In Indonesia, large local conglomerates have dominated the job market as prime employers for years. Many of these large companies are family run, passed down through one or more generations. They are able to attract some of the top professionals around simply based on brand image and staying power. However, the business landscape is changing quickly and what has worked in the past to attract talent may shift as priorities for employees change and new companies enter the market.

As my specialty in recruitment is working with C-level leaders in local conglomerates, I have a particular interest in this area of the market. I had a discussion with two of Indonesia’s top executives: Steve Sudjatmiko, Chief Supporting Officer at Sababay Winery and Jeffrey Ng, CEO and Advisor of AMB Group, about some of the major issues facing local conglomerates seeking out the best talent today including: hiring trends, the need to adapt and modernise, and how they are attracting talent.

Hiring trend: increased demand for junior professionals

Indonesia has a young workforce that is expected to continue growing: until 2030, the working age population will continue to increase as a share of total population. As a result, many companies have seen an increase in the number of junior executives being hired and an increased demand overall for younger professionals in the workforce.

Junior talent is becoming increasingly attractive to these companies, as they bring a fresh breath of air and new perspective on changing business landscapes. As Ng explains, “The talent pool is getting younger, so we are seeing Millennials on the market being hired for junior positions. At mid-level, the younger talent has an edge when it comes to positions in IT and Digital Marketing.”

As to why this talent is attractive, Sudjatmiko says: “Younger candidates have newer experiences and a more open attitude. They also have more curiosity about new developments in the market, as compared to older and more traditional professionals.” These young professionals, especially if they have experience within startups, will have a greater advantage when looking for new roles. On the other hand, companies may have to adapt their criteria and expectations when it comes to age or seniority to fill open roles.

Modernising the business

With the rapid pace of change within Indonesia, it’s essential for family enterprises to modernise to keep up with the high success rate of start-ups, particularly those within the technology space.

In his role, Ng has noticed this shift towards modernisation in terms of changes in leadership in family –run companies. “We see the owners' sons and daughters are beginning to helm the business, for example in companies like Indorama, Ramayana Lippo Group and even Shangrila Hotels.  

We are seeing a younger generation with lots of fresh ideas. We are seeing Digital Transformation beginning to take root and family businesses are initiating digitalisation, attempting to future proof their enterprise.”

However, companies must be willing to commit the resources needed to truly succeed. As Sudjatmiko has seen: “This is a challenge for many of them. They develop a website and online business. However, for many of them, the online business is not a main business, it’s a side business "in case" the more traditional part of the business no longer develops. So very few are making the investments needed to allow the online business to take off.”

The role executives play in modernisation

Senior level executives can play a large role is ensuring this transition to more modern ways of doing business happens smoothly. In many cases, they are the bridge between the senior family generation and the younger one, responsible for mentoring the younger generation to understand the business and the psychology of the founder. Senior level executives are also tasked with developing business skill sets in the younger generations that are needed to optimise individual and business performance.

How to retain talent as more startups find success

Indonesia currently has four home-grown unicorn start-ups and expects to have five more by the end of 2019. The more established local conglomerates still have the upper hand when it comes to attracting top professionals, but as these numbers show, they are facing more competition from newer brands.

When asked about how companies should retain talent, these two executives acknowledged the growing need for companies to focus on retention, and noted that many companies offer high monetary rewards and good benefits in order to compete. Many of these new startups focus on extra benefits, and other companies must keep up.

Importance of branding within Indonesian conglomerates

One aspect that major local companies should focus on is employer branding. The way the company is perceived on the market can influence a professional’s decision to join one company over another. This importance is sometimes underestimated within the bigger companies, both because of confidence in existing employer branding and because by culture, Indonesian conglomerates are very modest, unwilling to come across as bragging. 

As Sudjatmiko says: “Employer branding is very important, but many conglomerates still feel that their name is big enough to attract talent on its own and don’t do much about company brands.”

This may be enough for now, but companies should remember to look long term at the link between retention and positive employer branding.

Changing with the times

Indonesian conglomerates are taking notes of the changes affecting the job market, and slowly adapting to the new way of hiring and retaining talent. As with any company, it’s essential to modernise, transform, and face potential challenges head on.

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