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Employee development presenting major challenge for HR leaders in Indonesia

A lack of skilled employees in Indonesia, both in HR and other organisational departments, is making HR functions more difficult and holding back the general economy. Sourcing employees who are experienced, skilled, talented  and motivated to continue their professional development is a challenge for many Indonesian companies, who are looking for a workforce that can grow from challenges and adapt to new situations. 

Bob Aubrey, Founder of the ASEAN Human Development Organisation, says: “The human development job that is needed in Indonesia, particularly for the next 10 years [is] … make or break. [There is] a very large young population, and if they don’t have a good education and jobs then [they are] going to miss the capacity to be able to go from, in economic terms, lower middle income to upper middle income.”

The issue has been acknowledged by Indonesia’s own Competent Indonesia National Movement committee, madrasas (Islamic educational institutions), and the organisation Standard National Working Competency Indonesia. These groups, and others, acknowledge that Indonesia’s levels of employee competencies are far below the ASEAN average. 

Indonesia’s competitive ranking has fallen in the 2022 World Competitiveness Rankings, measured by the Switzerland-based International Institute for Management Development, from 37th place in 2021 to 44th out of 63 countries. This is in part due to a mismatch between education and work. Records of the central statistics agency in Indonesia, BPS, show that more than 50% of Indonesian workers have only graduated elementary school. 

Indonesia’s Ministry of Manpower is addressing this HR challenge through the Skills Development Centre programme initiated in 2019, in coordination with the Ministry of National Development Planning. This programme specifically develops HR competencies, identifies industrial needs, and aids in placement of workers to reduce unemployment. Through the SDC programme, workers can independently learn soft skills such as teamwork, integrity, critical thinking, communication, and preparing for interviews. 

Organisations can also use the Competency Standards for Specialised Work or International Work, which have been developed and used by Indonesian enterprises to fulfil their own goals, as well as to more effectively collaborate with other organisations.

Heriyanto Agung Putra, Human Capital Executive of Bank Danamon and Chairman of the Indonesia HR Association, says: “In Indonesia, especially, more people are not really competent in how they manage HR. Usually, they don’t know what HR’s focus is on. The way they manage the human resources in their area, that is something that they [are not so comfortable with] when we [have a] project with them.”

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