Let’s talk about the plan of Human Resource Development Corporation (HRD Corp) to charge RM300 per participant per course for the new microcredential initiative that has the industry riled up. 

Recently HRD Corp announced plans to create and regulate microcredentials in Malaysia. This means that they will act to certify and accredit specific selected programmes offered by training providers. This is to ensure that employers can be assured of the standards of the certification that is provided to their employees.

This is a timely and great step forward given the proliferation of certificates and programmes claiming to be “accredited”.  Given the evolving future of work – traditional jobs are changing and along with digitization and industry 4.0 technology that changes job roles every few months, people will need continuous skills enhancement to be able to maintain their employability in the competitive job market. We need to foster a culture of lifelong learning in the workforce.

My father previously operated one of the biggest local training centres in Malaysia, Seri Dinar Training Retreat (SDTR), rebranded today to IM Possible Solutions. Under this new brand, we have scaled back the training aspect in favour of the consultancy and project management aspects of the business. However, having heard the concern of other training providers and our clients on this plan by HRDF, I felt compelled to comment on this.

As a training provider and member of the industry, I acknowledge this is a good policy and a very much needed one with how the job market is changing. Kudos to HRD Corp for being proactive on this.

However, there are issues that HRD Corp has failed to address in its planning.

The main mandate of HRD Corp is to manage the HRD Fund which is a levy collected from the industry which they can then apply to use to finance the training of their employees. With this compulsory levy, companies are made to provide training and upskilling of their talents a priority or they would be essentially giving the Government free money. This was a game changer for human capital development in Malaysia and it greatly boosted the training industry in Malaysia.

Depending on the type and method of delivery for the course, a company can claim up to a maximum of RM3000 or RM1300 or RM700 per day per participant (see their FAQ on Enhanced Terms and Conditions For Allowable Cost Matrix at https://hrdcorp.gov.my/employer-guidelines/).

The biggest pushback on the microcredential plan is the intent of HRD Corp to collect RM300 per participant per course as the accreditation fees that will cover verification and audit. If HRD Corp will be collecting accreditation fees of RM300 per person per course for administering the microcredential system, it will lead to an increase in training fees for those courses. This in turn will disincentivize companies from allowing their staff to take these courses as the claimable amount may not be sufficient to pay for the course depending on the type and method of delivery. 

I understand that HRD Corp’s CEO, Datuk Shahul Dawood has stated the microcredential plan will only affect 15% of the courses offered by training providers under the HRD Fund. However, there is some confusion because referring to the FAQ on Micro credentials issued by HRD Corp, items 5 to 7, with very limited exceptions, they are expecting all courses to be accredited as micro credentials courses i.e. if it isn’t, you cannot benefit from the HRD fund claim mechanism. 

See the Microcredential FAQs here.

Regardless of whether all courses or just 15% of courses, it stands to reason that this additional cost burden for these courses will result in fewer people opting for these more valuable courses. In my opinion, this defeats the original purpose of the HRD Fund to upskill and train Malaysians and increase their economic competitiveness and relevancy in the market.

In addition, the biggest unanswered question is this: Why must HRD Corp take RM300 for every participant vs just certifying the course once every year or once every three years? Would not the same purpose of ensuring standard be served via certifying the course instead of each individual? They need to break down how this money will be used and justify why it must be done this way. The only reason I can think of is if HRD Corp will be creating and administering the exams for each microcredential course for each participant before they are awarded the qualification (in other words, if they fail, they will not be awarded the certificate notwithstanding they attended the course). However, from the same FAQ, that doesn’t seem to be the case. See item 12 which seems to suggest it is only a certificate issuance function being played by HRD Corp.

To put it another way, it’s similar to if the Malaysian Qualifications Agency (MQA) wanted to take anywhere between 10% to 42% of the fee for every university student in Malaysia every year from every university just because they accredited the course. 

Note: To be fair, I may be overdramatising this a bit as there are courses which will take more than a day.

If there is logic or data that can justify this, I urge HRD Corp to communicate it openly so that we can understand it. This is important for buy-in as HRD Corp has been rocked by alleged scandals and sudden bumper bonuses to their management in the last 4 to 7 years. 

In conclusion, this microcredential plan is a good one but these questions on the justification of HRD Corp’s fees will continue to damage its acceptance by the industry if left unaddressed.