As Indonesia undergoes a period of change and rising demands from the fast-growing middle classes, businesses are presented with huge growth opportunities. However, a dearth of suitable candidates looks set to drive high staff turnover and high salary inflation as skilled workers seek to capitalise on this candidate-driven market.  

According to the 2016 Michael Page South East Asia Salary & Employment Outlook, predicted salary increases for the next 12 months in Indonesia are the highest in the region, with 28% of respondents expecting increases of 11-15%, compared to just 3% predicting the same in Singapore and Malaysia. Indonesian employees are also far more likely to change jobs than their regional counterparts, with 50% moving for money and just 15% doing so to broaden their experience.

To combat this, Indonesian organisations are focusing on developing a strong company culture, with 50% of respondents stating this is a major motivating factor for employees in staying with an organisation or seeking new opportunities.

Indonesia is seeing growth in the engineering and manufacturing sectors due to the relatively low labour costs and increasing demand for infrastructure. This results in a need for talent with strong technical skills, while possessing excellent communication skills and having the experience of working in multinational companies are also highly valued.

Companies in Indonesia are under pressure to localise their workforce as much as possible, and this adds to the strain on the talent pool. 12 months ago, the priority for companies was recruitment, and that has now shifted to retention and counter offers to stem talent loss. 20% of employers say that they are struggling to find suitably qualified human resources professionals. This reflects the changing role of human resources as it has traditionally been viewed as an administrative function but has since moved as companies are now realising that non-financial benefits can improve staff retention, cut costs and retain skills.

The Michael Page South East Asia 2016 Salary & Employment Outlook is a report based on survey findings of more than 850 employers across a range of industry sectors in Singapore, Malaysia and Indonesia. Insights drawn from a series of roundtable discussions with employers further enriched the report. The report aims to provide an overview on market and employment conditions, wages, and an outlook across the different sectors. The report can be viewed in full here.

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