In a major boost for Malaysia’s workforce and fresh graduates, the Human Resources Development Fund (HRDF) will allow employers to utilize up to RM2 billion of the HRD levy starting September 2025 to directly hire Malaysian graduates.

This initiative aims to address employment challenges faced by fresh graduates while supporting employers in talent acquisition and development.

What is the HRD Levy and How Can Employers Use It?

The HRD levy is a mandatory contribution collected from employers under the Human Resources Development Act. Traditionally, this fund has been used to finance employee training and upskilling programs.

From September 2025, employers can now also use the levy to hire new Malaysian graduates, providing financial support to cover recruitment and onboarding costs. This is a significant expansion in the scope of HRDF usage, designed to encourage employers to invest in local talent.

Why This Matters for Employers

Hiring fresh graduates is often seen as a challenge due to the initial training and adaptation period required. With access to the HRD levy funds, employers can:

• Reduce the upfront costs associated with hiring and training new graduates

• Attract more local talent by offering structured development opportunities

• Bridge the gap between education and employment by supporting graduate readiness

This move aligns with Malaysia’s broader goals of boosting employment rates among graduates and reducing youth unemployment.

Benefits for Graduates

Fresh graduates stand to gain significantly from this initiative. It means:

• More job opportunities as employers are incentivised to hire local talent

• Better access to structured training and career development programs funded through HRDF

• Increased chances to gain valuable work experience in a competitive job market

What Employers Should Do

Employers interested in utilizing the HRD levy for hiring graduates should:

• Register with HRDF and ensure compliance with levy payment requirements

• Stay updated on the application process and guidelines from HRDF

• Plan recruitment drives targeting fresh graduates to maximize the fund utilization

Government Support and Outlook

This initiative is part of the government’s comprehensive strategy to strengthen the workforce and empower youth employment. By easing financial barriers for employers, it encourages active participation in graduate hiring and development.

Human Resources Minister Datuk Seri Saravanan Murugan has emphasized that this approach will create a win-win scenario for both employers and graduates, enhancing Malaysia’s human capital and economic competitiveness.

Final Thoughts

The opening up of RM2 billion from the HRD levy for graduate hiring is a game-changer in Malaysia’s employment landscape. For employers, it offers a practical way to invest in young talent while managing costs. For graduates, it represents hope and opportunity in an increasingly competitive job market.

Companies looking to grow their teams and contribute to Malaysia’s workforce development should explore how they can leverage this fund to attract and nurture fresh graduates.