The ability to attract high quality people to your company is often the separator between companies who succeed big time and who fail in Indonesia. Despite population of 240 million, attracting the best players to work for you can be challenging.
In this article I will share market insights and Indosight’s own experience in headhunting mid and senior level managers.
Recruitment in Indonesia as a key challenge
Castle Asia conducted a study about biggest obstacles to daily operations and business growth in Indonesia. Here are the results:
As you can see from the table above, 8 out of 9 major challenges in growing a business in Indonesia are directly related to workforce. Finding management staff even beated inconsistent regulations as the biggest challenge.
Another employment study by Monroe Consulting Group found the following:
The conclusion is very obvious: Indonesia has a huge supply of unskilled and low skilled workforce and finding staff from those segments is easy. The challenge however is finding great people to the mid and senior level.
Let’s look more closely why getting top people is such as challenge in Indonesia.
Reasons behind lack of quality workforce
Education system is not competitive
According to Programme for International Student Assessment (PISA), Indonesian students rank among the worst in the world. Out of 74 countries ranked in 2009’s study, Indonesia ranked the following:
- Maths: 68th out of 74 countries
- Sciences: 66th
- Reading: 62nd
See full table here.
The challenge is not only the poor level of education, it is also the accessibility. According to World Bank statistics, net enrollment rate in secondary education is only 58%, leaving millions of Indonesians without proper education.
Family owned businesses
Indonesia is a very family-centered society and not surprisingly this results in family owned companies dominating the business scene. Naturally the children of the wealthy are the ones who receive best education and are prepared by their families to be able to run multimillion dollar businesses.
Hiring the members of those wealthy families is almost impossible – families make sure that their kids end up taking over their businesses.
Multinational companies take the rest of the top talent
Prestige is extremely important to Indonesians. Working for an employer that increases their social status is extremely desirable. Therefore multionational companies are attracting the best people available in the market.
How to attract quality managers
Indosight consultants have been in the recruitment business since 2006 and from 2011 we have been finding managers to Indosight’s clients. Here are our key lessons we have learned over the year about how to attract the best people:
1# Pay bigger salary than the market average
Often foreign investors expect to come to Indonesia and find extremely low salary levels. While it’s easy to find an assistant for 3 million Indonesian Rupiah (~320 USD) per month, if you want people with skills, responsibility and initative, you need to pay them much more.
The good news is that unless you are in oil and gas industry, the salaries are still significantly lower than in developed countries. Just not as low as you would expect.
2# Create prestigious working environment
As mentioned before, social status is extremely important to Indonesians, so think how your company can utilize that. Here are some ideas:
- Invest in renting office in a prestigious area – location matters a lot, especially in the bigger cities
- International exposure – show how the job roles give the person international interactions and opportunities
- Treat your current employees well – they will become your sales agents for attracting more talented people to work for you
3# Use your network not job portals
Indonesia has a lot of job portals, such as JobsDB and dozens of other. Most of them have thousands of job offers and seekers, which might give an impression that they are effective way to recruit new employees.
The challenge as a recruiter is that the supply and demand are out of place. For lower skilled jobs, there is an over-supply, and getting people is very easy. But people with high skills are not using job portals to find jobs. They get already targeted by so many companies directly that they can just choose for whom they want to work for.
Therefore while it may be worth to try the job portals, most probably you will find best people through your own and your local partners networks. What if you don’t have access to such networks? Then hire a headhunting firm with solid track record.