Indonesian Talent Challenges

​The Indonesian economy is one of the fastest growing economies worldwide. Currently lying in the top 20, it is projected that the world’s fourth largest country in terms of population, will be propelled into the top 10 and beyond by 2030. In order to share in this explosive growth, most companies will need to focus heavily on attracting, developing and retaining the right talent, especially as they move towards a more services led economy.

To enable this growth it is predicted that they will need over 110 million skilled workers, which is almost double the existing number. This talent shortage applies across all levels, from entry level, where improvements in the Indonesian education system are required, to the top managerial positions.

This landscape makes the role of an HR leader critical, as there is an increasing need to be able to build capability in a more efficient way. HR leaders will be required to change from a more reactive standpoint to a more proactive approach, linking HR strategy to long-term business objectives. This is not a straight forward goal as a number of organisations still need to get the basics right before more progressive strategies can be realised. HR leaders need to be better equipped to drive a more advanced and strategic people strategy. This relates not only to their style and ability to influence senior leaders, but also to their domain knowledge – shaping and implementing the right talent and leadership programs and driving more strategic workforce planning.

However, as with other disciplines in Indonesia, there is a shortage of truly strategic HR leaders. The war for top HR talent provides an interesting microcosm of the wider macro market. Currently organisations are prone to a short-term approach, preferring to hire quickly, bringing in talent from competitor organisations. They are competing for a very small pool of top talent and are ultimately disappointed with the range of talent available and the results generated. This leads to high churn as HR professionals are continually offered better platforms in other organisations. Salaries become inflated and then it becomes a case of which organisation has the deepest pockets. What does stand out is when an HR leader has significant tenure and loyalty to their organisation. Often these individuals have been developed and rotated as ‘high potential talent’, perhaps into specialist regional roles, overseas assignments or even afforded opportunities in the business.

Therefore, as is the case in the wider business, the key is to spot high potential talent early and lock them in with an exciting career development plan and strong coaching and management development initiatives. Providing regional exposure and a variety of experiences can create a loyal and internationally minded HR leader who has a deep knowledge of the organisation. In turn they can develop their own successors. The other side of this long-term approach will be in the enhancement of the HR employer brand which will improve the chances of recruiting the next generation of top talent. If junior HR professionals can see a strong HR figurehead, they will be more engaged which will ultimately help retention, another issue magnified in Indonesia at the junior level.

So, these HR talent challenges not only reflect the wider landscape, but are equally critical. The right HR leader who can shape and drive the right talent and leadership initiatives across the organisation can ultimately have a positive and notable impact on that organisation’s success with a lasting legacy.