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Published by

PEMBANGUNAN SUMBER MANUSIA BERHAD


MINISTRY OF HUMAN RESOURCES MALAYSIA
7th Floor, Wisma PSMB
Jalan Beringin
Damansara Heights
50490 Kuala Lumpur
Tel: +603 20964800
Fax: +603 20964907
www.hrdf.com.my

Disclaimer
The information contained herein is for the sole
purpose of information, guidance and education,
which was produced based on Benchmarking
Study conducted in 2009 and 2010.
This booklet present a guidelines on trainings
best practices which can be adopted by Small and
Medium Enterprises in Malaysia. PSMB reserves
the right to modify this booklet and/or amend
and delete the information published, at any time
without notice.
While every effort has been made to ensure the
accuracy of information presented as factual,
errors or omissions might still exist. PSMB bears
no responsibility for damages of any kind resulting
from the use of the information contained herein.
First Edition
March 2012

Benchmarking Training Best Practices


Of Malaysia SMEs

Forward
Small and Medium Enterprises
(SMEs) are important agents of
growth in most countries. They
tend to employ a lot of workers, are
owned by citizens and contribute
to their nations economy and
industry. In Malaysia, about 99%
of all business establishments are
SMEs and in 2010, it was estimated
that they accounted for more than
32% of Malaysias GDP. That is the
reason for the governments policy
to assist in SME development.
As the development policy is shifting
more towards a high-income
and knowledge-based economy
under the New Economic Model, it
necessitates that SMEs embrace
greater knowledge, innovation,
technology and creativity. To
achieve this aspiration, SMEs need
to develop their competitiveness
and increase the productivity of
their workforce.

Benchmarking Training Best Practices


Of Malaysia SMEs

ii

PSMB,
being
the
premier
governmental institution that is
being charged with the management
of the training, has produced this
publication in the hope that it will
further stimulate the use of training
facilities by SMEs.
This publication seeks to provide
the rationale for SMEs to undertake
training in all of its forms, whether
formal or informal. It also examines
the economic reasons why the
majority of the SMEs had failed
to carry out any training, and
examines why those reasoning
are faulty. A key feature of this
document is the findings of a study
by the PSMB that had focussed on
the best training practices found in
Malaysia. The findings were also
validated by a continuing study in
three other countries, i.e. Australia,
Singapore and Taiwan.
Another important element of this
publication is the documentation of
the training incentives and facilities
that are provided by government
that can be availed by all SMEs and
their employees.

iii

Benchmarking Training Best Practices


Of Malaysia SMEs

It is hoped that this publication will


bring a greater level of awareness
among SMEs and also larger
firms to consider training as a way
to raise the performance level
of their staff, so that they can be
more productive thus making their
firms more competitive.
In conclusion, I would like to
thank the various firms that have
participated in the surveys and
in the study. They contributed
both their time and shared their
views on training and related
human resource issues. Without
their input, this publication would
have been less relevant and the
rationale less convincing.

AMIRNUDDIN BIN MAZLAN

Chief Executive
Pembangunan Sumber Manusia Berhad
March 2012

Acknowledgement

We wish to express our deepest appreciation and


gratitude to those who have immensely contributed
valuable inputs, comments, feedback and eventually
made the publication a best practices reference for
the Small and Medium Enterprises, a reality:
1. Ministry of Human Resources
2. Economic Planning Unit
3. Department of Skills Development
4. National Human Resource Institute
5. Malaysia Productivity Corporation
6. Central Bank of Malaysia
7. SME Corporation Malaysia
8. Malaysian Employee Federation
9. Federation of Malaysian Manufacturing
10. ABX Express Sdn. Bhd.
11. Cape Technology Sdn. Bhd.
12. Kanzen Kagu Sdn. Bhd.
13. Semasa Sentral Sdn. Bhd.
14. Alcan Packaging Sdn. Bhd.
15. EPE Wilson Transformer Sdn. Bhd.
16. Malaysia Marine and Heavy Engineering Sdn. Bhd.
17. Tako Astatic Technology Sdn. Bhd.
18. Amalgamated Metal Builders (M) Sdn. Bhd.
19. FPM Sdn. Bhd.
20. Malaysian NPK Fertilizer Sdn. Bhd.
21. Vitrox Technologies Sdn. Bhd.
22. Balda Solutions Sdn. Bhd.
23. Hotel Capitol
24. Proreka (M) Sdn. Bhd.
25. PE Research Sdn. Bhd.

Benchmarking Training Best Practices


Of Malaysia SMEs

iv

Table
of
Content

Benchmarking Training Best Practices


Of Malaysia SMEs

Chapter 1

Introduction

Chapter 2

Understanding the Challenges to Training


2.1 Training Characteristics of SMEs
2.2 Qualifications Frameworks: An Uneasy Fit
with the Needs of SMEs
2.3 Responding to Skill Shortages
2.4 Incentives and Subsidies

5
5
7

Chapter 3

Best Practices and Training Methods


3.1 Best Practices in SME Training

Chapter 4

31

Government Programmes
4.1 Government Training Programmes for
SMEs

31

Chapter 5

35

8
8

Conclusion: Why SMEs Should Consider Training 35


as a Way to Become More Competitive and be
Global Players
5.1 Introduction
5.2 The Business Benefits of Improving Your
Staffs Skills
5.3 Business Benefits
5.4 Improving Employees Core Employability
Skills
5.5 Staying Competitive
5.6 Concluding Remarks

35
35
37
37
37
38

Benchmarking Training Best Practices


Of Malaysia SMEs

vi

Introduction

Chapter 1

Smart Malaysian Entrepreneurs know


that the quality of their workforce
is one of the main sources of their
competitive advantage. Superior
performance by their employees
and workers enable them to be more
successful in a dynamic business
environment. However, building a
strong team is easier said than done. It
is more difficult for the SMEs to recruit
and retain good quality employees
as the larger firms attract the talent
away with higher salary, incentive
performance pay and perks.
Smaller firms and enterprises are thus
at a disadvantage when dealing with
these challenges. So, how do they
cope?
Training is one of the ways in which
firms in particular the SMEs, can build
the competency and skill needed
to overcome their weaknesses and
disadvantages.
Traditionally, training was viewed as
a non-value-adding activity. However,
when it is properly managed, it can
be an effective intervention to build
the competencies and abilities of the
employees. Smaller firms and the SMEs
which operate in a dynamic business
environment have more to benefit
from human resource development
which is critical to enhancing their
competitiveness in todays globalised
business environment.

Benchmarking Training Best Practices


Of Malaysia SMEs

Benchmarking Training Best Practices


Of Malaysia SMEs

Past studies by Bank Negara


Malaysia (BNM) and the Roles
Review Taskforce by the Economic
Planning Unit (EPU) found that the
training approach among SMEs is
generally fragmented and lacks
coordination. It highlighted the need
to manage training in a systematic
manner to improve performance.
The study Benchmarking Training
Best Practices of Malaysian
SMEs Against International Best
Practices that was commissioned
by PSMB addresses the concern
and its findings are the essence of
this publication.
Best practices are practices that
have shown to produce superior
results. They are judged as being
exemplary or good, or successfully
demonstrated and can be suitably
adapted by SMEs. Some best

Benchmarking Training Best Practices


Of Malaysia SMEs

practices include having a welldefined training policy, active


involvement of the CEOs and the
managers in the training function,
strategic alignment of training with
the firms business objectives,
proper identification of organisation
and departmental training needs,
flexible training budget, an annual
training plan, managing training
as mini-projects with focus on
application and results, planned
On-Job-Training (OJT) process,
and evaluating the training activity.
Some of the best practice enablers
include personal commitments
by the CEOs, direct involvement
of heads of departments, clear
management
philosophy
and
policies, dedicated training structure
and personnel and facilities.
This publication is to provide the
rationale, information and examples
for firms to raise their employees
capabilities and enable them to
execute in their jobs.

What is an SME?
An enterprise is considered an SME in each of the respective sectors based
on the Annual Sales Turnover or Number of Full-Time Employees as shown
in the table below.

Manufacturing,
ManufacturingRelated
Services and
Agro-based
industries

Micro
enterprise

Small
enterprise

Medium
enterprise

Sales turnover
of less than
RM250,000
OR full time
employess
less than 5

Sales turnover
between
RM250,000
and less than
RM10 million
OR full time
employees
between
5 and 50

Sales turnover
between
RM10 million
and
RM25 million
OR full time
employees
between
51 and 150

Sales turnover
between
RM0.2 million
and RM1 million
OR full time
employees
between
5 and 19

Sales turnover
between
RM1 million
and RM5
million OR full
time employees
between
20 and 50

Services, Sales turnover


of less than
Primary
RM200,000
Agriculture
OR full time
and Information
employees
&
less than 5
Communication
Technology
(ICT)

Benchmarking Training Best Practices


Of Malaysia SMEs

Understanding The
Challenges in Training

Chapter 2

Today, more and more companies


realise that their staff is their
most important asset and human
resource development is an
investment that builds the capability
of their workers to produce superior
performance. Training represents
a key process in the development
of human resources in which
organisations can develop the right
knowledge and skills, and shape
the attitudes of the employees to
meet workplace standards. For
training to be effective it must be
managed in a systematic manner
and incorporate best practices
whenever possible.
It has therefore become a vital
requirement for managers of the
SMEs to fully understand the
challenges involved in promoting
equal access to and participation
in, skills and learning. This
understanding will guide them
in recognising peoples different
needs, situations and goals and
ultimately removing the barriers
that limit what people can do and
can be.
2.1 Training Characteristics of
the SMEs
Learning does take place in small
firms but it is informal in nature. The
process of skills formation in the

Benchmarking Training Best Practices


Of Malaysia SMEs

Go confidently in the direction of your dreams.


Live the life you have imagined.

SMEs differs from that of medium


and large-sized enterprises.
Managers of small enterprises
prefer to use informal approaches.
Even though small enterprises
require the same level of skills as
that of the larger firms, the delivery
of training in such skills is different.
It is important to understand the
relationship between business
environment and training in SMEs.
The smaller the enterprise is, the
more dominant are the concerns
about addressing the needs of
day-to-day operations. Small
enterprises can handle their
internal environment quite well but
they have little control over their
external environment thus are more
inclined to adopt strategies that
are reactive in nature. Given this
nature, systematic approaches to

training and HR development are


not priorities for most of these firms.
Formal training commonly available
to small enterprises does not
match their needs. Traditional
occupational courses can be too
specialised for smaller enterprises
where multi-skilling is prevalent
and workers perform a wide range
of tasks. Conventional courses
such as those in marketing and
management tend to be too general
and must be tailored to the specific
context of sector if they are to be of
interest to the SMEs.
As
enterprises
grow,
the
SMEs become more complex.
Relationships
become
more
explicit and formal to facilitate
the delegation of functions and
Benchmarking Training Best Practices
Of Malaysia SMEs

The best way to prepare for life


is to begin to live.

responsibilities. In human resource


development and training functions
of the enterprise, the signs of these
processes include the emergence
and use of written training plans,
the identification of training needs,
the use of formal qualifications,
and formal assessment of workers
performance, stronger links between
training and business objectives and
the evaluation of the effectiveness
of training become more common.
Also more systematic and planned
approaches to the organisation,
delivery and process of learning
and training are introduced.
It is frequently argued that the
SMEs should be given priority as a
specific target group because while
the SMEs account for the majority
of the employed they tend not to
train. Measures should target these
groups.

Benchmarking Training Best Practices


Of Malaysia SMEs

2.2 Qualifications Frameworks:


an Uneasy Fit with the Needs
of SMEs
National qualifications frameworks
have been developed into key tools
for shaping national education,
training
and
qualifications
systems. This promise greater
coherence in the education and
training systems and improved
alignment between skills supply
and the needs of employers. This
phenomenon can be observed
world-wide. An integral component
of a comprehensive qualifications
system is prior learning assessment
and recognition mechanisms. Many
countries have been reforming
their qualifications frameworks and
the recognition of non-formal and
informal is part of this process.
When compared to large firms,
fewer small firms see training for

qualifications as important. A subset


of SMEs was more likely to report
benefits, to measure its impact and
in a more favourable way to view
the qualifications. The design of the
training and training qualifications
is important in the engagement
of small firms in training. Training
must be tailored to real needs and
working environments. Delivery
must be flexible in terms of content,
timing and form of delivery. The
standards framework should be
able to be broken into units with
short periods of instruction.
2.3 Responding to Skill Shortages
Skill shortage is a mismatch
between the supply of people with
particular skills and the demand
for people with those skills. This is
a normal feature of any economy
that is changing. Shortages may
be caused by the time it takes
for new skills to be developed to
meet the needs of industries that
have changed as a result of new
technology, or rapid changes in
consumer demand for products and
services in industries affected by
cycles in the economy.
Balancing the supply of skills with
demands in the labour market
has
challenged
policy-makers
and planners for some time.
When supply is insufficient, skills
bottlenecks can impede growth
and development and if supply

exceeds demand there will, then


be unemployment and the scarce
resources spent producing the
surplus skills are wasted. Training
institutions are often criticised on
the grounds they are not sufficiently
responsive to the needs of industry,
and in many cases courses are
out-of-date and there is a lack of
flexibility in delivery such as timing
and duration of courses.
2.4 Incentives and Subsidies
SME training is often supported by
Government subsidies as the SMEs
are obviously at a disadvantage
where financing is concerned.
Most countries, including Malaysia,
permit firms to offset training costs
against profits in their tax returns.
These schemes are easy to
administer and allow employers to
decide who to train and how to train.
Levy schemes too have shown their
effectiveness in raising the level
of employer training and the levy
generated funds can be used to
shape the level and type of training
in small enterprises as well as meet
the training needs of less qualified
workers. Smaller employers tend
to resist levy systems because of
the paper work and bureaucratic
processes
involved.
Some
resistance and resentment is due to
the compulsory participation.

Benchmarking Training Best Practices


Of Malaysia SMEs

Best Practices And


Training Methods
3.1
Best Practices
Training

Chapter 3

on

SME

What is a best practise in training?


Best practices was defined by the
2009 PSMB study as practices that
have shown to produce superior
results, selected by a systematic
process and judged as exemplary,
good or successfully demonstrated
and can be adapted by others.
The table on page 11 shows
the Best Practise for Small and
Medium Entrepreneurs from the
PSMB study that was benchmarked
against a few other countries. Some
practices may not work for very
small enterprises because their
small size does not permit them
to have these facilities and could
be a constraint on how they work.
However, the list gives an overall
picture of what has worked. Firms
can select those practices that best
suit their circumstances.
Thus, this benchmarking shows the
following key points:
Top management support and
commitment is necessary and
important, and for the staff to know
that training will be evaluated as
part of the job function;
Benefits of training are clear to
all: for top management a link of

Benchmarking Training Best Practices


Of Malaysia SMEs

There is no failure except


in no longer trying.

training outcomes to corporate


goals and objectives must be
clearly established; for staff, it
is that training is necessary for
productivity gains, perhaps even
mandatory, but linked to higher
rewards;
The infrastructure and resources
for training is available: annual
training plan (ATP), budgets, and
where required, even a dedicated
personnel with responsibility in
training;

Training Needs Assessment


conducted based at staffs
feedback, from performance
appraisal reports as well as
corporate goal and objective;
Training programs with the core
and mandatory components
catering to various staff levels
and focused on functional areas
such as operational excellence,
leadership or job skills, and
designed with staff inputs or
feedback;
Benchmarking Training Best Practices
Of Malaysia SMEs

10

Use all types of training methods,


including On-Job-Training (OJT);
Use both internal and external
trainers, but quality is paramount.
For all trainers, certification is
required (specialists preferred).
For external trainers, do reference
checks on their training; and
Use (level 1) evaluation to
measure the trainee reaction
about learning activities.
The training best practices which
may serve as models for all
companies as found in this study
are:
coaching and mentoring as it
helps to build a strong team of
top performers;

on-the-job training as it helps with


peer learning and team building;
workshops as it provides
opportunities to new ideas and to
upgrade skills;
structured training as it usually
goes through subject matters in
a thorough manner;
team project training as collective
ideas may have new insights or it
could also inform which staff can
or cannot work interactively with
others;
e-learning as it helps in getting
exposed to new ways of learning,
and
personal development programs
as it allows staff to take ownership
of their training needs.

List of Best Practices

FRAMEWORK CONDITIONS OF TRAINING

11

Top management (CEO / MD / GM / Director) must be positive role


models for training

Heads of department / managers should be actively involved in


training

Training is linked to business plan and continuous improvement

Dedicated training person (specialist) to provide customised and


targeted training

Flexible budgeting approach that is based on needs

Take advantage of the levy and governmental financial support

Benchmarking Training Best Practices


Of Malaysia SMEs

Annual training plans (ATP) can provide perspective to training needs


and requirements

Ensure that all new recruits complete mandatory training programs


before confirmation

Develop a culture of learning in your organisation

10

Employees should know the importance of continuous training

11

Training is linked to performance appraisal and remuneration

12

Formal job descriptions to enable workers and owners to know and


expect what to do

13

Staff performance appraisals to identify skill gaps and a basis for


training
ANALYSIS (Training Need Analysis)

14

Departmental needs for training must be identified

15

Obtain information from multiple sources: CEOs, HODs, Employees


and performance appraisals
DESIGN OF TRAINING CONTENT

16

Develop core / mandatory training programs

17

Training must be based on the occupational level of employees

18

Categorising training by types according to operational excellence,


leadership development and job application skills
DEVELOPMENT OF TRAINING CONTENT

19

Discuss with trainers in order to customise content

Benchmarking Training Best Practices


Of Malaysia SMEs

12

20

Certifying internal trainers ensures training quality

21

Use Training Supervisors and line leaders as On-Job-Training (OJT)


trainers

22

Do reference checks on external trainers

23

OJT is an important training method

24

Engage external training providers when there is a lack of internal


capacity

25

E-learning is an emerging tool in training

26

Coaching and mentoring are also important training methods


IMPLEMENTATION OF TRAINING

27

Ensuring training attendance of between 95 - 100%


EVALUATION OF TRAINING

28

Conduct Level 1 evaluation to measure effectiveness

29

Conduct Level 2 evaluation to measure learning

30

Conduct Level 3 evaluation to measure application

31

Modify training content for continuous improvement after evaluation

32

Use evaluation results to improve on training and share evaluation


summary with trainers
Future training needs

33

13

Linking training to current and future needs of your firm

Benchmarking Training Best Practices


Of Malaysia SMEs

To do great things is difficult; but to command


great things is more difficult.

Best Practice # 1:

Top management (CEO / MD/ GM


/ Director) must be positive role
models for training
Description:
Top management should act as
positive role models so that a
strong learning culture is created.
Leadership behaviour is the most
important determinant of corporate

culture. Some of the positive


behaviours
include
personally
conducting training, developing
management
skills
training,
identifying
needs,
especially
organisational needs, opening
and closing all in-house trainings,
tracking attendance reports and
sitting in and observing training on
a regular basis.
Many of these acts can be symbolic
but they are important aspects of
training culture.

Benchmarking Training Best Practices


Of Malaysia SMEs

14

Best Practice # 2:
Heads of Department / Managers should be actively involved in training
Description:
Managers should also act as positive role models to sustain the learning
culture. Some of the positive behaviours include personally conducting
training, identifying department needs, sharing knowledge from trainings
attended, tracking attendance records, and observing internal trainings.

Our truest life is when


we are in dreams awake.

15

Benchmarking Training Best Practices


Of Malaysia SMEs

The essential thing is not knowledge,


but character.

Best Practice # 3:
Training is linked to the business plan and continuous improvement
Description:
Todays organisations can only survive and succeed through continuous
improvement. Innovation may not be applicable to all, but continuous
improvement is a must for all organisations. Continuous improvement will
not take place without continuous learning. Training has a critical role to
play in ensuring continuous learning by all employees and also giving the
employees the right continuous improvement tools.
In addition to addressing operational issues, training must ultimately support
the effective execution of the business plan. The role of training must be
clearly identified once the business plan is completed. The training budget
comes from the company and the company must be the ultimate beneficiary
of the training.

Benchmarking Training Best Practices


Of Malaysia SMEs

16

Best Practice # 4:
Dedicated training personnel to
provide customised and targeted
training
Description:
Having a dedicated training person
can provide better focus and it
will improve the overall training
effectiveness. It also communicates
the importance of training in the
organisation.
However, this best practise is
not suitable for the small firm as
the amount of training would be
extremely limited.

Best Practice # 5:
Flexible budgeting approach
Description:
The
training
budget
should
vary according to needs rather
than working backwards from a
predetermined figure. Training
should be treated as an investment
in people rather than a cost item. A
flexible approach will ensure that the
right trainings are conducted. If the
cost is high, then prioritising training
needs will solve this problem.

17

Benchmarking Training Best Practices


Of Malaysia SMEs

Best Practice # 6:
Take advantage of the levy and
Government financial support
Description:
It is important that companies plan
relevant trainings to fully utilise the
levy contribution rather than always
carrying forward the levy balance.
Some companies treat it as a tax
payment and the money lies idle.
As the levy is contributed by the
company, the money belongs to the
company and hence it must fully
utilise it to build the capability of its
employees.

Best Practice # 7:
Annual Training Plan (ATP)
Description:
Rather than doing training on an
ad-hoc basis or based on requests
from managers as and when
necessary, it is important that the
preparation of ATP is treated as a
performance requirement. This will
make administration of trainings
easier and also proper planning will
lead to better results. Failing to plan
is planning to fail.
The ATP should include the schedule
/ time table, target audience, course
outline, and cost. The plan must
closely follow the business cycle so
that it does not affect the operations.
Benchmarking Training Best Practices
Of Malaysia SMEs

18

Best Practice # 8:
Ensure new recruits complete
mandatory training programmes
before confirmation

Employees should know the


importance
of
continuous
training

Description:

Description:

This practice ensures that


employees acquire the right
knowledge and skills to effectively
perform the job.

After developing a training


culture
and
system,
the
employees
themselves
would
know the importance of learning
and continuous training. More
information and affordable training
opportunities could help to raise
employees awareness of the
importance of skills and continuous
learning.

Best Practice # 9:
Develop a culture of learning, i.e.
a training culture and system
Description:
Training culture was highlighted as
an important difference between the
countries, and this is certainly true
in the case of Taiwan and Australia.
Developing a training culture and
system is important for employers
and employees to learn and improve
themselves continuously.
Certainly, a learning culture means
that there is continual search for
improvement and accounts for the
fact that lifelong learning has been
widely accepted.

19

Best Practice # 10:

Benchmarking Training Best Practices


Of Malaysia SMEs

Best Practice # 11:


Training is linked to performance
appraisal and remuneration
Description:
The link between training to
performance and reward provides
the incentive for learning and is a
necessity for career development
and promotion. The incentive
must be strong enough before it
can stimulate the intended action.
Clearly, those with more and better
skills will command more pay but
the path to skills is through learning,
training and career development.

Best Practice # 12:


Formal job descriptions
Description:
Formal job descriptions and staff performance appraisals seem to be
common features in SMEs in other countries but are not widely practised
by the ones in Malaysia. The average size of the firms in the other countries
is larger than the average Malaysian counterpart, and that may account
for the difference in the HR practice. Larger firms and organisations, even
in Malaysia, tend to have job descriptions and appraisals as well, and the
formal job description will provide a framework on the skills and performance
of staff.

Benchmarking Training Best Practices


Of Malaysia SMEs

20

Best Practice # 13:


Conduct staff performance
appraisals to identify skill gaps
Description:
Annual appraisals or evaluation
should be conducted from time to
time. It could help identifying skill
gaps and provide an overall picture
of how staff performs and what
training is needed.

Best Practice # 14:


Identify department needs for
training
Description:
Organisational goals are generally
cascaded down to department goals
to ensure effective implementation.
In addition to identifying business
needs, it is also important that
departmental needs are identified
as these departments will have
different needs. This is to ensure that
all the departments get assistance
in the area of training. This is the
strategic partnership role of training
where training actively supports
the achievement of departmental
goals. Every department must have
a Training Plan.

21

Benchmarking Training Best Practices


Of Malaysia SMEs

Best Practice # 15:


Obtain
information
from
multiple sources: CEOs, HODs,
employees, performance appraisal
Description:
Training needs information must be
obtained from all the stakeholders
especially the CEO, Head of
Department (HOD), Supervisors
and ordinary employees. Documents
related to performance issues like
quality reports, accident reports,
performance appraisal reports
must also be analysed. Information
obtained from multiple sources and
their analysis will lead to better
training need analysis findings.
Interview is the most effective
method of data collection as it
allows the asking of open ended
questions. The other methods are
focus group meetings, checklists /
questionnaire, observation and
document analysis.

Best Practice # 16:


Develop core / mandatory programmes
Description:
To develop the core competence of an organisation and to ensure consistency,
it is important to develop core programmes that are mandatory for all levels
of employees. These core programmes must relate to the strategy and
culture of the organisation. For example if quality is the key priority of the
company, then all employees must attend training on quality management.
This will create a common mind set leading to unity of actions or synergy.

Benchmarking Training Best Practices


Of Malaysia SMEs

22

Best Practice # 17:


Training must be based on
the occupational levels of
employees
Description:
Classifying training according to
levels of employment will ensure
that all levels are covered, i.e.
classifying training based on the
target audience. The common
levels of employees include
senior management, middle
management, supervisors and
ordinary employees.

Best Practice # 18:


Categorising training by types
according
to
operational
excellence, leadership development
and job application skills (Type of
training)
Description:
This will be effective if it focuses on
the critical success factors. Operational
excellence will include training on
quality, cost, delivery and technical
support. Leadership development is
important as leadership matters. Poor
leadership generally leads to poor
organisational results. Job application
skills refer to job related or technical
skills that employees must posses to
meet performance standards.

Best Practice # 19:


Discuss with trainers in order to
customise content
Description:
This is important because correct
and detailed information must be
given to the trainers so that content
can be customised. It will also be an
opportunity to assess the capability of
the trainers to customise the content.
This discussion should be held with
the trainers, not with the marketing
people of the training providers.

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24

Best Practice # 20:


Certifying internal trainers
ensures training quality

Do reference checks on external


trainers

Description:

Description:

Trainers can be chosen either


based on their working experience
or developed on the job or through
a proper process to assess their
competencies. Creating an internal
process in terms of identifying
subject matter experts and making
them go through a structured
competency
and
assessment
based Training of Trainers (TOT)
program will ensure high quality
On-Job-Training (OJT) trainers.

Reference
checking
is
an
established practice in the hiring
process as it allows the company
to obtain a second opinion about
the candidate. The same applies to
training. It is quite likely that HR /
Training people know each other in
the industry. Doing reference checks
might give accurate and reliable
information about the trainers.

Best Practice # 21:


Training supervisors and line
leaders as OJT trainers
Description:
Supervisors are responsible for
the Day-to-day running of the
operations. They have to ensure
that all their employees are skilled to
meet targets. They need to conduct
on the job training to achieve higher
productivity. Hence all supervisors
should be certified as OJT trainers.
This will ensure that job instruction
methodology is effective and
this is also part of the process of
developing their leadership skills.
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Best Practice # 22:

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Best Practice # 23:


Recognise On-Job-Training (OJT)
as an important training method
Description:
OJT can be either informal
or planned. Planned OJT are
typically conducted by employees
identified as having superior
technical knowledge / skills
and who can effectively use the
instructional techniques. Because
conducting OJT is not a skill
most people develop their own
style. Organisations with formal
OJT programmes provide train
- the - trainer training for these
employees.

Best Practice # 24:

Best Practice # 25:

Engage external trainers when


lacking in internal capacity

E-Learning is an emerging tool in


training

Description:

Description:

For companies that need specialised


training, lacking in internal capacity;
and require training quality, they
should consider procuring external
training services as a source of
training support. However, it would
be important first to do a check
on the qualifications and training
performance of the external trainers.

The use of ICT in learning and


training holds considerable promise
for smaller firms. It is flexible, allows
learning at the time, place and pace
best suited to the learner. E-learning
has had a major influence on training
in large companies facilitating
professional development activities
and extending the provision of
training. It is frequently blended with
other forms of training.

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Best Practice # 26:


Carry out
mentoring

coaching

and

Conducting level 1 evaluation

Description

Description:

Coaching and mentoring helps


to build a strong team of top
performers. It is a programme
which all levels of management
have to work together to develop
and deliver.

Measuring participant satisfaction


must be done for all training
programmes, which is to find out if
there are any obstacles to learning.
Particular attention must be given
to the design of the questionnaire,
or evaluation instrument. It should
measure how well the training has
met the objectives / expectations,
relevance and usefulness of the
content, quality of training materials
and the facilitation skills of the
trainer.

Best Practice # 27:


Ensuring attendance of between
95 - 100%
Description:
Training programmes are organised
based on nominations which are in
turn based on needs. Participants
who have been nominated must
attend the training. Attendance is
also influenced by the attitudes of
the participants especially their
motivation to learn. Rewarding
people to attend training may not
be effective. A demerit point system
linked to performance appraisal
may be better.

27

Best Practice # 28:

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Best Practice # 29:


Conducting level 2 evaluation to
measure learning
Description:
Training programmes are organised
for participants to learn new skills.
The amount of learning that takes
place during training should be
measured. This can be done by
conducting pre- and post-workshop
tests. The score will also indicate
the effectiveness of design and
delivery.

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Best Practice # 30:


Conducting level 3 evaluation to
measure application
Description:
Performance improvement can only
be achieved through the application
of the new knowledge and skills
acquired. It can be measured
through follow up questionnaires
to be completed by both the
participants and their superiors and
post training discussion.

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Best Practice # 31:


Modify training content for
continuous improvement after
evaluation
Description:
Evaluation results should be
used to make important decisions
about future training, especially in
terms of design and delivery. This
applies especially to repetitive and
continuous development programs.

Best Practice # 32:


Use evaluation results to improve
on training and share evaluation
summary with trainers
Description:
Evaluation results as a feedback
should be given to the trainers who
can use it to further improve the
programmes. This is an important
component of strategic partnership
with trainers.

Best Practice # 33:


Linking training to current and
future needs of your firm
Description:
Training should not only focus
on the current needs. It is also
important to provide courses on
future needs since trends and
technology change from time to
time. It will help improve business
performance and help to gain
competitive advantage.

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Government Programmes
4.1 Government Training
Programmes for SMEs

Chapter 4

Formulating sound policies and


initiatives can unleash the growth
potential of SMEs and translating
them into an effective plan of action
will go a long way to ensuring their
sustainability and competitiveness.
By acknowledging their important
role in the economy, the Government
is committed to supporting and
nurturing their development so
that SMEs can become important
growth engines for the country.
In 2005, the National SME
Development Council (NSDC)
introduced the SME Development
Framework whose objective is to
develop competitive and resilient
SMEs across all sectors. Among the
key initiatives of the NSDC include:
Adoption of a standard SME
definition
nationwide
and
introduction of the National SME
Development Blueprint which
was subsequently known as the
SME Integrated Plan of Action
(SMEIPA). The SMEIPA identifies
the key programmes for SME
development based on the three
strategic thrusts, namely
(i) strengthening the enabling
infrastructure
for
SME
development;
(ii)
building their capacity and
capability; and

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Benchmarking Training Best Practices


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The future belongs to those who believe


in the beauty of their dreams.

(iii)
e nhancing
financing.

access

to

Establishment of a Central
Coordinating Agency for SME
Development, which was realised
through the transformation of the
Small and Medium Industries
Development
Corporation
(SMIDEC) into SME Corporation
Malaysia (SME Corp. Malaysia)
in order to streamline the
coordination,
monitoring,
and assessment of all SME
development initiatives.

Thus, through this framework, the


Government advances its agenda
for Training and Human Resource
development which are imperative
to fulfilling one of the three main
strategic thrusts outlined by the
NSDC viz. building capacity and
capability of the SMEs and this
too is critical in realising the New
Economic Model.

Benchmarking Training Best Practices


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32

The Tenth Malaysia Plan (2010-2015) will give


further encouragement and its programmes
include:
(i) hands-on training for employees of the SMEs
that supply products and services to MNCs
and large companies,
(ii) training for 20,000 SMEs a governmentrecognised training institutes in management,
finance, marketing and ICT applications,
(iii) medium-term training maps for the SMEs,
and training the SMEs in areas which are
not available locally, i.e. by engaging foreign
trainers, and
(iv) Skills Upgrading Programme for enhancing
the skills and capabilities of workers of SMEs.
Some of the training programmes provided by
different agencies in Malaysia are shown in the
appendix. They not only provide training for your
employees, but also provide information on how
to develop SME businesses, and programme that
are organised by various ministries or agencies.
Online reference links for those agencies are also
provided later.

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34

Conclusion: Why the SMEs


Should Consider Training
As a Way to Become More
Competitive and Global
Players

Chapter 5

5.1 Introduction
There are great financial benefits for firms
if their employees are competent in their
jobs. To achieve this goal, training is an
important activity. Therefore, it is important
to know how to implement and monitor the
right training which is vital to any SME
business. All aspects of training should be
taken into account, especially as it relates
to the cost and time involved.
This guide has explained why training is
so important to SMEs, what best practices
could be applied to improve core skills
and how it can fit into business strategy,
and training programmes provided by the
government.
5.2 The Business Benefits of
Improving Your Staffs Skills
Successfully trained employees and staff
can significantly improve the chances of
success and business growth. If they can
be equipped with the right competencies
and skills, then businesses can see:
increased productivity and better quality
of work;
increased overall profits;
improved employee motivation;

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Benchmarking Training Best Practices


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There is only one success--to be able to


spend your life in your own way.

improved customer satisfaction;


competitive advantage; and
reduced staff turnover and
absenteeism

will far outweigh its cost.


5.3 Business benefit

Thus, training is an investment


in ones employees and staff. If
workers are sent for training via a
training programme, no doubt it will
incur cost for the firm but the payoff
is in yielding higher-skilled workers
who will be more productive than the
unskilled ones. Past studies have
shown that the productivity gained
from a good training programme

The benefits of training in one area


can flow through to all levels of the
organisation. Over time, training will
boost the bottom line and reduce
costs by decreasing:

5.3.1 The Flow-on Effect

wasted time and materials;


maintenance costs of machinery
and equipment;
Benchmarking Training Best Practices
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36

workplace accidents, leading to


lower insurance premiums;
recruitment cost through the
internal promotion of skilled staff;
and
absenteeism.
5.3.2 Staying Competitive
Businesses
must
continually
change their work practices and
infrastructure to stay competitive
in a global market. Training staff to
manage the implementation of new
technologies, work practices and
business strategies can also act as
a benchmark for future recruitment
and quality assurance practices.
Training can bring impact to business
profit margins by improving:
staff morale and satisfaction;
soft skills such as inter-staff
communication and leadership;
time management; and
customer satisfaction.
It is important to choose training
programmes that are suitable to the
firm, which:
is related and linked to business
goals and performance;
is part of a business-wide
strategy;
has tangible and obtainable
objectives for your employees;
focuses on helping employees

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Benchmarking Training Best Practices


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carry out existing tasks more


efficiently or to a higher standard;
can train individuals to take on a
different role e.g. with increased
responsibilities; and
sets out who is responsible for
planning,
implementing
and
evaluating the training.
5.4 Improving employees core
employability skills
Almost every job in every business
demands a range of basic or core
skills. Some of these are necessary
skills for employability, while others
are needed to ensure tasks are
performed effectively.
Speaking and writing in English is
another core employability skill for
local employees. By improving their
spoken and written English, they
will become important members of
the business team.
5.5 Staying Competitive
To retain an edge over the
competitors organisations, firms
have to keep abreast of industry
changes, technological advances
and new industry legislations.
Nationally

recognised

training,

which are continually reviewed and


updated by industry and training
experts, can provide businesses
with the latest industry and global
marketplace developments so that
they can stay abreast of them.
5.5.1 New business opportunities
Trained and motivated staff
who understand the specifics of
the business operations, are a
sustainable competitive advantage.
They will give the business a
competitive edge by:
increasing
productivity
and
standards in production, thereby
boosting business reputation;
being able to undertake a greater
variety of work and therefore
create the possibility to expand or
open up new markets;
allowing firms to bid for more
specialised, high value contracts;
and
assisting firms to meet their
business objectives faster.
5.5.2 Take advantage of new
technologies
Training is vital to stay ahead of the
competition and to take advantage
of new information technologies,
which play a crucial role in many
organisations.
Trained staff will prevent your
business from suffering skill
shortages in IT and all other areas
relevant to your industry.
Training can be flexible and can

occur with little disruption to


the usual business operations.
Vocational education and training
can be delivered when and where
it is suitable - after hours, on or offthe-job, and online.
5.6 Concluding Remarks
This PSMB booklet has provided a
list of best practices on training that
has come out of a study in Malaysia
and validated in other countries.
The SMEs need to understand
that there are many ways to train
and they should consider using or
customising them to the needs of
their own circumstances and size.
The list of best practices is
essentially a menu from which firms
can choose what is best and suitable
for them. Some may be able to get
the formula right the first time round
but others may take a few tries.
The new economic environment
will become more challenging in
the years ahead and SMEs have
no choice but to train if they want to
grow and compete in a dynamically
changing business environment.

Benchmarking Training Best Practices


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38

Appendix
Programme

Objective

Ministry /
Agencies

Manufacturing
Skills Upgrading
Programme

The Programme is aimed at enhancing the


skills and capabilities of SME employees
in the technical and managerial levels.
The training initiative is implemented in
collaboration with local Skills Development
Centres.
www.smecorp.gov.my

SME Corp

Capacity Building,
Training in Productivity
& Quality

To develop human capital, to strengthen


system & process, and to reinforce the
culture of excellence.
www.mpc.gov.my

Malaysia
Productivity
Corporation
(MPC)

Best Practices
Programmes

To identify and to share benchmarks and


best practices among SMEs.
www.mpc.gov.my

MPC

Technopreneur
Development and
Management

Develop and drive entrepreneurship


through technology and quality.
www.mosti.gov.my

Ministry of
Science,
Technology
& Innovation
(MOSTI)

Services
Homestay
Entrepreneur Training

Malaysias Mesra Programme aims to


shape and nurture the capability of human
capital in the tourism industry to provide
a sustainable and competitive quality
service.
www.motour.gov.my/en/

Craft Preservation &


Restoration

The Programme is aimed at enhancing


the skills and capabilities to restore and
preserve craft heritage
www.kraftangan.gov.my

Ministry of
Tourism
Malaysia
(MOTOUR)

Malaysian
Handicraft
Development
Corporation

Plantation Industries and Commodities


Knowledge Sharing
programme

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This Programme aims to make the


website an effective tool and platform to
increase awareness of MPOB activities
and to promote knowledge sharing among
industry players
www.kppk.gov.my

Ministry of
Plantation
Industries and
Commodities
(MPIC)

Diploma in Palm Oil


Technology

To contribute to HRD development in the


oil palm industry
www.kppk.gov.my

MPIC

Tunas (Tunjuk Nasihat


Sawit)

To make available TUNAS officers to assist


smallholders in good agronomic practices
www.kppk.gov.my

MPIC

Capacity Development
Programme

Enhance and develop capacity of SMEs


human resource in productivity and quality
subject matters.
www.mpc.gov.my

MPC

Strategic Productivity
& Performance
Measurement
Programme

To provide techniques/tools for SMEs to


measure and analyse their productivity
performance.
www.mpc.gov.my

MPC

Management
Information System
& ICT Application
Programme

To enhance the application of ICT among


SMEs through continuous improvement
and facilitating them to be more
competitive.
www.mpc.gov.my

MPC

Halal Industry Training


Programme

Develop awareness and skills among


professionals in the Halal Industry.
www.hdcglobal.com

Retraining and Skills


Upgrading

Retraining and skills upgrading of SMEs


workforce under the Human Resources
Development Fund.
www.psmb.gov.my

Ministry
of Human
Resources
(MOHR)

Self-Development
Module

Conduct courses in universities and


provide exposure to Community
College students on soft skills and
entrepreneurship courses to inculcate
interest in entrepreneurship.
www.mohe.gov.my

Ministry
of Higher
Education
(MOHE)

Short Term Courses

To upgrade skills and retrain to meet


employment needs of the community and
that of SMEs.
www.mohr.gov.my

MOHR

Training and Advisory


Program

To provide entrepreneurship enhancement


courses skills and technology to rural
entrepreneurs.
www.rurallink.gov.my

MRRD

General Skills

Halal Industry
Development
Corporation
(HDC)

Source: SME Corp. Malaysia


Benchmarking Training Best Practices
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40

REFERENCES

Ministry of Higher Education (MOHE)


No.2 Menara 2, Jalan P5/6 Presint 5
62200 Putrajaya, Malaysia
Majlis Amanah Rakyat (MARA)
Bangunan Medan MARA
No 21, Jalan Raja Laut
50609 Kuala Lumpur
Tel : 603-2691 5111
Fax: 603-2691 3620
Email: webmaster@mara.gov.my
Website: www.mara.gov.my

Malaysia External Trade Development


Corporation (MATRADE)
MATRADEs Exporters Training
Programme
Menara MATRADE,
Jalan Khidmat Usaha,
Off Jalan Duta,
50480 Kuala Lumpur,
MALAYSIA
Website: http://www.matrade.gov.my/en/
online-applications/matrades-exporterstraining-programme

MALAYSIA PRODUCTIVITIY
CORPORATION (MPC)
Enterprise Innovation Department,
Lorong Produktiviti, Off Jalan Sultan,
46200 Petaling Jaya, Selangor
Tel : +603-7955 7266 / 03-7951 2391
Fax : 03-79551824 / 79606264
Toll Free Line : 1-800-88-1140
Website : www.mpc.gov.my

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Benchmarking Training Best Practices


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SME Corporation Malaysia


(SME Corp)

Halal Industry Development


Corporation (HDC)

Aras 20, West Wing, Menara MATRADE,


Jalan Khidmat Usaha, Off Jalan Duta,
50480 Kuala Lumpur,
Malaysia
General Line : 03 6207 6000
Fax Line : 03 6201 6564
Info Line : 1-300-88-1801
Email : info@smecorp.gov.my
Website: www.smecorp.gov.my

5.02, Level 5,
KPMG Tower, First Avenue,
Persiaran Bandar Utama,
47800 Petaling Jaya,
Selangor Darul Ehsan,
Malaysia.
Tel:+603 - 7965 5555
Fax:+603 - 7965 5500
Website: http://www.hdcglobal.com

Ministry of Science, Technology and


Innovation (MOSTI)

Kementerian Kemajuan Luar Bandar


dan Wilayah (KKLW)

National Biotechnology Division


Level 3 & 4, Block C4, Complex C,
Federal Government Administrative
Centre,
62662 Putrajaya, Malaysia
Tel : 03 - 8885 8000
Fax : 03 - 8881 0579
Email: info_biotek @mosti.gov.my
Website: http://www.biotek.gov.my

Bahagian Pengupayaan Ekonomi


Tingkat Bawah MIECC
Jalan Dulang, Mines Resort City
43300 Seri Kembangan, Selangor
Tel : 03-8947 3411 / 3458 / 3523 / 3528
Website : www.rurallink.gov.my
https://smu.rurallink.gov.my

Ministry of Tourism Malaysia


(MOTOUR)
Menara Dato Onn,
Putra World Trade Centre (PWTC),
45 Jalan Tun Ismail,
50480 Kuala Lumpur,
Wilayah Persekutuan, MALAYSIA.
Tel: 03-26937111
Fax: 03-26941146
Email: info@motour.gov.my
Website: http://www.motour.gov.my/en/

Benchmarking Training Best Practices


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Published by

HRDF
MALAYSIA

Pembangunan Sumber Manusia Berhad


Ministry of Human Resources
Malaysia