Malaysian companies put short term profits ahead of training and R&D 7th August 1997 Back to News Menu Asian Business Strategy & Street Intelligence Ezine Join the APMF email list Monthly updates on new content

In true Malaysian style, Malaysian Deputy Prime Minister and "man most tipped to succeed Dr Mahathir", Datuk Seri Anwar Ibrahim, indicated that companies not taking advantage of government initiatives to develop training and R&D will soon be "pressured". According to the New Straits Times, Anwar said.. ..steps would be taken to identify these companies as they were not helping government efforts to have a new generation of skilled and competent labour... ...Compared to the private sector in developing countries, the private sector hesitates to explore areas which do not give a return in quick time. Friends of the Rat report that many, but not all, Malaysian companies still see R&D, and especially training, as a luxury. Training is generally not integrated with strategic plans, and is seen as an "add-on", which manifests itself in "token training" in the form of junkets to see lectures by visiting US "gurus" sitting in tiered rows with 1,000 others and a preference for the "fools gold" of cheap public courses which promise to turn an employee or manager into a "trained" employee in half a day. It is also becoming more evident that one of the few weaknesses of the glamour Malaysian Super Multi-media coridoor project is the lack of skilled local workers, a fact also acknowledged by Anwar, who said "..the country is still short of skilled workers in multi-media information technology, engineering and other areas...". Many are grateful that government restrictions on expat labour are being relaxed for MSC related projects, but there is little emphasis on how these imported skills can be transferred to local staff; expat labour being characterised by poor motivation to train locals. When these short term workers leave they often take all their skills, untaught, back with them. One way, as in other countries, to justify training, is to turn the HR or Personnel department into a profit center, and make a profit by selling services to others. Many high profile Malaysian companies in aviation, petroleum and property for example now have such centers. Establishing profit centers in companies is good practice, but it still reinforces the notion that training is an "add-on" and has to return a monetary value over and above its organizational value to the provider. Training can never be a profit maker in itself; its value is to increase the effectiveness of other parts of the organization. Becuse "training effectiveness" and "R&D returns" are notoriously difficult to quantify, and one step away from the bottom line, they are often mistakenly downgraded in emphasis, ignoring the age olde maxim that the most valuable things in life cannot be measured. One other barrier confronts the development of effective company training in Malaysia. Present high turnover rates often mean that little value is seen in training workers who will only leave 6 months later. In some ways, expected slower growth rates in the future will reduce turnover rates, and "integrated training", which integrates training with strategic projects and organizational development may provide answers to this concern. As suggested in a previous editorial, the real promise may come from evolutionary change rather than policy initiatives. Many Singapore companies are already making this move, who are reportably fattening up their training budgets at the expense of salary budgets. In a forthcoming decade of stable rather than unsustainable growth, management's concerns will naturally move to the long term rather than short term profit making, in order to sensibly ensure survival and attain global competitiveness. Nevertheless, Anwar's comments and promised subsequent actions, not only for training but also research, are timely and welcome.

© Asia Pacific Management Forum 1997
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