An Empirical Study of HRD Corp's Strategic Role in Human Capital Development and Workforce Transformation in Sabah, Malaysia

This study examined the strategic role of HRD Corp in supporting human capital development and workforce transformation among HRD Corp-registered employer organizations based in Sabah, Malaysia. Although HRD Corp has been positioned as a key national human resource development institution in Malaysia, limited empirical evidence has explained how its strategic roles contribute to employer-level workforce outcomes. This is especially so within the contexts of a state characterized by geographical dispersion, sectoral diversity, and differences in organizational capacity. The objectives of the study were to determine the effect of HRD Corp’s strategic roles on human capital development, examine the effect of human capital development on workforce transformation, assess the direct effect of HRD Corp’s strategic roles on workforce transformation, and test the mediating role of human capital development. The study adopted a quantitative, explanatory, cross-sectional survey design. Data were collected from knowledgeable representatives of HRD Corp-registered employer organizations in Sabah and analyzed using the PLS-SEM. The findings showed that HRD Corp’s strategic roles had a positive and significant effect on human capital development, and human capital development had a positive and significant effect on workforce transformation. However, though the direct effect of HRD Corp’s strategic roles on workforce transformation was positive it was not statistically significant. Human capital development significantly mediated the relationship between HRD Corp’s strategic roles and workforce transformation. Supplementary findings further indicated that employer perceptions differed according to firm size, geographical location, HRD Corp participation levels, and sector. The conclusion of the study was that the strategic contribution of HRD Corp to workforce transformation was mainly indirect and operated through human capital development.