IT has been slightly over 100 days since Steven Sim took on the mantle of Human Resources Minister but he hit the ground running since day one.
Shortly after his appointment, Sim made a series of announcements that would chart the course for the ministry under his leadership.
Among them, he said he wants to focus on strengthening the welfare of workers, improving skills, increasing the workforce’s overall productivity, and formulating a national human resources policy.
He has also imbued his interest in poetry in the renaming of the ministry’s abbreviation from KSM (Kementerian Sumber Manusia) to Kesuma, which means flower, as he believes it better encapsulates the ministry’s image and disposition, which is to achieve its 3K strategic mission – to empower the welfare, skills, and success of employees – “with heart”.
Since then, he has settled into his position with the help of the experienced team of civil servants at the ministry as well as his own team which followed him to his new ministry from the Finance Ministry.
Sim speaks about his first 100 days and his future aspirations for Kesuma with Sunday Star.
Setting the path: Sim says the initiatives announced in his first 100 days at the ministry are meant to chart the course of its future. — IZZRAFIQ ALIAS/The Star
> How has your experience in the two previous ministries prepared you for your current position?
My experience in the Youth and Sports Ministry and more recently in the Finance Ministry helped me understand how the civil service and government mechanisms operate. So that helped me to adapt more easily when I came to Kesuma last year.
The portfolio aspect of the Youth and Sports Ministry also prepared me to be more engaging with the grassroots, the people on the ground, and the youth, which is very useful for this ministry because this ministry is all about the workforce.
So that gives me perspective. How do you improve the livelihood of the workers? You can’t do that by pontificating from an airconditioned office, you can only do it when you interact and engage with them.
The Finance Ministry similarly gave me an understanding and overview of managing the economy and the financial sector, which also helps me to understand how we can improve the condition of workers.
For example, I always say you can’t just raise wages by fiat alone, by enacting a law that says everyone has to raise wages to a certain level. Yes, there must be some kind of government intervention, which is why we have the minimum wage legislation, but at the end of the day, we have to look at the structural economic problems.
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> You have said your three main focuses are the welfare of workers, improving skills, and increasing productivity. How do you think you have fared in these areas so far?
Just two days shy of the 100 days, I had a townhall with about 1,000 participants from different sectors – representatives from the workers, employers, NGOs of different kinds – and I presented some of the things that we have done in the past 100 days.
But I made it very clear that these are not achievements. Rather, the things we have done so far represent our direction for the future, what we want to do, and what can be expected of Kesuma in the days ahead.
I’ll give you an example of what we have done in the past 100 days.
We have launched several initiatives in Perkeso (the Social Security Organisation) such as improving the Housewives Social Security Scheme by broadening the age of eligibility from 55 to 60. We’ve also increased some of the benefits under this scheme.
One of the reasons for this is that we want to recognise the importance of the care economy in the larger picture of economic development in this country.
In terms of training, HRD Corp [Human Resources Development Corp] has signed a memorandum of understanding [MOU] with 13 top global training providers such as Google, Microsoft, LinkedIn, Alibaba and so on, and with this MOU, employers can now use the HRD Corp levy to pay for training via these platforms. Employers can also use up to 50% of their levy balance in HRD Corp to upgrade inhouse training infrastructure, including buying IT equipment and such.
Why are we doing all this? Because this year we want to go all out on training. We want to do training differently, radically.
There seems to be a gap between the aspirations of employers, who want to be more cost-competitive to have higher profitability, and the aspirations of workers, who want higher wages. Some people see it as a gap but I think this gap can be dealt with by increasing productivity, and we can increase productivity, especially through Kesuma, through upskilling and training.
We also talked about wages. I have already announced that we are going to review the minimum wage and we are also working with the Economy Ministry to implement – for the first time in Malaysia – a pilot stage of the Progressive Wage Policy some time in the middle of this year.
We talked about 10,000 mental health first aid carers in workplaces and 100,000 free health screenings for workers all over the country. I’ve also talked about the vision to have at least one Perkeso dialysis centre in every state.
This is a message that we want to ensure our workers’ health because we believe in a healthy workforce.
Then there is the Kesuma Practical Training Incentive. The first component is an old programme where employers who engage in the paid internship programme will be allowed double tax reduction.
Second is a RM30mil grant provided by Kesuma to assist, especially SMEs [small and medium-sized enterprises], in implementing paid internship programmes. We hope that with of this matching grant, smaller companies, especially local SMEs, can take the opportunity to implement paid and structured internships in their companies and therefore provide bigger internship opportunities for students all over the country.
And the third component is that we are now allowing up to 50% of HRD Corp levy balance to be used by a company to pay its interns.
We are saying that no one is too small. We want to protect and serve workers at every level.
So I can give you a list of a lot more events and announcements and initiatives that I have made, but I think what they all encapsulate is not just our achievements but set the direction for the next 100 days, 1,000 days, and the days ahead.
> Are all these initiatives part of the national human resources policy you want your ministry to come up with?
We started the research discussion of the policy way back in January. The framework of the national human resources policy will be announced in May.
To do this we have engaged with our stakeholders, with over 20 clusters in different sectors and held that townhall with 1,000 participants.
We have also launched a portal where we allow Malaysians to give input to the formation of the policy.
This is a sign of things to come – when we make policies and decisions, we will engage with our stakeholders.
But why do we want to do a national human resources policy? This is because I want the ministry to be guided by a properly-researched framework. We don’t just want to shoot into the dark. We want to be more structured in our thinking about policies. That’s number one.
Number two is that we saw there is a gap in existing documents, such as the Malaysian Plan and so on, in terms of human capital development.
For example, we talk about achieving a female labour force participation rate of up to 60%. What does it take? Or how do we deal with an ageing society issue? How do we prepare ourselves for innovations, revolutions in the job market, in technology, in artificial intelligence, in the green economy? We came up with the paid internship incentives, but what about a policy to guide internship programmes?
I think all these are missing in the current structure. Therefore, we felt that a comprehensive national human resources policy is due so that it can guide not only Kesuma but also the government as a whole and the job market to look at how we can manage our workforce up to 2030.
> Are you focusing on internships because we have a graduate underemployment problem?
Sure. I see internships as one of the components of skills training because internships are a very hands-on learning experience.
From our research, we have seen about a 35% conversion rate from being interned to being hired by the same company last year.
So yes, you are right, we see this as part of the larger training scheme and therefore, we wanted to provide bigger internship opportunities that are paid and structured.
We don’t want to waste the employers’ or the interns’ time. So we want to provide larger, better-paid and structured internship opportunities all over the country, not just focused as it is now in states on the West Coast, especially in the Klang Valley, Penang and Johor.
> A lot of these policies are voluntary. How can the ministry compel employers to take them on?
I think policymaking is always about the carrot and the stick. You can’t have one without the other.
For example, we talk about improving the female labour force participation rate, competitiveness and productivity. So within these 100 days, I have launched what we call the Wanita MyWira programme which is an initiative to assist women in transitioning back into the workforce.
I think sometimes you will need to incentivise, which is why we are taking the incentivising approach at this point.
> You spoke about the minimum wage being reviewed this year. Can you discuss any findings thus far?
I don’t want to speak before the National Wage Consultation Council [meeting within the first half of the year] but I think what we want to see here is a competitive wage structure, not only to ensure businesses can continue to survive, but also to ensure that Malaysian workers are compensated justly.
Improving wages is not just one component alone. We must also talk about improving productivity, upskilling, and upscaling on the part of our economy. So there is a whole package to it, which is why there is also the Progressive Wage Policy to complement and supplement the minimum wage policy.
In the past, we have seen that the minimum wage policy has helped those in, let’s say, the bottom decile, but as you progress towards the middle, there is what we call a suppressed middle. There are stagnant wages in the middle, and as it goes up, there is even a negative growth.
So minimum wage policies are not a solve-all panacea. It is an important component but eventually, you need to do other things as well. Kesuma is very well aware of this dynamic.
> There were reports that Malaysian wages are one of the lowest in the world. Will the Progressive Wage Policy help address that?
Malaysia is now experiencing what we call the middle- income trap. Our wages are stagnant. For example, in an agricultural economy like we had in the 1960s and 1970s, then the gross national income per capita was about US$380 [RM1,788 at today’s rates] per year.
But as we progressed towards mass production in the 1980s and 1990s, then you see the wages improved to about US$2,000 to US$4,000 [RM9,405 to RM18,810]. And then when you come into the 21st century with a more high-tech, high- value economy, our wages have now moved from about US$10,000 [RM47,025] to about US$11,000 [RM51,727] that you see in the last 10 years.
This is why the Prime Minister and the Madani government were working very hard to attract high-value, high-growth, high-tech sector investments last year. We are looking at about RM320bil, the highest amount in investments approved ever. That sort of investment can potentially generate up to 130,000 jobs.
I’m not saying you’ll be poor as a farmer. You can have a society of farmers but then you have to make them agrotech, high-tech farmers with high-value agriculture.
So there are different components to ensuring or building towards high wages.
Of course, one big elephant in the room is sometimes our wages are also suppressed because of our high dependency on foreign labour.
Foreign labour is needed but how do we manage and control foreign labour so that it does not affect the welfare, wages and job opportunities of locals and it does not suppress our economy?
We don’t want to be an economy that sells cheap and buys cheap.
I think it is a whole-of-government approach [to address this issue].
> On increasing productivity, countries such as Britain, Belgium and Germany have started implementing four-day working weeks which they’ve found increases employees’ motivation and does not affect productivity. Will a similar model work in Malaysia?
Last year we amended the Employment Act to reduce weekly working hours from 48 to 45. We also amended the Act to look at what we call the flexi-work arrangement.
Again, we have to look at the situation in Malaysia, the investment climate and the productivity.
We can quote other countries but I think we also have to admit there are cultural and productivity level differences, and differences in terms of the stages of our economy.
What we want to do is to encourage employers to provide more flexibility.
I think some employers have tried this post-Covid-19 and more and more people are open to this approach. So as we see more jobs with this approach, then perhaps we can have better insight and a grasp of how such arrangements – whether it is flexi-hours, fewer work hours, working from home arrangements – can impact the Malaysian job market and the economy.
With success stories from this experience, then perhaps we can have a better picture of how to formalise some sort of policy in the near future.
> There is also the rise of artificial intelligence (AI) which has people worried about its impacts on the workplace and their jobs. What are your thoughts on this?
I think many people do not understand AI, and this is why we have mandated TalentCorp as the think tank of Kesuma because we want to build internal intelligence capacity.
One of their first tasks is to produce a paper on the impact of AI, digitalisation and the green economy on the Malay-sian job market. The first phase of this paper will be completed in six months and then there will be a second phase in the next six months.
This paper will be important not only as a guide to the government and policymakers but also to employers and employees, for them to prepare themselves.
As new technology comes in, there will be jobs made obsolete but there will also be new opportunities and skills needed for the new jobs created.
Kesuma wants to ensure, together with our counterparts in the Education and Higher Education ministries, that Malaysians are ready to take part in the 21st century economy.
