Sei sulla pagina 1di 22

RECRUITMENT MARKET REPORT

INDONESIA 2015

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


COMPANY OVERVIEW

Monroe Consulting Group is an international award-winning executive search company that delivers the
highest standards of professionalism to multinational and national companies in emerging economies
around the world. Originally conceived in Australia, the Group opened its first office in Thailand in 2002
and expanded rapidly. It now operates a network of branches throughout Asia and Latin America,
employing more than 100 professional consultants who are expert at recruiting in developing markets.

Monroes brand is based on the principles of honesty, integrity and customer satisfaction through its
commitment to excellence in executive search. The Company prides itself on its ability to recruit, develop
and retain the best and brightest talent in the recruitment industry. Each and every Monroe employee is
trained to specialise in providing end-to-end recruitment services for middle- to senior-level executives
within defined sectors.

Monroe Consulting Group provides a selection of recruitment services that can be tailored to the specific
requirements of its customers in a range of contexts. Clients can opt for either a database search or an
executive search (headhunting) recruitment service, both of which are offered on success-based fee
structures. It is Monroes ability to talent map, locate and recruit the finest candidates for its clients that
sets the Company apart from its competitors.

Indonesia Thailand Philippines


Gedung Sovereign Plaza, 16th Floor 209 K Tower, 23rd Floor, Tower B 2108 Trade and Financial Center
Jalan TB. Simatupang Kav. 36 Sukhumvit 21 (Asoke) Cnr. of 7th & 32nd Street
Cilandak Klongtoey Nua, Wattana BGC, Manila, 1634
Jakarta, 12430 Bangkok, 10110

E: indonesia@monroeconsulting.com E: info@monroeconsulting.co.th E: philippines@monroeconsulting.com

Malaysia China Chile


The Gardens North Tower 26F, Lippo Plaza Alcantara 200, piso 6
Mid Valley City No.222 Middle Huaihai Road Las Condes
Lingkaran Syed Putra Huangpu, Shanghai, 200021 Santiago
Kuala Lumpur, 59200

E: malaysia@monroeconsulting.com E: china@monroeconsulting.com E: chile@monroeconsulting.com

Mexico
Insurgentes Sur 1796 4to Piso
Col. Floridar
Mexico D.F, 01050

E: mexico@monroeconsulting.com

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


REPORT BACKGROUND

Indonesia experienced a slight slowdown in economic growth in 2014 to 5%, which was the fourth
consecutive year of GDP deceleration. However, both the Asian Development Bank (ADB) and World Bank
forecast that Indonesia will bounce back to 6% growth in the next two years, largely driven by domestic
consumption. Foreign direct investment (FDI) growth, however, remains sluggish, with the Investment
Coordinating Board (BKPM) admitting in mid-March that it had been forced to cancel US$23 billion worth
of foreign investment between 2007 and 2012 because of bureaucratic obstacles.

Given the positivity surrounding the political and economic situation in Indonesia, the recruitment market
remains highly competitive for companies seeking to employ skilled professionals. While Indonesia has
the worlds fourth largest available workforce of 117 million people, the general level of education is
below the level required to meet the demands of Indonesian employers.

The cause of the shortfall in availability can be directly attributed to the education challenges faced by
Indonesia. The current standards at the secondary and tertiary level are well below global standards.
According to the results of the 2012 Program for International Student Assessment (PISA), 15-year-olds in
Indonesia were rated 64th out of 65 countries in mathematics, science and reading.

Indonesian universities have also performed poorly in international university rankings. The Times Higher
Education did not list any Indonesian universities among its top 400 global universities or top 100 Asian
universities in 2014. The QS World Ranking listed the University of Indonesia (UI), Bandung Institute of
Technology (ITB) and Gadjah Mada University (UGM) in 310, 461 and 551 places in the world respectively.

Matters are made worse as the few people coming through Indonesias top universities or with degrees
gained overseas are not all moving into the corporate sector. Some of Indonesias best and brightest look
to secure work overseas and many more join family-owned businesses.

This report has been written to help employers and employees understand some of the key influencing
factors of the Indonesian recruitment market, specifically for managerial-level skilled professionals.

The Candidate Survey, involving 500 job candidates, was conducted via an online questionnaire and the
respondents were restricted to only managerial people who currently have a monthly salary of more than
US$1,500 per month. The Employer Survey was gathered from 50 multinational and national companies
operating in Indonesia and was restricted to only those people who were involved in the hiring process at
a Director level or within Human Resources.

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


CANDIDATE SURVEY
INDONESIA 2015

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


SURVEY DEMOGRAPHICS

Gender Industry Sector

Female
Industrial Technology
16%
30% 12%

Health
9%

Professional
Male Consumer
Services
84% Goods
24%
25%

Age Group Education Level

45 54 25 29 Diploma or
18% 2% below
2%
30 34
13% Graduation
/ Bachelor's
degree
62%
Post-
40 44
Graduation
32%
/ Master's
degree
35 39 36%
35%

Number of Years Work Experience Current Employer

16-20
28%
20+ Local
19% 36%

0-5
1%
11-15
41% 6-10
Multinational
11%
64%

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


Current Job Function

20%
17%
18%

16% 15%
14%
14% 13%
12% 12%
12%

10%
8% 7%
6%
6%
4%
2%
2% 1%
0%
0%

Current Career Level

60%

50%
50%

40%

29%
30%

20%
20%

10%
2%
0%
CEO Director Senior Manager Manager

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


COMPENSATION & BENEFITS
As companies attempt to attract and retain people, the income of Indonesian professionals has increased
at a higher rate than entry- and staff-level positions. Monroe has seen a higher number of professionals
earning between $3,000 and $5,000 per month (28%) compared to last year where 25% fell in to this
category. On the face of it this seems like an insignificant shift, but the Indonesian rupiah devalued by 20%
against the US dollar since the last survey and the increase is greater than these numbers suggest at first
sight.

Gross Monthly Basic Salary


30%
25%
20%
15%
10%
5%
0%

There was a noticeable reduction in salary increases given in 2014 when compared to 2013. The majority
of Indonesian professionals (46%) received between 6% and 10% salary increases last year, which is
comparable to 2013, where 49% received the same level of increase. The difference comes outside of this
band with 14% of Indonesian professionals not receiving any increase in salary, compared to the previous
year when less than 1% didnt receive an increase. There was also a reduction in the number of people
who received increases of between 11% and 15% where 36% of respondents in 2013 received this level
of increase, compared to just 17% in 2014.

2014 Increase Anticipated Basic Salary in 2015

26-30% >40% 0% 1-5% 1-5%


1% 1% 14% 17% 0-5% 8%
3%
Above 40% 6-10%
21-25% 1% 34%
4%
26-35%
16-20% 4%
3%
21-25%
8%
6-10%
11-15% 46%
16-20% 11-15%
17%
16% 27%

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


Although the salary increases received last year were less than the previous year, Indonesian professionals
remain positive with 30% of respondents expecting to receive more than a 20% salary increase and a
further 20% anticipating between 11% and 15% increases from their current employer.

COMPANY PERFORMANCE PAY 2015


25% 23%
20% 20%
20%

15%
10%
10% 8%
6% 6%
5% 4%
2%
1%
0%

Companies in Indonesia are offering a wide range of benefits with private medical insurance,
communication allowances and company car or car-ownership programs being the most common.
Surprisingly, given the traffic problems in most cities, a relatively low number of respondents (26%) had
access to flexible working hours, which is lower than other emerging Southeast Asian countries where
51% of respondents had access to flexible working hours.

BENEFITS FROM CURRENT EMPLOYER


100%
90% 86%
80%
70% 66% 66%
60% 52% 54%
50%
50%
40%
30% 26%
20% 12%
10%
0%

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


Employers are also offering increased annual leave. While the standard Indonesian offering is 12 days
annual leave, 26% of respondents indicated they enjoyed more than 16 days annual leave from their
current employers.

TOTAL ANNUAL HOLIDAYS


50% 44%
40%
29%
30%
20% 14%
10% 3% 5% 4%
2%
0%

CAREER ADVANCEMENT

Indonesian employers are promoting their skilled professionals at a more rapid rate that other emerging
Southeast Asian nations, with 31% of respondents having received a promotion within the previous 12
months. This compared to just 21% of respondents in other Southeast Asian countries.

Promoted by employer in the past 12 months Indonesian employers are promoting people
quickly because there are not enough people
with the right experience and skill sets to meet
Yes the current demands of the market. Companies
31%
are having to promote people on their potential
to grow in to the new position, rather than
waiting until they have developed the
experience and skills.
No
69% Another factor to consider why Indonesian
professionals are being promoted at a quicker
rate than their neighbours is that many
companies are using promotions as a tool to
retain the people they have already invested in.

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


Salary increase received when promoted While employees are enjoying career growth,
it is worth noting that the increases in
26-30% 31-35%
21-25% 10% 6%
26-40% compensation and benefits that come with
2% >40%
8% 4% these promotions are below that level that
Indonesian professionals could earn if they
0%
1%
switched positions with another employer.
1-5%
16-20% 6% Out the people who had received a promotion
20% in the past 12 months, 70% of respondents said
they had received a salary increase that was
below 20%. The highest number of
6-10%
respondents stated a salary increase of
11-15% 23% between 6 and 10 percent, which is in line with
20% annual salary increases most companies are
offering without promotion.

CONSIDERATIONS WHEN CHANGING EMPLOYERS


Fixed monthly salary is still the main consideration of professionals considering changing employers. Other
major influencing factors are the companys reputation, future career opportunities and the quality of the
management team.

9.00
7.58 7.87
8.00 7.24
7.00 6.31 6.41 6.49
5.35 5.63
6.00 5.01
4.97
5.00
4.00 3.12
3.00
2.00
1.00
0.00

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


When it comes to money, Indonesian Salary expectation when changing job
professionals set their sights high, with 41-50%
45% of respondents indicating an 51-60% 81-90%
10%
5% 1% 91-100%
expectation of a more than 30% increase
1%
in salaries when changing jobs. This is 31-40%
significantly above Thailand, Malaysia 26% >100%
2%
and the Philippines where 26% of
respondents indicated an expectation of 0 - 10%
6%
a more than 30% increase. The highest
number of Indonesian professionals
indicated an expectation of between
11-20%
21% and 30% increases, which is in line 19%
with what most companies are currently
21-30%
offering people to change employers. 30%

Companies seeking to secure the best


talent in the market should consider how they conduct the recruitment process with people being
interviewed. In order to create the most positive impact on Indonesian professionals, companies should
be highly transparent in sharing information on the company, the position, the challenges faced and the
results they are expecting from the person in the position. This is because 53% of respondents said that
this was most likely to create a positive impression of the company.

Companies should also be aware that the risk of creating a negative impression is evenly spread amongst
companies having a slow recruitment process (24%), a lack of transparency (24%), poor communication
(22%) and bad chemistry with the people conducting the interviews (21%).

Creates a positive impression Creates a negative impression

Transparency Bad Chemistry Lack of


Chemistry
53% 21% transparency
12%
24%

Communication
19%

Poor
communication
Environment 22%
4%
Slow process
Uncomfortable 24%
Speed
environment
12%
9%

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


Acceptance of a counter offer There is also a high risk of candidates accepting a
counteroffer from their current employers, with 29%
of respondents saying they had resigned from their
Yes employer, only to end up accepting a counteroffer.
29% The vast majority (67%) of successful counteroffers
came in the form of a promotion and more money.
Twenty-two percent said this was because they were
offered more money to stay.

Interestingly, only 8% of Indonesian professionals


accepted a counteroffer because of feelings of guilt,
No which is substantially lower the other emerging
71% Southeast Asian countries that showed 30% of
successful counteroffers were because of feelings of
guilt about leaving their company and colleagues.

Employers and employees considering the benefits of counteroffers should proceed with caution as 44%
of people who accepted a counteroffer left the company within the next 12 months, with 31% failing to
last just 6 months.

Reason for accepting Length of employment after accepting

Feel guilty
8% 0-6 months
> 2 years
36% 31%
Negative
Information
3%

More
money
offered 7-12
22% 19-24 months
Promotion and more months 13%
money offered 13-18
10%
67% months
10%

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


JOB MARKET INDICATORS

The skilled professional job market is still strong in Indonesia, although 2014 saw a slight slowdown in the
number of people changing employers. 2014 saw 21% of skilled professionals change employers in the
previous 12 months, which is down on the previous year which was 26%. This number is also below
significantly the below the neighbouring Southeast Asian markets of Malaysia, Philippines and Thailand,
where 30% of respondents had changed employers in the previous year.

LENGTH SERVED IN THE POSITION


35% 32%
30%
25%
25% 21%
20%
14%
15%
10% 8%
5%
0%
< 1 year 1-2 years 3-4 years 5-10 years > 10 years

Although there are early signs that the recruitment market has the potential to cool slightly, there is still
a shortage of skilled professionals available to meet the demands of companies in Indonesia. As an
indicator of how competitive the current job market is, 93% of respondents said that had been
approached and asked to consider a change of employment in the previous 6 months, with 34% of
professionals saying they had been called more than 5 times in the past 6 months.

HEADHUNTING CALLS GRAPH

70%
60%
60%
50%
40%
30% 21%
20%
10% 7% 7%
3% 3%
0%
None 1 5 times 5 10 times 10 15 times 15 20 times Over 20 times

With an abundance of jobs available for senior skilled professionals, companies must be proactive in the
way they recruit. 70% of respondents found their current positions by being headhunted by a professional
recruitment company, previous colleague or directly by the company itself.

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


80.0% Methods used to search for new job
70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%
Executive LinkedIn JobStreet JobsDB Personal Newspaper Monster Other CareerJet
Search Firm Contacts

Companies looking to tap into the passive candidate market would do well to partner with a professional
executive search company as 75% of respondents surveyed said they use headhunting companies to
search for new positions. In second place as methods to search for a new position was LinkedIn with 69%
of respondents having used it to search for a new job, which beat Indonesias two leading job boards
Jobstreet and JobsDB.

The competition to secure talent has seen a new trend developing where companies are extending
employees notice periods. In recent years there has been an increase in the number of employees who
are tied in to notice periods beyond the standard 1 month, with 16% of respondents indicating a 2 month
notice and 13% being on 3 months notice.

Current notice period Job market feeling


3 months Weak
Very Strong
13% 6%
14%

2 months
16% Moderate
33%

1 month
71% Strong
47%

Mid- to senior-level employees are aware their skills are in demand and remain very positive about the
availability of jobs, with 47% of respondents rating the current job market as strong and 14% saying they
rated the market as very strong.

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


EMPLOYER SURVEY
INDONESIA 2015

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


SURVEY DEMOGRAPHICS

Information from employers was collected by conducting the survey with senior Human Resources and
Director-level employees who are responsible for recruiting new employees.

Position Industry Company


Technology
Manager 16% Industrial
11% Local
HR 26%
42%
58%

Professional
Director, VP, Head of Dept. Consumer Goods Services Multinational
26% 26% 37% 58%

HIRING TRENDS
Although almost half the employers surveyed had increased their number of employees during 2014, the
level of growth did not meet anticipated levels. In last years survey, 30% of companies expected to
undergo significant increases in employee growth, when in fact just 19% of employers said they had
achieved that level during 2014. A similar trend can be seen for employers who anticipated a slight
increase in employee growth with the figures being 51% for anticipated and 39% for actual. Further signs
of cooling of the recent hiring volumes are also noticeable when comparing this same figure to 2013 actual
hiring activity where 27% achieved a level of significant employee growth.

Similar declines can be seen with the number of employers indicating a slight increase in employee
headcount with it dropping from 52% to 39%. An increased number of employers (26%) responded that
they had no change in headcount, which was up on the previous year which was only 8% of employers.

Although recent hiring may not have reached previous levels, employers still remain positive with 65%
predicting a slight increase and 12% a significant increase.

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


Overall the numbers being seen in Indonesian suggest the recruitment market is moving from an
overheated period to a more stable one as companies look to consolidate recent employee growth and
assess their employees performance and productivity before undergoing further growth.

Hiring Activity 2014 Estimated hiring activity 2015

Significant increase Significant Slight decrease


Significant
19% decrease 5%
increase
2% 12%
No change
Slight decrease 19%
14%

Slight
increase No change
39% 26%
Slight increase
64%

HIRING CHALLENGES
When asked to rank where employers felt they had the most success in finding new employees,
recruitment/headhunting companies came out as the best source for new employees followed by internal
referrals and Internet advertising. Recruitment companies ranking as the most effective method of finding
professional level employees show the growing influence of executive search companies in Indonesia, as
they ranked only 3rd in our 2014 survey.

Most effective method of hiring professionals


5.0
4.58
4.5
4.0 3.77
3.60
3.5 3.21
2.98 2.86
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Executive search Employee referrals Internet advertising Social media Corporate website Print advertising

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


The companies surveyed said that the more senior the position they were recruiting for, the greater the
challenges. By far the biggest shortage of available people is in the senior management category with 39%
of employers stating that they found this extremely challenging, 49% as very challenging and 12% as
slightly challenging to recruit at this level.

4.0
3.52
3.5 3.30

3.0

2.5 2.47

2.0
1.72
1.5

1.0

0.5

0.0
Senior Management Middle Management Staff Level Fresh Graduates

The difficulty involved in finding talent within specific job functions showed the biggest challenges are
faced when searching for Sales and Marketing professionals, with 23% saying they found it extremely
challenging and 47% as very challenging to recruit in this area. The second hardest function to recruit for
were for technical positions, followed by Human Resources.

4.0
3.53
3.5

2.98
3.0 2.83 2.79
2.64
2.5
2.21 2.12
2.0

1.5

1.0

0.5

0.0
Sales & Marketing Technical Human Resources Production Supply Chain Accounting Administration

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


HIRING CRITERIA
Companies assessing candidates in the recruitment process stated that displaying overconfidence or
arrogance was most likely to create a negative impression of the person being interviewed. This was
closely followed by candidates who were unable to provide clear answers to questions or had unrealistic
salary demands.

It is interesting to note the rise of arrogance and unrealistic salary demands as last year they ranked in
4th and 5th places respectively. The rise can be attributed to the building frustrations that many
employers in Indonesia feel with the financial demands and behaviours that can sometimes border on the
mercenary of many senior level people exploring new job opportunities.

Most likely to create a negative impression of a candidate

Over confidence / arrogance 7.33

Unable to provide clear, precise answers 6.74

Unrealistic salary demands 6.02

Candidate changes jobs regularly 5.93

Candidate hasnt prepared for the interview 5.33

Lack of confidence 5.30

Candidate late for interview 5.16

Delayed responses to email / SMS / Calls 4.51

Inappropriately dressed 4.35

Informal tone used 4.33

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


Companies overwhelmingly ranked integrity as the most desirable soft skill a candidate could display,
with a score of 6.35 out of 8. Leadership and demonstrating commitment also scored well with scores of
4.81 and 4.74 respectively.

6.00

5.00

4.00

3.00

2.00

1.00

0.00

As well as Integrity, employers also felt people who had gained knowledge outside of Indonesia were
desirable with 42% of respondents saying that they valued people with overseas education or experience
and were willing to pay a premium salary to hire people, and 40% indicating they valued it but were not
willing to pay a premium salary.

We do not see any additional value in people


with overseas education or experience
19% We value people with overseas
education or experience and are
willing to pay a premium salary
42%

We value people with overseas


education or experience but are not
willing to pay a premium salary
39%

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


COMPENSATION & BENEFITS
Most employers in Indonesia issued between 6% and 10% average salary increases to their employees in
2014 and a further 30% gave increases of between 11% and 15%. Although the figures remained fairly
consistent with last year, there was an increase in the number of employers who indicated they had given
an increase of more than 15%, with 16% percent of employers falling in to this category, compared to just
10% in the previous year. A similar trend is anticipated in 2015.

Actual increase 2014 Anticipated increase 2015

21% - 25% 26% - 30% 26% - 30%


21% - 25% No Increase
5% 2% 2%
16% - 20% 2% 7% 1% - 5%
9%
No Increase 12%
16% - 20%
5% 12%

1% - 5%
14%

11% - 15% 11% - 15%


30% 6% - 10% 26% 6% - 10%
35% 39%

In addition to annual salary increases, many employers are expanding their benefits in order to try and
help retain employees. Medical insurance and performance bonuses are becoming standard elements of
an employers benefits package. Growing in popularity are company cars and car ownership schemes with
72% of employers now offering this benefit, compared to 54% in the previous year.

Although employers are still being pressurized to increase salaries and offer a wide variety of other
benefits, employers in Indonesia are increasingly confident that they are seeing value for money as 79%
of respondents said they felt the salary expectations of skilled professionals was reasonable. This was a
substantial increase on the previous year where only 49% ranked expectations as reasonable.

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand


Benifits available to employees

Opinion on current salary demands


90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
Very low Somewhat low Reasonable Somewhat high Very High

Chile - China - Indonesia - Mexico - Malaysia - Philippines - Thailand