‘Indonesia grapples with talent scarcity amidst rapid development’

The Indonesian market saw its gross domestic product (GDP) grow 5.17 percent in the July-September quarter and in the April-June quarter it witnessed the fastest pace since 2013. Recently, Airlangga Hartarto, Indonesia Industry Minister declared that Indonesia will be among the top 10 economies of the world by 2030. In an interaction with People Matters, Antonius Alexander Brian Handoko, Director HR, Samator Group reiterates the same, however, he also highlights the key talent challenge which exists amidst this rapid development. 

Indonesia has been repeatedly highlighted as a promising market in many reports and is among the top 20 economies in the world in terms of highest GDP. In this scenario, how does the job market look like? 

Many reports have highlighted that Indonesia will be dominated by the youth and working age group by the year 2030, giving Indonesia a demographic bonus. In fact, the pace at which the economy is improving, in 2045 at Indonesia’s 100th year of independence, it will become one of the world’s economic giant. However, to make most of the opportunity, the country has to be careful in facing the future. 

Currently, more than 70 percent of the workforce in Indonesia is only elementary school graduates and only less than 5 percent of the existing workforce has a bachelor degree and above. 

This is irrespective of the quality of university which still has not been nationally standardized. Hence, the quality of both the current and future workforce in Indonesia still remains a challenge. There exists a scarcity of qualified workforce in Indonesia. While the job market is already pacing with the high manpower needs, mainly at the managerial level and above, Indonesia is still facing scarcity of qualified workforce and with the growing needs, the situation can get worse.

As a result of this challenge, on one side, lack of right talent creates more and better opportunities for the qualified and skilled talent, on the other companies struggle to retain this talent. As a trend, therefore, companies are getting more creative with their talent practices to engage their employees. Lastly, the executive search business has also grown by a rate of 30-35 percent in the past 2 years.

How is Samator Group dealing with these challenges and making most of the available opportunities? Can you share some of your best practices?

Samator is also dealing with similar challenges and facing attrition since the past 2 years, with employee turnover going up to more than 15 percent. This attrition is high, mainly among the millennial generation. 

To overcome the situation we have implemented a Talent Pool program, that focusses on accelerating employees’ career based on competency and performance. 

Secondly, we also have a long-term incentive system as a retaining program in place.

What key HR skills are required to lead the change and how are you building those skills?

Being ‘Digital’, and not just with regards to technology but also in terms of building that mindset is the requirement for HR of the future. HR has moved beyond being just an administrative and people development function and HR professionals now are not only employee champions but they have a business role to fulfill.  To be able to build the digital mindset, the entire HR business process needs to be re-engineered and its link to the main business needs to be mapped. HR professionals have to now think business and streamline their processes for greater productivity and maximum efficiency. Only then will the HR be able to bring itself to move toward digital and work along with the business.

What will be the key focus area for HR in the coming year? What is the one talent practice that you would start and one that you would stop in your company?

The focus of HR in the coming years (short run) is to implement the regeneration program and talent development. This is to prepare both the talent and business to face the disruptive market and rapidly developing digital transformation.  

The talent practice that needs to start is providing a work environment that supports the millennial mindset (and people) and gives more “room” for innovation coupled with progressive career enhancement.

One practice that needs to stop is compromising quality and working for more quantitative output. Companies have to equip themselves to be able to groom high potentials to have bigger aspirations for themselves and business and then it should be able to provide them with enough opportunities to be able to achieve the same.