Asean Economic Community

AEC Wishlist: Time to upskill SMEs

A view of Malaysia's landmark Petronas Twin Towers in Kuala Lumpur.
A view of Malaysia's landmark Petronas Twin Towers in Kuala Lumpur. PHOTO: REUTERS

KUALA LUMPUR • The time is nigh to upgrade the skills of workers in the SME sectors. But first, governmental agencies, trade associations and SMEs must discuss how to make training programmes relevant and attractive.

The lack of skilled workers has been a longstanding problem faced by SMEs.

Under the government's National Agenda on Human Capital Development, 35 per cent of the total labour force would comprise skilled workers by 2020. Based on statistics last year, only 28 per cent or 3.86 million were skilled workers. In other words, the country will need to produce nearly 300,000 skilled workers every year in order to achieve this goal.

While SMEs contribute up to 65 per cent of total employment, most of the workers they employ are unskilled or semi-skilled.

There are several reasons why SMEs are not keen on upskilling programmes. Most of them operate with a limited number of staff, and their low profit margins make sending staff for training an additional cost for the business. The high turnover of staff is another disincentive. Lastly, many SMEs adopt low technology in production and the machinery they use is often outdated. The government and SMEs need to come up with solutions to overcome these factors that deter SMEs from signing up for training programmes.

THE STAR/ASIA NEWS NETWORK

A version of this article appeared in the print edition of The Straits Times on March 26, 2016, with the headline 'Time to upskill SMEs AECWishlist'. Print Edition | Subscribe