Creating the Allowable Cost Matrix: Simplifying HRD Levy Utilization for SMEs at Pembangunan Sumber Manusia Berhad

As an executive at Pembangunan Sumber Manusia Berhad (PSMB), I was entrusted with a crucial role in the SME Unit. This unit was designed to help small and medium enterprises (SMEs) registered with PSMB increase their utilization of the HRD Levy. At that time, the utilization rate among SMEs stood at a low 38%, and one of my main tasks was to find ways to improve it.

Understanding the Challenge

Part of my role involved visiting SMEs with low levy utilization to understand why they were not using the opportunities available. Throughout hundreds of visits, I uncovered a common issue: many employers were simply unaware of what they could claim from PSMB. Faced with confusion over the guidelines and claimable expenses, many opted to avoid the process altogether, leaving their levies unused.

This realization was eye-opening. It became clear that the low utilization rate was not necessarily due to a lack of interest in training but rather a lack of clarity and understanding. I knew that if we could provide employers with a simple and effective guide, we could empower them to fully utilize their levies and improve the skills development of their workforce.

A Deep Dive into the Rules

To tackle this issue, I thoroughly studied what employers could claim under the HRD Levy scheme. This involved carefully reviewing the regulations, understanding the eligible costs, and breaking down the specific requirements for each type of training. As I sifted through the information, I realized there were three distinct types of training programs for which claims could be made: in-house, public, and overseas.

Each category had its own set of rules, allowable expenses, and claimable amounts. The variation in eligibility between these categories often caused confusion for many employers. This complexity needed to be simplified.

The Birth of the Allowable Cost Matrix

With this newfound clarity, I began developing a practical tool that would help employers understand their claimable expenses. This led to the creation of the Allowable Cost Matrix, a clear, concise guide that outlined the different types of training and the specific costs that could be claimed for each.

• In-house Training: I detailed the allowable costs for internal training programs conducted within the company, such as trainer fees, materials, and venue expenses.

• Public Training: I provided clear guidelines on the claimable expenses for external training programs, including course fees, accommodation, etc.

• Overseas Training: I specified the rules for overseas programs, where travel and subsistence allowances played a key role in the claims process.

The matrix became a straightforward reference for employers, providing them with the information they needed to navigate the claims process confidently.

Implementation and Impact

Once the Allowable Cost Matrix was finalized and distributed to employers nationwide. The response was overwhelmingly positive. Employers now had a tool that demystified the claim process and allowed them to make informed decisions about their training investments. As a result, many SMEs (perhaps large mid-large employers, too) that had previously avoided making claims began to utilize their levies, increasing training activities.

The matrix also contributed to better communication between PSMB and SMEs. Employers felt more empowered and knowledgeable, and PSMB was able to provide more targeted support based on the specific training needs of different companies.

Reflections

Looking back, creating the Allowable Cost Matrix was a significant achievement for PSMB and me. It addressed a critical pain point for SMEs and directly impacted increasing HRD Levy utilization. Most importantly, it reinforced the importance of clear communication and user-friendly tools in helping businesses navigate complex processes.

The Allowable Cost Matrix reminds us that even in the face of complicated regulations, simplicity can be the key to unlocking greater potential.

Since its creation, the Allowable Cost Matrix has undergone many changes as the rules and regulations surrounding HRD Levy claims have evolved. As PSMB’s policies adapted to new industry requirements and government directives, the matrix was updated to reflect these changes. Despite the revisions, the core structure of the matrix remains, and it continues to serve as a vital tool for employers to make informed decisions about their training investments.

I take great pride in knowing that the Allowable Cost Matrix, which I first developed to address the needs of SMEs, is still being used today. It has stood the test of time, proving to be a valuable resource for countless organizations. Knowing that my contribution continues to have an impact fills me with a sense of accomplishment.