Hiring in Indonesia: Guide and Trends in 2024

Published date: January 11, 2024

Looming uncertainties about global economic conditions have evoked a more cautious attitude among companies when it comes to spending, leading to slower recruitment processes in 2023. Eric Mary, Country Head at Robert Walters Indonesia, shares that this was particularly the case in the second half of the year even as Indonesia looks set to close out the year with some solid GDP growth.

“Multinational corporations were keen to maximise their profits in Indonesia to compensate for weaker showings in other countries. As a result, companies prioritized cost control, leading to a cautious approach in spending on hiring,” he elaborates.

However, certain industries continue to thrive, prompting a sustained demand for active recruitment processes. “For example, there were significant investments made into the downstream mining sector, which has uplifted the mining and electric vehicle ecosystems. Competition was tight when it came to attracting the best talent in those sectors, and it was the same for tech with the rise of technologies such as artificial intelligence (AI), machine learning and blockchain.”

Nevertheless, companies still braced themselves for a possible recession by implementing hiring freezes and layoffs. This trend presented itself most acutely in the tech industry, as well as in the fast-moving consumer goods (FMCG) sector as consumers had diminished purchasing power due to inflation. In turn, this has increased anxiety and uncertainty among the workforces. The earlier part of 2023 saw more requests for higher salaries and benefits to cope with rising costs of living, though these have tapered off as employees are concerned about job stability.

With the rise of digitalisation, workers have also had to upskill and reskill to stay competitive in the market. More companies have also responded accordingly to offer training programmes to help employees develop these digital skillsets.

However, some companies have also reverted to full-time work-from-office arrangements.

We’ve seen more employees leaving these companies as flexible work arrangements have become a must for them. These companies may also struggle to attract some talents as many candidates who want these benefits will write them off before even considering the job opening at hand.

Read on to find out more about Eric’s expectations for Indonesia’s labour market in 2024.

More emphasis on sustainability and CSR in hiring

In the year ahead, companies will put more stake into sustainability and corporate social responsibility (CSR) by emphasising these initiatives more in their hiring processes.

“Companies will start by communicating their commitment to sustainability and CSR in job descriptions, so potential candidates are aware of their position,” Eric notes. “They may also implement more inclusive hiring practices as part of efforts to promote diversity and inclusion. This will allow them to secure candidates from more diverse backgrounds and create a more equitable workforce.”

It is also anticipated that companies will implement or publicise training and development programmes around sustainability and CSR, with Eric explaining that such programmes help attract potential candidates that want to align their personal and career growth to the company’s sustainability goals.

Longer hiring processes, move back to office set to continue

The focus on diversity and inclusion is expected to continue moving into 2024, along with the increased use of technology in the recruitment process. There will also be a stronger need for companies to concentrate on their employer branding.

“Like in 2023, candidates will likely have to wrestle with prolonged hiring processes. Companies are more selective, and more people are now involved in the decision process,” points out Eric. “The move towards full-time work-from-office arrangements is also not merely a trend; we expect to see more companies revisiting and revoking flexible work arrangements.”

Within this hiring landscape, Eric also observes that hiring teams are also giving more weight to soft skills when assessing potential candidates. “Especially as the world of work becomes increasingly complex and interconnected, soft skills like communication, teamwork and problem-solving are now just as, or even more important than technical skills.”

Top hiring trends for 2024

As companies revisit their remote or flexible work arrangements, we can expect to see more employees resuming their morning commutes. There will be more companies resuming full-time work-from-office models like before the pandemic, and others landing on the middle ground of hybrid work.

Candidates will also be more rigorous about new opportunities they chance upon. Worried about a potential global recession and being displaced from their jobs by AI, they will assess how stable a given company is and whether the business can continue operating sustainably in the foreseeable future.

Eric also expects that heightened demand for talent in cybersecurity. This demand will not be limited to the tech and financial services industries, but also a wide range of other sectors like retail and FMCG.

Advice on talent attraction and retention

Talent attraction and retention has become more complex in recent years as candidates are no longer motivated by singular concerns such as a great salary and benefits. They now seek out jobs that offer a good work-life balance, opportunities for growth and development, a positive company culture, and the ability to make a real impact.

Companies who can address the range of concerns that existing and prospective employees have will succeed at retaining and attracting talent in the year ahead. This, Eric notes, can start from articulating the company’s vision. He advises, “Sell your story well. What do you want to achieve, and how can the potential hire contribute? Communicate this clearly and dynamically.”

Those efforts to communicate the company’s vision and positioning should be part of a larger employer branding strategy, as a strong employer brand creates a positive impression of the company and helps with attracting top talent. Initiatives that employers can undertake include developing a strong online presence, sharing employee stories, and participating in community events.

It is also crucial that hiring teams are responsive in the hiring process, following up promptly with candidates and keeping them updated on the status of their applications.

Lastly, companies should also think about ways to provide growth and development opportunities for their teams. “Employees want to feel like they are growing in their careers, and they will feel more engaged and loyal when they have opportunities, like training programmes or mentorships, that help them progress,” concludes Eric.