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Indonesia’s workforce in need of total overhaul

  • Victoria Fanggidae

Jakarta | Sat, September 3, 2016 | 10:06 am
Indonesia’s workforce in need of total overhaul Hundreds of workers in Batam, Riau Islands, demonstrate to reject new formula for raising wages. (Antara/MN Kanwa)

Improving productivity and competitiveness is at the heart of Nawacita, the nine-point development agenda of the Joko “Jokowi” Widodo government. However, while a strong focus on the economy, and infrastructure is evident, a lack of attention to improving workforce competitiveness is also apparent.

Its predecessors have left the current administration with a legacy of low human development indicators, which remains an enormous task to solve. The Organization for Economic Cooperation and Development (OECD) hit a raw nerve last June when it released a survey on adult skills, one of the most credible studies of this kind in the world, called the Programme for the International Assessment of Adult Competencies (PIAAC).

PIAAC is the ‘adult version’ of PISA (Programme for International Student Assessment). The Indonesian public might be familiar with PISA, a survey of students aged 15 years to assess their proficiency in literacy and numeracy skills — where Indonesia always hit the bottom rank. PIAAC assesses adults aged 16-65 years, the productive segment of the population.

It checks their proficiency level in areas such as literacy, numeracy and problem-solving capacity in technology-rich environments. This is the first time Indonesia voluntarily participated in the test.

Of 34 OECD member countries and key partners, Indonesia consistently fared worst in all PIAAC competency categories, across all age cohorts. For instance, the mean literacy score of Indonesian adults aged 25-65 with university education is lower than the average OECD countries’ adults aged 16-24, who are not even in education and only went to primary school.

In other words, our adults with university degrees are less competent in reading than OECD countries’ primary school graduates.

Our university graduates aged 25-65, our youth aged 20-24 without university degree, our youth aged 16-24 with high school degrees and those who are not in education or only have primary school education, scored the lowest in literacy from all 34 countries. Given those results, it appears that qualification is indeed not a good indicator of proficiency. We frequently hear about employers resenting their employees’ inability to follow simple instructions at the workplace, despite the employee’s shiny educational credentials. Concerns that more basic training and coaching are required for even the employees with good academic credentials are common among Indonesian employers and firms.

The PIAAC results are bad news for our workforce, and poorly-scoring university graduates are only a fraction of Indonesia’s total workforce. Currently, those with tertiary degrees only account for 13.7 percent of the total working population, which is still dominated by people who only graduated from primary school or below, who account for 43.5 percent or 52.4 million people (BPS, 2016) and whose competitiveness is equally poor.

To rub salt into the wounds, the fact that the PIAAC test was only taken in Jakarta, the center of Indonesian development, should scarce us more. Hypothetically, if a similar test were to be conducted in other, less-developed regions of Indonesia, the results would be unimaginably embarrassing.

The embarrassment is one thing, but the future is our real enemy.

The International Labour Organization ( 2015 ) projects that Indonesia’s high-skill employment will increase by 55.7 percent between 2010 and 2025 and that the largest absolute demand will be for medium-skilled employment. An analysis by Boston Consulting Group ( 2013 ) predicts that in 2020, Indonesia will suffer from a shortage of 17 million workers at the middle-management level.

Concomitantly, McKinsey Global Institute ( 2012 ) estimates that demand for semi-skilled and skilled workers will skyrocket to 113 million by 2030, which will put Indonesia at a disadvantage in global competition due to a lack of skills.

These projections make us nervous. When we combine the PISA and PIAAC results, we get a comprehensive picture of our current and future workforce. Both provide us with gloomy prospects. What can possibly be done to ease the problems?

Education is a long-term investment. The fact that the quality of our workforce in older cohorts is no worse than in younger cohorts indicates stagnancy, that the quality of our education has not get any better over decades.

In a broader sense, education is a lifelong process that begins with the qualification of children sent to schools. Formal education is not the only factor responsible for the poor competency of our workforce. If parents keep sending stunted, undernourished children to school, there is only so much that can be undone by teachers.

Unfortunately, one in three under-five-year-old Indonesian children is stunted, and the ratio of undernourished children keeps increasing (Riskesdas 2013). The health sector must work hard to improve these metrics.

An overhaul is badly needed for these two sectors if they are to relieve the headache of the employment sector. When translating the problems into policy — as a means of problem-solving, health, education and employment are inseparable. A concerted effort must ensure that the health sector provides sufficient means for parents to raise healthy children in a healthy environment, that the education sector educates students with high-quality teachers ans facilities and finally, that the employment sector trains employees to sharpen the skills they have received at school.

The current administration must ensure that its top officials in those aforementioned sectors work together under strong leaderships to secure Indonesia’s place in global competition. The latest Global Competitiveness Index shows that Indonesia lags behind and has even dropped, from rank 34 to 37 among 140 countries assessed.

The president as the conductor needs to ensure that sectors responsible for human development, such as health, education and employment, are led by the right people, and that they play the same song from the same music sheet. Keeping incompetent players for long will risk more embarrassment for the nation and sacrifice our current and future workforce.
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The writer is a social policy researcher at Perkumpulan Prakarsa (Center for Welfare Studies).

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