Learning and earning on the job 

EVERYBODY wants Malaysians to earn better wages.

While statutory minimum wage adjustments provide a necessary safety net, they cannot independently drive long-term prosperity.

Simply raising salary floors without raising the value created per worker is unsustainable for businesses – and inflationary for the economy.

Lasting wage growth requires productivity, and productivity requires a fundamental shift in how Malaysia approaches TVET, and why Malaysia must broaden its definition of Technical and Vocational Education and Training (TVET).

Whenever TVET is discussed, we instinctively picture fresh SPM graduates choosing between university and vocational institutes.

We debate enrollment targets and youth recruitment. While critical, these conversations overlook a far larger demographic: the millions of Malaysians already in the workforce.

According to the Statistics Department, Malaysia’s labour force reached 17.09 million in 2025, while unemployment fell to 3% – which is generally considered full employment by economists.

Our primary challenge is no longer merely job creation. Increasingly, it is matching existing workers with the evolving skills required by a high-tech economy.

The World Bank emphasised this in its recent report, “Raising the ceiling, raising the floor: The jobs agenda as a productivity agenda for Malaysia”, citing persistent skills gaps and poor alignment between training and market demand as key constraints on national growth.

Its recommendations were clear: expand lifelong learning and make skills development demand-driven through direct employer involvement.

The urgency is mounting. The World Economic Forum’s Future of Jobs Report 2025 estimates that 39% of core worker skills will be transformed or rendered obsolete by 2030, with nearly six in 10 workers requiring retraining.

Traditional institutional education struggles to keep up with this pace. Formal curricula require lengthy cycles of validation, accreditation, and review, whereas industrial needs shift rapidly.

Consider manufacturing: Electrical and electronics (E&E) products accounted for over 40% of Malaysia’s total exports, reaching a record value of RM647bil.

But today’s E&E factories look very different from those of a decade ago, relying heavily on sophisticated machine vision, advanced robotics, and AI-driven predictive quality control.

A technician trained just a few years ago is now operating systems barely mentioned in their original curriculum.

The same transformation is sweeping logistics, hospitality, and corporate services.

The conventional model of studying first and working later is rapidly becoming outdated.

What if the workplace itself became an active extension of the education system?

Malaysia has already laid the groundwork. The Academy in Factory (AiF) model pioneered in Penang proved that work-integrated learning delivers immediate, practical capabilities.

That framework has since evolved into the national Akademi Dalam Industri (ADI) initiative, structured as a strategic collaboration between government, industry, and academia.

While ADI’s current pathway focuses primarily on new job seekers – blending 70% to 80% on-the-job training with 20% to 30% targeted theory – an even greater opportunity lies in expanding this framework for incumbent workers.

Millions of working Malaysians already understand shop-floor operations, troubleshooting, and customer service.

Yet practical experience alone rarely converts into formal credentials, career advancement, or higher pay.

Expanding a work-integrated “place-and-train” pathway for existing staff allows workers to acquire recognised qualifications without taking a career break or giving up their salaries.

The wage implications are substantial. Statistic Malaysia’s Salaries and Wages Survey Report 2024 reveals a stark progression: low-skilled employees earned an average of RM2,128 monthly, semi-skilled workers earned RM2,604, while skilled employees commanded a mean salary of RM5,582.

While qualifications alone do not guarantee higher salaries, the overarching pattern is clear: higher-value skills unlock higher-value roles.

This is where skills policy must directly inform wage policy. Training should not merely award certificates; it must deliver measurable improvements in operational capability.

If wages rise faster than productivity, businesses face squeezed margins and lost competitiveness. Conversely, if productivity rises without workers sharing in those gains, economic growth fails to improve living standards.

The objective must be productivity-led wage growth.

Work-based learning offers a pragmatic solution. Instead of sending an experienced technician back into full-time education, we can connect existing frameworks like the Accreditation of Prior Experiential Learning to structured corporate training.

Under this model, a machine operator can systematically progress toward recognised technical certifications, a technician can advance toward a diploma, and senior staff can earn higher credentials while continuing to work.

Most importantly, employers become active co-creators of the curriculum, ensuring skills match immediate operational needs.

This does not diminish the role of universities or polytechnics; rather, it elevates them into essential partners within a broader lifelong learning ecosystem.

A RM10mil automated machine does not make a factory productive on its own – its ROI depends entirely on the personnel operating, maintaining, and optimising it.

Technology investments alone cannot propel Malaysia into a high-income economy.

To raise wages sustainably, businesses must become more productive, workers must become more skilled, and education must continue long after employment begins.

That should be the next frontier for ADI and Malaysian TVET: evolving from an entry-level pipeline for school leavers into a lifelong mobility engine for working Malaysians.

By enabling workers to continually learn and create greater value, we raise the floor for millions today – and raise the ceiling for Malaysia’s economic future.