Malaysia on the right path for human capital development

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Malaysia’s good showing in the WEF’s inaugural Human Capital Index 2013 indicates that government initiatives recommended by the Performance Management & Delivery Unit (PEMANDU) under the Economic Transformation Programme (ETP) are beginning to bear fruit (photo credit: Tourism Malaysia).

By Palau Shavin

On the right track – that’s what most experts said about Malaysia’s unexpectedly good showing in the World Economic Forum (WEF)’s inaugural Human Capital Index 2013 which was released last month.

We ranked 22 out of a list of 122 nations, and fifth in the Asia-Pacific region, after Singapore, Japan, New Zealand and Australia, but ahead of South Korea, Taiwan, Thailand and the Philippines.

“The result is truly a credit to the Najib government which has worked hard to put into place initiatives with the goal to transform Malaysia into a high income nation with a highly skilled workforce by 2020,” said an editor of a business weekly when asked to comment on the index ranking for human capital development (HCD).

The index is part of WEF’s Human Capital Report 2013, a pioneer study that compares the abilities of 122 countries to “develop and deploy healthy, educated and able workers”.

In forming the rankings, countries were assessed in four areas, namely education, health, employment and enabling environment.

• The Health and Wellness pillar contains indicators relating to a population’s physical and mental well–being, from childhood to adulthood.

• The Education pillar contains indicators relating to quantitative and qualitative aspects of education across primary, secondary and tertiary levels and contains information on both the present workforce as well as the future workforce.

• The Workforce and Employment pillar is designed to quantify the experience, talent, knowledge and training in a country’s working-age population.

• The Enabling Environment pillar captures the legal framework, infrastructure and other factors that enable returns on human capital.

Switzerland topped the index, with Singapore (3) and Canada (10) the only non-European countries in the Top 10.

To compile the list, WEF used figures from UN organisations, such as the World Health Organisation, the International Labour Organisation and Unesco, along with its own surveys of executives.

The exercise, which was conducted with Mercer Consulting and the Harvard School of Public Health, is designed to help nations see where they fall on the global spectrum, and to highlight strengths in fostering their work forces as well as areas to be addressed

The report states that Malaysia performs well on most of the qualitative talent and training indicators in the Workforce and Employment pillar. However, its education, as well as its health and wellness pillars need improvement.

Malaysia’s scores for the respective pillars are Education (ranked 34 out of 122 countries, with an overall score of 0.526), Health and Wellness (39, 0.301), Workforce and Employment (18, 0.736) and Enabling environment (22, 1.014).

According to retired senior HR manager R. Somasundram, the fact that the report compares Malaysia favourably to Australia in the rankings shows that the government initiatives recommended by the Performance Management & Delivery Unit (PEMANDU) under the Economic Transformation Programme (ETP) are beginning to bear fruit.

“The population demographic for Malaysia shows that we still have a fairly young population, and in terms of labour participation, the signs are encouraging. This should give impetus to Pemandu’s Human Capital Development Strategic Reform Initiative, which is supposed to focus on enhancing and addressing the country’s human capital capabilities,” he said.

The SRI include leveraging on women’s talents (and increasing women’s participation in the labour force to 55% from the current 47%), upskilling and upgrading the workforce, modernising labour laws and ensuring and improving the safety net for workers.

Towards this end, the enforcement of the minimum wage for workers since Jan 1 this year is a step in the right direction towards meeting the government’s agenda of a high-income nation, says Somasundram.

The business editor also pointed out that though there are numerous positive takeaways from the index, “but the government should note where we should improve – for instance in improving the education gender gap, the percentage of the population with tertiary education, the publishing of scientific and technical journals, our global talent index, and the emigration rate of the tertiary educated, which stands at 10.5%.”

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