President Jokowi has previously expressed his satisfaction in the Government achieving unemployment level targets set in the 2015 – 2019 National Medium Term Development Plan (RPJMN). Indeed unemployment has shown a downward trend over the years to 5.01% per February 2019. However as in most cases, a single statistical data in itself will not adequately provide substantive conclusions, more so in such dynamic topics as the labour market and economic development. Taking a closer look at the components that make up the labour market, one can observe a glaring weakness in the composition of Indonesia’s workforce. Indonesia’s informal sector dominates the market in labour participation. According to Indonesia’s Statistics Bureau (Badan Pusat Statistik, BPS), more than half (57.27%) of Indonesia’s labour force are working in the informal sector, which is an indicator of underdevelopment.
Both are forms of employment and indicators of job availability. Where they differ is that formal sector jobs contribute more to Government revenue through taxes and implies higher value contribution to the economy due to the presence of administrative requirements. Contrast this to jobs in the informal sectors, which are essentially “ungoverned” so to speak.
From a worker’s perspective, Indonesia’s formal sector may not have been available or rewarding enough to beat the alternatives in the informal sector. Perhaps, working as an online transportation driver is a more lucrative occupation than a low paying office job with gruelling work hours for many of Indonesia’s working age. From an employer’s perspective however, some companies do find it a challenge to find and recruit skilled and competent employees, and are eventually mislead to believe that Indonesia does not possess a large talent pool. This is very far from the truth.
The services of a highly connected and experienced recruitment consultant therefore may prove useful for your company
