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Gear Up! The Sun Will Come Out in 2023

08/02/2023Daya Dimensi Indonesia

The year has gone by with plenty of events that affect our daily life, workplace, and industry. It started with the never-ending effects of the COVID-19 pandemic, up to other surprising occurrences caused by a chain of reactions from one event. Ukraine’s invasion by Russia, fear of recession, and layoffs are some of the surprises we have witnessed this year. Therefore, this year has always been full of surprises. As the end of the year is getting closer, we begin to wonder how next year will go and ponder what to expect at the start of a new year. To anticipate and prepare ourselves to face the unpredictable future and expect the unexpected, let’s analyze past events and look ahead to the possibilities of 2023.

Expecting the unexpected has become a daring need for us in the working sector. Every now and then, some extraneous variable plays a part in impacting the industry, from the dreaded pandemic which started in 2020 to the fear of economic recession. The change workers and companies face after certain unexpected things might be a common commodity nowadays. The only problem that remains now is how are we (both employees and companies) going to prepare for the unexpected? The logical answer might be making predictions to generate intelligent decision-making through analyzing past events to anticipate the unpredictable future. Looking back at the past year, we can better prepare ourselves for what next year has under the sleeve.

The year 2022 has given us plenty of events that positively affect the workplace and the industry. Starting from the never-ending effects of the COVID-19 Pandemic, albeit this time with a better story. In terms of the unemployment rate, it dropped from 6.49 percent in last year’s third quarter to 5.86 percent by the start of the third quarter of the year 2022 (Badan Pusat Statistik, 2022). The growth is small, but it is still a progress of positive recovery nonetheless. A much similar positive recovery is also visible among Indonesian consumers. Bank Indonesia (2022) published a consumer survey result that indicates an increase in consumer confidence in Indonesia’s economy by October 2022. This index applies to all categories of the respondent: expenditure, age group, and even across the level of education.

Another positive growth that has been happening since the start of the pandemic is the ever-growing tech companies. Some people refer to this event as the “Tech Boom.” While many other companies suffered from the pandemic, many tech-based companies saw that as a massive opportunity instead. New York Times reported that big tech companies such as Amazon, Apple, Google, Microsoft, and Facebook had combined revenue of more than $1.2 trillion at the start of the pandemic (Ovide, 2021). They are growing fast, and tech companies in Indonesia have a similar trend. This growth spurt is supported by the fact that Indonesia’s internet users are increasing yearly (Negara & Meilasari-Sugiana, 2022).

There is also a steady increase by the year because Indonesia’s consumers are relying more on e-commerce, online media (such as Zoom, Netflix, Coursera, or Udemy), and online use for transport and food. A report by Google, Temasek, Bain & Company in early 2022 even suggested that Indonesia’s digital industry will significantly grow to US$ 77 Billion in 2022 (Negara & Meilasari Sugiana, 2022). The perfect momentum for a Tech Boom in Indonesia really does exist. Evidence can be seen from some of the tech companies themselves. Take GoTo for an example.

By the first quarter of 2022, it is reported that the group had 53 percent revenue growth which outpaced their 47 percent growth of gross transaction value (GoTo Report, 2022). It is visible that they have a strong performance entering 2022, be it from on-demand services, ecommerce, and financial technology services. And it also happens to other tech companies, although with differing scales in their growth. The main idea is 2022, supposedly a year where there’s continuous growth, not just in the tech industry but also in recovery for the work industry in general. Alas, new challenges are always keen on finding their way to give a little surprise.

2022 has never been short of surprises that will set a chain of reactions affecting the workplace industry. One of the first sparks of surprise came from the eastern part of Europe. By early 2022, Russia decided to invade Ukraine and officially started a military conflict between the two nations. Hence, this geopolitical conflict has disrupted the global supply chain, wherein prices of essential goods such as oil, natural gas, fertilizer, and grains began to soar in the aftermath. Predictions of high inflation came pouring in by spring from CFOs around Europe (Muschamp, Horton, Epstein, Sahu, & Carravilla, 2022). The situation is made even worse by the fact that consumer demand is still on the rise because of the recovery from the pandemic in most parts of the world. As a result, an inflation surge began to creep out not just in Europe but also globally. The IMF showed this economic concern by lowering the global growth projections for 2022 and 2023.

In the same position, the World Bank also decrease its global growth forecast from 4.1 percent to 3.2 percent in the wake of this conflict (Ellyatt, 2022). In the eyes of employees and companies, such high inflation is quite a red-alert situation. This alertness comes from the fact that wage inflation is not keeping up with the rising inflation in recent months. More than a fifth of UK workers struggle to afford the necessities they need (Spencer, 2022). This sets an example where typical workers now have less buying power today than one year ago as a result of it. A prolonged period of that state will actually slow the economy. And an economic downturn of that scale may bring about a particular fear that trembles the working industry.

The major challenge that manifested from a maelstrom of economic downturn for the working industry is economic recession. Yes, the fear of recession. The said recession itself has yet to arrive in 2022. Still, every corner that dwells in the working industry has started to bustle because it is coming. The impact is predicted to hurt the workforce for quite a while. KPMG’s survey of 1300 world CEO suggested that the recession will come by 2023. Around 70 percent of them also believed that companies’ earnings would be impacted by up to 10 percent and had already taken precautionary steps to mitigate it (Greenshields, 2022). Strategies such as layoffs, voluntary retirement, performance-based cuts, not replacing people who left the company, and hiring freezes have become the most viable to implement for most companies.

PwC’s Pulse Survey in 2022 also confirmed that about 42 percent of respondents, consisting of executives, are already planning to cut costs through headcount reductions, and even 26 percent of them also planning to reduce the number of full-time workers (PwC, 2022).

This challenge apparently also applies to the tech industry, which had a massive growth called the Tech Boom not long ago. Surprisingly even the big names have to lean out their company. As reported by a layoff tracker called, by the end of 2022, there are already more than 100.000 employees from approximately 900 tech companies across the globe experiencing a layoff (Lee, 2022). Among those layoffs, some of the big names included are Microsoft, Shopify, Twitter, Meta, Amazon, Cisco, and HP, with significant numbers of layoffs. Perhaps the most notable example is what happened to Meta and Amazon. It was reported that Amazon has had a layoff of around 10.000 staff.

Even more staggering, Meta reported a layoff of about 11.000 staff (Turner, 2022). This big turnaround started when the pandemic loomed largely and the tech boom surged, so Meta went on a hiring spree. It was reported that Meta hired more than 15.000 workers globally by the third quarter of 2022 (Tham, 2022). Now seen by many regarded as a miscalculation, Mark Zuckerberg himself also believes that inexorably losing 13 percent of its global workforce is a massive loss of a bet (Turner, 2022). The decision to gamble on pushing growth since the tech boom started did work well, but suddenly, it did not. Then again, these situations are the unexpected challenges that will come around for anyone in the working industry. No business opportunity or company growth is everlasting. As the tech boom ends, what is feared from the coming recession might already have begun.

With the global working industry sending ripples of unprecedented shocks, Indonesia’s working industry is being put to the test. So how does Indonesia fare in all the happenings? For starters, Indonesia started 2022 with a good mark. And it seems the trend will sustain until the end of the year. Cabinet Secretariat of the Republic of Indonesia (2022) posted that Indonesia’s economic inflation is relatively moderate compared to what is happening globally, according to Sri Mulyani, the Minister of Finance. She added that by October, the inflation rate was lower than the previous month at 5.71 percent. Even the Central Bank of Indonesia reported that by November, the rate would be at 5.42 percent (Bank Indonesia, 2022).

This shows that Indonesia’s been fortunate enough to have mild inflation. But the current state of Indonesia’s economy still can not stop the sheer force of instability from global trends. Like any other global tech companies, local tech companies are also forcing their hand to make their company lean in preparing for the worst if the recession does come to Indonesia.

Names such as Si Cepat, Link Aja, Tani Hub, JD.ID, Mami Kos, Shopee, and Zenius are among others that faced mass layoffs in 2022 (Nugraha, 2022). GoTo is another prime example because they have decided to lay off 12 percent of its workforce, which counts around 1.300 workers (Kaur, 2022). With such massive examples, this brings another repercussion to bear. Workers’ insecurity for a stable job might be triggered and emerge as an ongoing issue in the foreseeable future, much like elaborated in the previous volume of Asic Quarterly.

Although 2022 has been mixed of patches for the working industry in Indonesia, it goes without saying that both employees and local companies have prevailed. Sri Mulyani, the Republic of Indonesia’s Minister of Finance, even mentioned that with the current trajectory, Indonesia will be less likely to face a massive economic recession in 2023 (Singarimbun, 2022). Staying vigilant for more unexpected things might be crucial in making a positive start when entering 2023.

Looking ahead, the working industry of Indonesia in 2023 will likely be filled with many more unexpected things. Especially after what had happened through 2022. To start it off, Bank Indonesia (2022), in its press release, predicted that Indonesia will have 4.5 to 5.3 percent of economic growth. This bit of news ought to be the positive foundation for everyone involved in the working industry to build upon in the coming 2023.

Any form of self fulfilling prophecy recession scenario can be more avoidable with this approach. But then again, unexpected conditions might still alter some situations. Preparing for the unexpected is seemingly not enough. There will always be an element of surprise to it. For whatever unexpected variables may play out in 2023, upskilling is the minimum preparation that an employee can do. After such a massive layoff, companies will undoubtedly be more careful in hiring people. Add to the fact that skill readiness is vital because of rapid technological evolutions and implementations in businesses, quick changing skill demand in the employment market, and more prioritization from companies towards demand-relevance of skill towards job (ILO, 2022).

Rapid technological evolutions not only trigger a change in skill demand but also in learning opportunities, as digital transformation could provide new education and learning programs effectively because technological innovation and the workforce’s skill level go hand-in-hand (Li, 2022). Higher education programs and nontraditional training, such as professional certificates, re-certification, and self-study open-course programs, offer many opportunities for the workforce to upskill their capability.

Recently, various universities have created new education programs to assist the workforce in strengthening their skills. For example, many universities offer data science classes or even undergraduate and graduate programs as the demand for skilled data scientists, who are experienced in analyzing and utilizing data, grow exponentially. However, suppose the workforce is not interested in upskilling their capability through higher education programs.

In that case, they could use online programs, YouTube videos, or even self-train themselves through open-course programs. To further increase their competitiveness in the employment market, the workforce may earn certificates through exams offered by many professional institutions. Therefore, there are many ways for the workforce to upskill their capability in preparing themselves to answer the current demand of the employment market. With upskilling in the bag, you might be ready to face 2023. All that is left is to be smart and bold in taking opportunities and making decisions whilst welcoming 2023. (APA)

Read the last article by Daya Dimensi Indonesia here.

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