The HRDF must be improved and it is given an effective role, instead of others playing politics with its flaws and seeking its demise, writes Ronald Benjamin.
There have been calls by the Malaysian Employers Federation for the abolishment of the Human Resources Development Fund (HRDF) following scandals and an exposé by the media on the purchase of a property without the approval of the board of directors and the investment panel.
Such irregularities demand action by the authorities and those involved should be brought to justice.
Since taking over the Ministry of Human Resources, M Kula Segaran has taken action to clean up the HRDF.
There have not been cover-ups, and the HRDF management’s action has been transparent and accountable.
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In the new Malaysia, scandals have been exposed and previous leaders have been charged, but the ministries are intact with new leadership and new direction.
One does not need to abolish something just because the previous appointees lacked integrity. What is needed is a revamp and an infusion of a new culture of integrity.
Therefore the call by the employers’ body does not make sense. It reveals myopic thinking, instead of working for the common good and the long-term interest of the nation.
The question is not whether the HRDF should be closed down but whether its management can play a more effective role in human capital development to help the country reach developed status.
According to the Human Resources Development Act 2001, the role is about the imposition and collection of the human resources development levy to promote the training and development of employees, apprentices and trainees.
The establishment and administration of funds by the corporation is to promote and stimulate human resources training and to determine the terms and conditions under which any financial assistance is to be given.
When the role of the HRDF is analysed, it reveals an administrative, promotional body that collects funds to be reimbursed later. It lacks the power to audit and monitor the growth of human capital of the country.
The nation needs a strong body to audit organisations to certify human capital development growth.
Since the 1990s, there have been international quality standards like the ISO to monitor the process and development of quality systems in organisations. There has been yearly renewals of certificates after a compliance audit by Sirim to determine whether quality system processes in organisations are in line with ISO quality standards.
There is a need for a similar system to monitor human capital growth in the private sector. Best international practices of human capital development can be included in the certification process.
In my years of experience in the manufacturing sector, I observed that the bulk of human resources development funds is used to train management workers rather than factory machine operators in the B40 category.
The reason given is that productivity is lost every time these employees are sent for training. When HRDF officials propose giving free consultancy services in terms of training needs analysis, there is reluctance among organisations as they fear intrusion into its management system.
When there is a proposal for certification of experience, the response from workers who have the experience but no certification is poor because there is no advocate in organisations to focus on this necessity. There is also reluctance to pay a reasonable salary after employees have improved their skills.
In this context of indifference, it is vital that the element of surveillance and compliance audits is included in the role of the HRDF to boost human capital development.
This will be a win-win situation since employers will be compelled to train all workers. In the long run, with good leadership and management practices, organisations will benefit.
It is time the role of the HRDF is improved and it is given an effective role, instead of others playing politics with its flaws and seeking its demise.