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Businesses struggle to retain talent as pressure mounts to ditch arbitrary methods
Fostering a positive work environment, offering clear career paths and investing in training programs are crucial to boosting employee engagement and long-term retention, experts say.
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Office workers walk along Jakarta's Jl. Sudirman on May 30, 2024. (Antara/Muhammad Adimaja)
D
espite a vast labor force, local businesses continue to struggle with hiring and retaining top talent. As the government looks to prohibit arbitrary practices like withholding employees’ graduation certificates, companies must find better ways to navigate a labor market marred by low productivity and educational gaps.
Private-sector companies argue that a dynamic job market, where workers can easily switch jobs and employers quickly fill vacancies, is the ideal situation, but experts emphasize that fostering a positive work environment, offering clear career paths and investing in training are crucial to boosting employee engagement and long-term retention.
On May 5, Statistics Indonesia (BPS) reported that the country’s labor force has grown to 153.05 million, with 145.77 million people employed, full-time or part-time, marking a 2.52 percent increase year-on-year (yoy).
However, despite a slight dip in the unemployment rate from 4.82 percent to 4.76 percent, the number of unemployed individuals rose by 1.11 percent to 7.28 million.
According to a survey conducted from the Indonesian Employers Association (Apindo) published in Apindo’s Economic Roadmap 2024-2029, 30 percent of local companies struggle to find high-quality talent.
The challenge largely stems from the composition of the workforce, where 36.54 percent have no degree beyond elementary school, if any at all, while only 12.66 percent hold a university degree.
Furthermore, the country’s GDP per labor force member is just US$23,870, slightly below the Southeast Asian average of $24,270.
