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The New Reality of Workforce’s Skill and Knowledge

28/06/2022Daya Dimensi Indonesia

“Your workforce is your most valuable asset. The knowledge and skills they have represent the fuel that drives the engine of business and you can leverage that knowledge”

– Harvey Mackay, American Businessman and Author.

Indeed, there is no doubt that the workforce is an important asset for an organization, as every individual in the workforce possess a different skill- set and knowledge which help them distinguish themselves from others and also help distinguish an organization from their competitors. In Indonesia, the World Bank reported that there were approximately 124 million working youth and adults by 2018, where the employment rate had reached a two-decade record high, with 67.2 percent of youth and adults in the workforce, and the unemployment rate was at a two-decade low of 5.3 percent.

Unfortunately, due to the pandemic, the recent unemployment rate has risen significantly. According to the Central Statistics Agency (BPS), the number of unemployed people increased to 9.7 million, where the open unemployment rate increased to 7 percent, in August 2020. In the same year, BPS also found that the productive age group or those aged 15-64 years have experienced an increase to 70.72 percent. Thus, due to the rising number of productive aged people and the number of people who are looking for a job, current job competition has become more intense than before.

Even though the competition for employment has become tougher, the World Bank found that most workers in today’s workforce in Indonesia are not qualified to bear a middle-class job. A middle-class job tends to be an occupation that requires higher skill levels and strong cognitive, interpersonal, and digital skills, as well as extensive knowledge. Traditionally, higher education study has provided graduates with learning and research skills, which enables them to innovate and think independently, as well as construct informed judgement and arguments. However, economic pressures, intense competition and employers’ demands have pressured graduates to continually develop themselves (Heyler and Lee, 2014). Because of this, the youth in Indonesia, who are defined as persons in the 16-to-30-year age range by Indonesia Law on Youth of 2009, earn 32 percent less than adults, on average, because they only bear 6.4 percent of the middle-class jobs. This happens due to the fact that job experience has become a primary factor for accessing a middle-class job. Fortunately, youth and other job seekers can improve their chances in getting a job by developing field-specific skills, as well as broader cognitive and interpersonal skills, as the current workforce value skills immensely.

Nowadays, many employers put more interest towards the on-the-job experience of their job candidates. While employers still use academic background as a selection mechanism, which signals the job candidates’ discipline and drive, they think it is not that effective to only consider academic background as they expect the candidates to be ready in handling everything straight away when they get hired.

Some employers find that new hires did have the right technical know-how for the job, but they were not adequately prepared in written and oral communication, decision-making, and analytical and research skills from their academic education. To ensure that the new hires are skillful and thoroughly prepared, employers want their job candidates to have real-world experience. Because of this, students who are looking forward to getting a job after they graduate feel that they need internships and other work experiences during their time in college to be more appealing to the employers.

According to a survey by The Chronicles and American Public Media’s Marketplace, employers do agree that college graduates generally make better employees than those who finished only high school. Thus, many college graduates now are underemployed and holding jobs that require less than a bachelor’s degree. This may reflect the growing complexity of certain professions and the increasing demand for skilled employees by employers. More people in this day and age are “swerving to another lane” and look for jobs that could accommodate their skills. This is why many college graduates’ jobs are not aligned with their college major or even the degrees that they own.

During an event at a private university, Nadiem Makarim as the current Minister of Education, Culture, Research, and Technology stated that 80 percent of Indonesian university graduates do not work in accordance with their college majors or fields of knowledge. This shows that when looking for a job, fresh graduates do not only compete with graduates in their field of knowledge, but also compete with graduates in other fields. That is why, current job competition requires the workforce to master more than one discipline.

Many people in Indonesia experience job-education mismatch because they do not consider the development of the workforce or explore their passion and interest before they choose their college majors. They only start exploring their passion and interest during their college years because they get more freedom as a college student. Thus, the government tries to accommodate their exploration process with some initiatives, one of them is Kampus Merdeka.


Kampus Merdeka is a part of the Merdeka Learning initiative by the Ministry of Education, Culture, Research and Technology which provides opportunities for students to hone skills according to their talents and interests by going directly into the world of work as preparation for future careers, where college students are encouraged to participate in cross-campus and cross-departmental learning, conduct independent studies, undertake humanitarian projects, go on student exchange programs, and so on. Through this program, the government intends to develop human resources who master various scientific fields, are ready to collaborate across scientific disciplines, and are ready to solve complex problems.

As it has been pointed out, the job candidates develop themselves to become skillful and the government makes initiatives to accommodate the development process. Thus, what should organizations – as employers in this scenario – do? Organizations need to be adaptive as it is actually hard to predict exactly the skills that will be needed in the near future. To do this, they have to understand the skills that exist in the workforce now and the gaps to the skills that will be needed in the future.

Organizations, as employers, should also ensure that they do not only demand skills from their candidates, but also provide skills development tools. In a recent report, the World Bank noted that only 13 percent of Indonesia’s employers provide training to their workers, as compared to 32 percent in the East Asia and Pacific regions. And, when training is provided, it is primarily in firm-specific technologies rather than broader and more mobile skills. Thus, organizations should reconsider the programmes and policies that they already have to deliver better learning and development models for their hires to not waste their knowledge and skills. As Harvey Mackay said,

the workforce is a valuable asset as they drive an organization with their knowledge and skills. But it also needs to be noted that he also mentioned to leverage that knowledge as it can help drive the organizations better toward their goals.


Read the last article by Daya Dimensi Indonesia here.

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