Tech Talent Shortage in Indonesia

This article is based on a Linkedin’s article wrote by our CEO, Ken Ratri Iswari on July 2019.

In Indonesia, the demand for tech talent continues outstripping supply and the talent pool is just not growing fast enough. There are more job openings than tech talent to support the rapid growth of startups and to support the government roadmap for making Indonesia 4.0. Indonesia is currently facing a shortage of tech talent that threatens the growth of its promising technology industry with the estimated economic impact of $ 21.8 Billion unrealized output (Korn Ferry: The Global Talent Crunch, 2018).

The World Bank estimates that between 2015 and 2030, there will be a shortage of 9 million skilled and semi-skilled ICT workers in Indonesia (WorldBank: Preparing ICT Skills for Digital Economy: Indonesia within the ASEAN context). On the other hand, by 2030, there will be a deficit of technology, media, and telecommunication (TMT) Talent of 600,000 – 1,2 million (Korn Ferry: The Global Talent Crunch, 2018).

APTIKOM (Indonesian Association of Higher Education in Informatics and Computing) stated that there are 40,000 – 50,000 graduates each year from 850 campus in informatics and computing. While higher education is barely producing enough qualified graduates to fulfill the demand, at GeekHunter, we estimate that only 20% of graduates aspire to be Software Developer. Meanwhile, Linkedin top 5 emerging jobs for Indonesia are all involving coding: Back End Developer, Android Developer, Full Stack Developer, Front End Developer, and Data Scientist. With this current pace, it is almost impossible to match the demand. Often the roles are vacant for more than a year.

This gap between supply and demand significantly increase the salary ranges of tech talent in Indonesia. In the last 3 years, the salary of tech talent in Indonesia has been increasing more than double and skyrocket for senior, managerial, and C-level position. Today, qualified tech talents have more choices than ever. The fierce talent competition not only drives fierce business costs but also cause a higher employee attrition rate. Even companies with deep pockets such as Gojek, Traveloka, Tokopedia, at the end decide to open R&D centers in India or in other countries.

There is a very simple reason behind the tech talent shortage phenomena: we were not ready. The popular adoption of technologies has outrageously outpaced economic infrastructure and resources. The digital economy is a new trend in Indonesia. It has just kick-started in the last few years thanks to ride-hailing, e-commerce, online travel agent and social media platform supported by affordable smartphones and data packages. Indonesia is experiencing a leapfrog in technologic development and everything you need is in your fingertip.

Secondly, the rapidly changing technology and talent market. Application Developer, Cloud Computing Specialist, Big Data Analyst/Data Scientist, and other tech jobs do not exist 10 years ago.
The industry is constantly changing and we aren’t keeping up. Currently, Indonesia higher education system has not upgraded the programs to include the technical skills needed to meet this demand. The skills gap is widening at an alarming rate for all technical roles. The school claims it’s their job to educate, not to train. The business is unwilling to develop tech talent internally through proper training and educational opportunities because most of the business is in the rapid growth and scale up fast. Therefore, business needs talent who are ready to go fast with the growth of the company.

Thirdly, even though companies had trouble in finding tech talent, not many of them are willing to invest in creating a talent pool and developing tech talent.

To address the issue, it is important to grow the tech talent ecosystem involving all stakeholders. Firstly, coding should be taught earlier and children should have an opportunity to get involved in coding. Coding initiation class should be available as a core curriculum or at least as an optional starting from primary school. The objective is to ignite awareness as early as possible. From coding, we can learn about problem-solving, logical and critical thinking. Secondly, all coding course and materials must be available and accessible for everyone in all walk of lives, not only centralized in big cities on Java islands so that everyone can learn it. Thirdly, the curriculum (for vocational school and higher education) needs to be agile and up-to-date with the rapid technological change to reduce the skills gap.

Fourth, building a public-private partnership. The Ministry of Communications and Informatics and five state universities in Indonesia have launched the “Digital Talent Scholarship”, which will be an intensive course to rapidly bring talent into the market. My company, Geekhunter, also one of the partners for this program and 100% support the initiative. Soon we will have additional 25K tech talent graduating from this program, we hope it can reduce the talent shortage (yes you can hire the graduates through one of our platform, Geekspace). Other organizations are also trying to amp up the talent market in Indonesia.

Fifth, create a policy to attract A level global talent just like the initiative that the USA, Canada, France, UK, Singapore, and other countries have done earlier. It can reduce the talent shortage and we can learn from A level global talent and get mentorship from them so that we can keep up with the skill gap and there will be an expertise transfer.

Last, would be running communication campaign to make these tech jobs more attractive to young Indonesian by showing how cool it is to be tech talent and the benefit of becoming tech talent such as the lucrative salary, impact to society, etc. This is to gives ideas that there are other roles or profession to aspire rather than becoming Youtuber, gamer or online influencer and promoting the tech talent profession itself.