64% of companies have reduced hiring targets amid crisis: Survey

As per a recent survey by Mekari, a human resource and financial solutions startup reveals that most Indonesian companies have either frozen or reduced hiring during the COVID-19 epidemic. While most businesses have been forced to downsize and have halted recruiting new staff, a recent survey has found that some companies are continuing to hire new employees as part of their strategy for faster recovery after the health crisis ends.

The data was collected from a total of 558 companies that were still recruiting before social distancing was implemented in early March. Of these, only 410 were still hiring between March 13 and April 13.

It also found that 64 percent of the surveyed companies had reduced their recruitment target from seven new hires per month to just two on average. The data showed that 25 percent of the surveyed companies continued to hire until the work from home (WFH) policy was issued, while 11 percent of the companies maintained the same recruitment rate before and after the WFH was implemented.

“There are still companies that are hiring employees, even though the numbers are not large,” Mekari vice president marketing Standie Nagadi said on Thursday. “This is one of the strategic steps the companies have taken so that when the pandemic ends, they can bounce back faster," he said.

Standie said that the survey data was aggregated and anonymous and that Mekari was not given access to clients' internal data to identify the business sectors that were still hiring during the epidemic.

“Technology will play an integral role in the post-pandemic 'new normal'. There is an increasing demand for technologies that can help companies implement working from home, [systems],” he said.

The hiring freeze and reduction have made it difficult for fresh university graduates to find jobs. Statistics Indonesia (BPS) shows that around 737,000 of the country’s 13 million university graduates were unemployed in August, 2019, or 5.67 percent. This is still higher than the country's overall unemployment rate of 5.28 percent during the same period.

The Manpower Ministry's data revealed that around 1.7 million formal and informal workers had lost their jobs by May 1. In the formal sector, 375,165 workers were categorized as Pemutusan Hubungan Kerja (PHK), or termination of employment, while more than 1 million workers were "pekerja dirumahkan" (on unpaid leave).

The Indonesian Chamber of Commerce and Industry (Kadin) presents a stark contrast, estimating that at least 6 million workers had lost their jobs due to the economic impacts of the COVID-19 epidemic.

Some startups have also reduced hiring and placed employees on unpaid leave to stay afloat during the outbreak. Others, like Airy Rooms, have permanently shuttered their businesses.

A separate survey by the Mobile Marketing Association (MMA) and SurveySensum found that 58 percent of Indonesian businesses had cut their recruitment budgets. The figure is slightly lower than the average 61 percent of businesses in India, Singapore and Vietnam that had imposed recruitment budget cuts.

The survey also showed that businesses in Singapore had taken the most aggressive approach to cutting recruitment budgets, followed by Indian and Indonesian businesses.

“Over time, there has been more pessimism as people worried about the security of their jobs, incomes and finances, which has resulted in consumers reducing their spending as well,” said SurveySensum CEO Rajiv Lamba.

Lamba also noted that 89 percent of transportation companies and 76 percent of financial services companies surveyed in the four countries said they had cut their hiring budgets.

Meanwhile, the e-commerce and the fast-moving consumer goods (FMCG) sectors had the lowest percentage of businesses reporting recruitment budget cuts, he said. The two sectors were only moderately affected and both have optimism that they can bounce back rapidly post COVID-19.

Reuters reported that FMCG manufacturer Unilever, whose products include personal care items like soap and shampoo, confirmed in April that it was hiring to fill 300 global jobs, but without elaborating further.

The International Labor Organization has warned that 1.6 billion workers, or nearly half of the global workforce, could lose their livelihoods, especially in the informal economy.