Indonesia is a country with a rapidly developing economy, and it is no secret that attracting and retaining the right talent is important for continued growth. Given this crucial role, it is essential to examine the current state of human resources in Indonesia.
According to a recent report by global consulting firm PwC, Indonesia’s economic expansion and substantial labor force has brought a new focus to talent management. While the country is aware of the need to adapt to modern challenges, a majority of companies in the country still hold on to traditional HR practices.
Moreover, the report reveals that, while recruiting employees may be relatively simple, retaining them is a challenge. The primary reason for employees leaving their job is related to career development, lack of career advancement opportunities, or low salaries. Additionally, the report highlights another crucial issue: only a few companies have an effective strategy to attract and retain Young High-Potentials (YHP).
The situation is not entirely bleak, however. Indonesia’s HR landscape has some bright spots too. One significant highlight comes from HR leaders recognizing the value of digitalizing HR processes. As per the same PwC report, 23% of HR leaders in Asia plan to use HR analytics and big data to enhance their employees’ experience. Initiatives such as adopting digital HR tools and automating HR processes are gaining prominence in the country. The Bersin by Deloitte report mentions that HR leaders are keen to adopt new HR tech to make their work easier and provide a better employee experience.
Moreover, Indonesia’s HR industry can learn from its neighbors. As per Gartner’s TalentNeuron data, the cost of labor in Indonesia is lower than its neighbors, and Indonesia is less competitive in terms of talent availability. Hence, providing ample training and upskilling opportunities can help companies retain their workforce.
Indonesia’s HR industry faces considerable issues; however, it is clear that significant advantages can be realized through technology adoption and proper talent management strategies. By developing an HR strategy that is digitally savvy and people-centric, companies in Indonesia can retain their employees and remain competitive in the global marketplace.