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Indonesia – Talent shortage worsening by 2020

03 June 2013

By 2020, companies in Indonesia will face large gaps in entry-level and middle-manager jobs, as well as a lack of leadership skills among senior executives, according to a new report by the Boston Consulting Group.

Indonesia’s economy will likely break into the global top 15 in the next decade, but many companies will be left behind unless they tackle the nation’s looming talent shortage, the report warned. Indonesia already faces a shortage of middle managers, but by 2020, the gap between supply and demand could reach 56%.

The report expects top companies in Indonesia to fill about half of their entry-level jobs with fully qualified candidates in the coming years. At senior levels, more-modest shortages will emerge, but many of the candidates will lack the global exposure and leadership skills needed to succeed.

These talent shortages stem from the success of the Indonesian economy, the rapid growth of the services sector, and the weakness of the nation’s educational system to prepare students for careers. Of the college-age population, only 22% is enrolled in a school in Indonesia, a lower percentage than in Brazil, Russia, and China.

“While the talent picture looks bleak in the future, individual companies do not need to be defeated. By starting now to address these shortages, they can jump ahead of their less farsighted competitors,” said Dean Tong, a BCG partner.

The report argues that companies must address their talent and leadership challenges rather than rely on short-term fixes such as hiring from competitors.

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