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Jakarta Post

Five plans to upskill Indonesia’s workforce

  • The Jakarta Post

    The Jakarta Post

Jakarta, Indonesia   /   Wed, May 4, 2016   /  12:00 am
Five plans to upskill Indonesia’s workforce According to Manpower Minister Hanif Dhakiri, the problem with those entering the labor market with only elementary and high school backgrounds is a mismatch between jobs and skills. (-/-)

With half of the population in the labor market, and almost 90 percent of them without tertiary training, enhancing the quality of Indonesia’s workforce is a challenge. The government has formulated five approaches to address this challenge.

Indonesia has a total workforce of 122 million people, of which 7.5 million are unemployed. Forty-two percent of the workforce are elementary school graduates, 26 percent are junior high school graduates and 22 percent are senior high school graduates. This leaves only 10 percent that have graduated from university.

The majority of elementary to high school graduates did not have many options as they were unable to consider higher education for financial reasons. Their options are jobs in the informal sector, such as becoming an ojek driver or a street vendor, or jumping directly into the labor market with a risk of getting stuck in a low-paid job.

Or, becoming unemployed.

According to Manpower Minister Hanif Dhakiri, the problem with those entering the labor market with only elementary and high school backgrounds is a mismatch between jobs and skills.

"An elementary and high school education is not enough. It must be complimented with [training at a] vocational training center [BLK]," he said in Jakarta on Thursday, adding that the government would revitalize the BLKs to meet with industry demands. Currently 30 percent of BLK participants are SMK graduates that have been accepted by a company but then sent to BLKs to update their skills.

For the unemployed, or those working in informal sectors, BLKs enable them to fit into the industry. For those stuck in low-paid jobs, they can gain additional skills by joining a BLK and try for a promotion, or leave their job and start their own business.

There are currently 279 BLKs in the country, which managed by the central government and regional administrations. However, based on the latest Manpower Ministry survey, there were only 52 well-operated BLKs, including 19 managed by the central government.

"These BLKs play pivotal roles in helping the work force win against ongoing competition. President Joko ‘Jokowi’ Widodo has implied two main points about BLKs; they should be focused and grow bigger," Hanif said.

Five plans

Therefore, the ministry will update BLKs with five plans in an attempt to give Indonesia’s workforce a major upgrade in a short timeframe. First, the programs will be made bigger. Those who are at school age should be in the school, and those who are at productive age must join in vocational training.

In the past, it was not easy for the workforce to find vocational training. Polytechnic schools only accepted senior high school graduates, while vocational high schools (SMK) only accepted junior high school graduates.

"Previously, BLKs required SMK graduation certificates. Thus, they failed to absorb the swelling number of elementary and junior high school graduates. Therefore, we have recently abolished the requirement of an SMK certificate," Hanif said.

Second, BLKs will be reoriented with priority being placed on sectors such as manufacturing and tourism. The training syllabus at BLKs will be based on the needs of prioritized, thriving industries.

Third, BLKs will be revitalized, not only by renewing equipment and buildings, but also by aligning programs with the latest educational theory.

"Fourth, BLKs will be rebranded. BLKs in fact have a generally good image, but if you ask people further about what BLK are like, they will think about monochrome TV sets, old motorcycles and outdated equipment and curriculums," Hanif explained.

To reshape this image, BLKs will be transformed into BLK-Pros, which do not only focus on creating experts such as mobile phone repairers, but also on smartphone production skills. The technology has been transferred here from Switzerland and Norway.

Fifth, the private sector parties will be asked to invest in the training centers and to jointly manage them, revitalizing the underperformed ones.

"There are some BLKs that have been revitalized, such as the one in Kupang, NTT [East Nusa Tenggara]. It was almost abandoned and really in bad shape, but then it started to be co-managed by Toyota Motors. They provides the equipment as well as the instructors," he said.

Sudamala Group, meanwhile, co-manages a BLK in Labuan Bajo, Komodo Island, to support their hotel there. Rather than bringing workers from Bali, which is costly and not sustainable, they chose to invest in the training center and develop the local workforce.

Several foreign investors have joined the program, such as a Dutch investor that co-manages BLKs in the maritime industry. Several of those, including in Serang, have been run in cooperation with a Swiss investor, and a BLK in Bekasi is managed by a Japanese investor.

Another form of cooperation with the private sector is in internships and apprenticeships, Hanif said, in cooperation with the Indonesian Chamber of Commerce and Industry (Kadin). In the initial stage, there will be 200,000 interns and apprentices sent to 2,000 companies.

Limited budget

Hanif underlined the importance of public-private partnerships to support his program, saying the state budget allocation for the BLK program nationwide was still small. “It is true that the government allocated 20 percent of the budget for education, but that is a raw number," he said.

In total, the allocation equals Rp 414 trillion (US$31.4 billion), of which Rp 250 trillion goes toward teacher salaries. The remaining Rp 150 trillion, Rp 140 trillion is divided between three ministries: the Culture and Education Ministry, the Religious Affairs Ministry and the Research, Technology and Higher Education Ministry.

Only Rp 10 trillion is allocated to equipment, facilities, program development, etc. However, Rp 9 trillion of that goes to 16 institutions for state-owned schools such as STAN and STSN. Only the remaining Rp 1 trillion is allocated to vocational training, or less than 0.1 percent of GDP.

"Developed countries on average allocate 0.5 to 0.6 percent of GDP to vocational training. OECD [Organization for Economic Cooperation and Development] members on average allocate 0.6 percent of GDP," Hanif said.

Therefore, public-private partnership is needed, he said. It is common practice internationally, such as in Scandinavian countries where the government provides 30 percent of total vocational training costs while the remaining 70 percent comes from private companies.

“Currently, the partnership between private and government is being discussed in Cabinet. We are waiting for technical reports,” Hanif explained.

As for the professional certificates, in a bid to guarantee the quality of BLK graduates, the government will employ the National Profession Certification Body (BNSP) to issue the certificates along with Profession Certification Bodies (LSPs).

The LSP will establish a competence testing center (TUK) to test the skills BLK trainees before they receive their certificates.

With these five strategies, Hanif is optimistic that Indonesia will be able to catch up with other ASEAN countries in terms of workforce quality. (ADV)

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