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A primer on the Malaysian skills development system.
By Edwin Goh11 May 2022
Skills development is central in adapting to changing labour demand amidst broad economic and social changes. The Malaysian government has given skills development ample emphasis going all the way back from the First Malaysia Plan. In the last three years, the government has poured an average of RM19 billion on various reskilling schemes every year, an amount equivalent to 5-6% of the annual budget (Figure 1).
To promote reskilling, this primer aims to tell you the nuts and bolts of the skills development system in Malaysia. For those contemplating to reskill themselves, this primer is also intended to act as a handy FAQ to guide you through the reskilling maze.
The UNESCO International Centre for Technical and Vocational Education and Training (UNESCO-UNEVOC) defines the term ‘skills development’ as “the development of skills or competencies which are relevant to the workforce”. According to the Industrial Skills Framework by the Human Resources Development Corporation (HRD Corp), there are three types of skills: knowledge, skills and competence.
Definitions for Different Types of Skills
Knowledge: Understanding of theories and principles in a field of work
Skills: Cognitive, practical and soft skills required to accomplish tasks and solve problems in a domain area
Competence: Ability to operate within unknown contexts, supervise professional development of individuals and groups, and manage complex technical or professional assignments
Source: HRD Corp
Conventionally, skills development in Malaysia refers to technical and vocational education and training (TVET). In recent years, policymakers and the media have adopted a more expansive definition of skills development to include ‘reskilling’ and ‘upskilling’, reflecting rapid changes in the labour market and the need to take up skills development throughout one’s career.
Definition of ‘Upskilling’ and ‘Reskilling’
Upskilling refers to learning new skills to meet the changing job demands for a current role or career advancement;
Reskilling refers to learning new sets of skills for transiting to a completely new job or new industry.
Source: World Economic Forum
Malaysia’s skills development system was first established in 1964. Over the decades, the government has progressively added various training institutions, course programmes and subsidy schemes to support the reskilling of different target groups. Today, whether you are a secondary school leaver or a working adult, there are several ways to seek reskilling without necessarily undertaking the traditional academic pathway (Figure 2).
The pathways that we explain below are those that are accredited by the Malaysian government. But first, we would like to note that for non-accredited courses, there are massive online open courses offered by platforms such as Coursera, Data Camp and Udemy. Because these courses and platforms do not have formal accreditation from regulatory agencies in Malaysia, it is up to individual employers to decide whether to recognise them as proof of qualification or competency.
Depending on your learning preference, you can either sign up for programmes accredited by the Department of Skills Development (DSD) under the Human Resources Ministry or the Malaysian Qualifications Agency (MQA) under the Higher Education Ministry. DSD-certified programmes have a stronger emphasis on practical industrial training whereas MQA-accredited courses focus more on classroom-based learning. Since both agencies now follow the same accreditation standards set by the Code of Practice for TVET Programme Accreditation (COPTPA), you will have the option to continue pursuing tertiary education regardless of whether you graduate from DSD- or MQA-approved programmes.
Currently, there is a myriad of training institutions and programmes available to choose from. According to the 2018 TVET Report, there are 556 public training institutions and 692 private training institutions spread across 7 ministries and 17 agencies.
There are varying types of skills courses, including employability skills training, occupational standards certification programmes, PPP (Problem, Project, Production)-based learning and entrepreneurship programmes for different industries. Figure 3 below illustrates Malaysia’s skills development landscape.
In recent years, the government has also provided a wide variety of opportunities for Malaysian citizens to learn new skills remotely. Several ministries and agencies have established digital learning platforms to host online reskilling courses, including Upskill Malaysia, e-LATIH by HRD Corp and Digital Skills Training Directory by MDEC. Most recently in April 2022, the HRD Corp partnered with the Higher Education Ministry to launch a micro-credential initiative to offer industry-recognised courses.
There are several sources of financial support from which you can apply to fund your reskilling programmes. Depending on the type of programme, you can apply for a low-interest loan either from the Skills Development Fund Corporation (PTPK) or the National Higher Education Fund Corporation (PTPTN) (Figure 4). However, these reskilling loans are only applicable to the accredited programmes offered by public and private training institutions, excluding non-accredited skills courses.
If you do not want to borrow and incur debt, you can apply for partial withdrawal of your EPF retirement savings (if you or your parents have one) to pay for reskilling courses. Otherwise, the government also provides financial support for reskilling to worker segments via HRD Corp and the Employment Insurance System (EIS) under SOCSO.
If you are a formal employee, you could request your employers to apply for training subsidies and allowances from multiple HRD Corp programmes, provided that your employers are registered HRD Corp contributors. Meanwhile, there are also subsidised HRD Corp initiatives for various target groups, including B40 individuals, school leavers below 40 years old with or without school certificates, unemployed graduates and retrenched workers. If you are an unemployed EIS contributor, you can access EIS financial assistance that provides a training subsidy of up to RM4,000 and an allowance of RM10-20 a day to reskill and gain new income opportunities.
However, not everyone can access the funding options on offer. As pointed out in our 2020 survey on delivery riders, it is not straightforward for those in need of reskilling to apply for the available financial support.
As highlighted in the 12th Malaysia Plan, the government plans to prepare the Malaysian workforce for the future of work. In addition, Malaysia has committed to achieve the Fourth United Nations Sustainable Development Goal, which calls for substantially increasing the number of workers with relevant skills by 2030. To attain these goals, the government has set up a National TVET Council in 2021 for tackling systemic problems mentioned in the 2018 TVET Report, such as fragmented and uncoordinated programs, underutilisation of training facilities, and the mismatch between the skills supply and industrial demand.
The skills development landscape in Malaysia has grown exponentially in the past six decades. Skills development is no longer confined to a segment of school leavers and the less academically-inclined. Today, skills development matters to millions of workers who seek to change or advance their careers and secure their livelihoods. In order to adapt to the evolving labour market demands and technological trends, reskilling and upskilling are becoming essential for many Malaysian workers. If you are one of them, we hope this primer has helped to provide you with an overview of the reskilling landscape in Malaysia as a starting point to guide you in making further enquiries.
Have you tried to reskill or upskill yourself with any of the options mentioned above? How was your experience? We would love to hear from you. Email us at email@example.com.