia (Talent. Corp) • Facilitate contribution of skilled, foreign talent in critical jobs in key sectors (Talent. Corp) 31 Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained
Childcare Support to Retain Women at Work • Target childcare enrolment (0 -4 years) to increase from current 4% to 25% GPT 2. 0 by 2020 under NKRA/NKEA Grant 2013 Budget Launching grants and fee assistance under GTP 2. 0 for private childcare (0 -4 years old), (RM 18 million) Tax exemption for 5 years and 10% industry allowance for private childcare centre Double tax deduction for employers who provide subsidies to employees on childcare Source: JKM, Min Women, Family & Community Development Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained 32
Establish Benefits & Remuneration Package that Attract Women Double Tax Deduction Incentive on training expenditure for Companies that re-employ women after a career break Encourage Listed Companies 29 th May 2012 PM’s Announcement Invest Malaysia 2012 Source: Talent. Corp Picture Source: The Star to disclose in their annual reports their policies and practices to support women in employment - Flexible Work Arrangements & Support Facilities Copyright – Reproduction of this information contained therein are not allowed unless expressed consent is obtained 33
In Summary: An Integrated and Holistic approach to intensify human capital development Years at work OBJECTIVE Education & Skills training • Professional & Skilled • Semi Skilled • Low skilled Institutional support / enablers Education: Academic & TVET Fresh Grads Develop Quality Graduates Secure right job Education • English, Maths & Science Higher Education • TVET • Internship & Apprenticeship • Bridging / Train & Place programmes Junior – Middle Management Develop solid, Industry and soft Skills • Upskilling /re-skilling • NKEA Industry-Skills clusters • Corridors & Cities • Attract & retain Women in the Workforce Senior Management Develop senior leaders • 30% women in decision-making positions Incentives and Double Tax deduction Education Policies and Labour Laws Data and system: Labour Market Information (Talent Supply & Demand) Industry Engagement and Public-Private Collaboration/Partnership 34
We are preparing for the road ahead, for those why may face transition challenges … 35
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Workforce projections until 2020 • As projected, employment of Malaysian citizens is expected to increase from around 10. 4 million (in 2010) to 12. 7 million in 2020, assuming a 5% GDP growth per year. • Including foreign labor (so the entire workforce), the total labor demand is expected to increase from 11. 9 million (in 2010) to 15. 3 million. • The workforce with a university degree and vocational diploma is expected to continue increasing so that the share of tertiary educated workforce is expected to rise by 5 percentage points by 2020. • Among the tertiary educated: • • "Social Science, business and law", “Science, Math, IT" and "Agriculture" (in the case of university degree holders) are relatively well absorbed by the market, facing sharper unemployment decreases and larger wage increases. Relative declines in the absorption of graduates in Education, Services, and Health fields. Source: DOS – LFS 2001 -2011, World Bank analysis in 2013 Report ‘Developing Skills for Innovation and High Income Economy in Malaysia’
Malaysia’s labor force participation is lower than other upper-middle income countries and other countries in East Asia LFP rates in the East Asia Region, 2011 77. 2% 74. 0% 77. 7% 78. 3% 69. 3% World East Asia & Pacific (developing only) East Asia & Pacific (all income levels) Upper middle income Low income High income 60. 5% Source: World Development Indicators and Malaysian LFS 2010. 62. 8% Malaysia (including foreign workers) 72. 0%
SRI Human Capital Development NKRA & NKEA Education Early Child Care & Pre -School TVET Institutions, College & University Secondary School Primary School WORKPLACE TRANSFORMATION 1 Modernise Labour Laws 2 Labour Safety Net 3 SRI Human Capital Workforce (Low to Highly Skilled) WORKFORCE TRANSFORMATION Strengthen HR Mgmt 4 Leverage Women’s Talent 5 Labour Market Analysis 6 Up skilling & Reskilling OBJECTIVES • Attract investor whilst protect workers’ rights • Protect workers during economic transition • Consolidate & streamline labor laws • Upskill HR capabilities to enhance business performance in SMEs • Increase participation in labour market: • Attract • Retain • Increase women in decision making positions to 30% • Provide comprehensive labour market data and analysis • Upskill to address skills and manpower of each NKEA sectors • Key tool for national manpower planning INITIATIVES Amendments to: • Employment Act 1955 • Industrial Relations Act 1967 • Minimum Retirement Age • Minimum Wage • Unemployment Insurance • Establish National Human Resource Center (NHRC) to increase HR capabilities of SMEs • Develop potential pool of women for board level • Promote childcare incentives, flexiwork • Institute for Labour Market Analysis (ILMIA) • Develop supply and demand labour market data • My. Pro. Cert • National Talent Enhancement Programme • My. Uni. Alliance • TVET Curriculum and Trainers Programme
81% of jobs are skilled, 20% semi-skilled, 19% are low skilled 2020 Additional Labour Requirements by Education Level Million 3. 3 million additional jobs 39% 61% # Jobs 1, 200, 000 997, 013 1, 000 800, 000 632, 976 647, 088 679, 977 600, 000 400, 000 270, 635 200, 000 23, 305 0 Percentage of total additional jobs Low skilled/ fresh Unskilled from school 19 SOURCE: Post Labs Qualifications Reports Vocational / Certificate 20 Diploma 21 Degree 31 Masters / Professional 8 Ph. D 1 41 41
NKEA Jobs Creation based on Skill levels (by 2020) Low Skilled Semi Skilled 100% 17% 90% 29% 43% 57% 70% 50% 85% 57% 53% 15% 81% 45% 60% 35% 40% 68% 30% 31% 39% 43% 20% 10% 22% 35% 80% 60% 14% 0% 0% Agriculture 33% 30% 26% Biz Svcs 19% 0% CCI 16% 12% 9% Healthcare OGE 26% 0% E&E Education GKL PO Tourism W&R
Competencies Required for Skilled Jobs O&G and RE • • • Petroleum Engineer Mechanical engineer Chemical engineer Geologist Welding (6 G) Technician Forklift and crane operators Renewable energy Solar/ Biomass/ Biogas Small Hydro Power Plant • Specialist Doctors • Nurses • Pharmacists • Clinical Researchers • Med Tech HEALTHCARE Agriculture Science Plantation Management Soil Science Nutritionist Food Science and Technologist • Instrumentation • R&D • • • Eco-Nature Guide • Customer Service • Housekeeping • F&B • Crafting • Luxury Retail • Chef TOURISM PALM OIL • • • AGRICULTURE • Dental Technologist • • Agriculture Science Aquaculture Agribusiness Soil Science Nutritionist Food Science and Technologist Agronomist Landscaping Nursery Forestry E&E and Manufacturing • • Mechanical Electrical Materials Chemical Supply Chain Management Accountancy Process Quality Assurance
Competencies Required for Skilled Jobs SKILLS Greater KL • Boring Technology • Civil engineer • Mechanical engineer • Architecture • Welding • Structural engineer • Safety engineer • Construction engineer • Accounting SKILLS • Early Child Care • Experienced lecturers for skills training, engineering, science EDUCATION SKILLS CCI • Software Engineering • Database • Networking & Security • OS & Server Tech • BI & Analytics • Multimedia Biz Services SKILLS WHOLESALE & RETAIL SKILLS • Logistics • Supply Chain • Retail Management • Customer Service • Wholesale Management • Green Technology • Global Supply Chain, IT Management, Finance, HR, Insurance • Enterprise Resource Planning • Data Center Professional • Aerospace Engineering • Manufacturing CAD/ CAM • Maritime
LABOUR MARKET DATA Strengthen Labour Market Analysis Develop Labour Market Information System Phase 1, 2013 Phase 1 Labor Market Data § Work with World Bank, EPU, Talent. Corp 2014 ILMIA Portal and Dashboard Phase 2 Integrated Labour Data warehouse § Launch Dec ’ 13, with Phase 1 indicators § Go-Live with full labour indicators § Develop existing ILMIA staff § Labour dashboard will be a shared portal for analysis for all Ministries § Recruit / transfer staff into ILMIA
Low Labour Force Participation Results are due to Low Female Participation Rates Malaysians aged 15 -64 95% 85% 75% 65% 55% Female: 48. 9% 45% LFP rate, Total Source: Malaysian Labor Force Survey, Various years LFP rate, Male LFP rate, Female 11 20 10 20 09 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20 99 19 98 19 97 19 96 19 95 19 93 19 92 19 19 90 35%
High Attrition Rate for Women Starting at age 30 onwards • 2012: 48% vs. Target 2015: 55 % Lowest in ASEAN : brain drain Malaysia • Single peak profile • >50% of entry level but 5% CEOs Korea Japan Single Peak Source: Malaysian Economic Monitor, World Bank Nov 2012 Double Peak 47 Double Peak
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