In response to mounting employment issues, Indonesia’s Ministry of Manpower has introduced a multi-faceted plan designed to transform the country’s labour ecosystem. These efforts aim to reduce informal employment, empower young people, and prepare the nation’s workforce for the demands of a digital economy and a green transformation.
Confronting Informal Employment and Youth Unemployment
Indonesia has a large population, with over half of its population under the age of 35. Young people in Indonesia are constantly seeking employment but are currently unemployed. Indonesia has a high unemployment rate compared to its neighbours, such as Thailand and Vietnam. A mismatch of skills is considered the leading cause of high youth unemployment.
Indonesia’s workforce is actually facing a dual challenge: a high proportion of informal workers and significant youth unemployment. According to the ministry, over 59% of the 153 million-strong labour force is engaged in informal work. These workers often lack access to social security, legal protection, or a stable income.
Indonesia’s youth also face difficulties entering the formal job market due to limited access to relevant skills and practical training. Many young people are left unprepared for the evolving needs of industries driven by technology, automation, and sustainability. Students who avoid informal jobs and low-paid jobs and who choose to wait for suitable jobs struggle with unemployment.
Expansion of National Training and Internship Programs
To close the skills gap, Indonesia is expanding its National Internship Programme and upgrading its vocational training infrastructure. The approach centres around project-based and blended learning, which combines:
- Technical skill development
- Soft skills (communication, teamwork)
- Foreign language training
- Entrepreneurial education
Training is delivered through a network of over 2,700 institutions, including:
- 303 government-run Job Training Centers (BLKs)
- 2,400+ accredited private training providers
The Ministry of Manpower is also enhancing its competency certification system to ensure workers are recognised for their skills and can compete in both domestic and international job markets.
Enhancing Job Market Transparency with Digital Portals
The Ministry is scaling up its digital platform SIAPkerja, a one-stop portal that connects job seekers with:
- Job vacancies
- Skills development programs
- Certification opportunities
- Personalized job-matching services
This platform plays a crucial role in helping job seekers, especially those in remote or underserved areas, access employment opportunities and build verified professional profiles. It also helps employers find skilled candidates more quickly, creating a more agile labour ecosystem.
Improving Productivity and Sector-Specific Capacity Building
The Ministry of Manpower is collaborating with the National Productivity Institute and other partners to drive productivity improvements across sectors. Key initiatives include:
- On-site workforce training programs
- Establishment of Productivity Zones in industrial regions
- Customised company-level interventions
- Promoting the adoption of smart technologies in manufacturing and logistics
These measures aim to boost efficiency while maintaining employment levels, ensuring that productivity gains do not come at the cost of jobs.
Building Collaborative Partnerships Across Sectors
Recognising the need for a joint effort, the Ministry of Manpower is forming partnerships with:
- Other government ministries
- Private companies
- Labor unions
- Educational institutions
- International bodies like the International Labour Organisation (ILO)
Together, these stakeholders are co-developing labour policies that balance worker protection, job creation, and competitiveness. The goal is to build an inclusive, adaptable, and future-ready workforce
Supporting the Green Economy and Future Skills
With the global shift toward sustainability, Indonesia is prioritizing green jobs by offering training in:
- Renewable energy
- Eco-tourism
- Sustainable agriculture
- Waste management and recycling
At the same time, the Ministry of Manpower is promoting digital literacy and future skills, such as coding, data analysis, and digital marketing. These efforts are particularly targeted at rural communities and marginalised groups to ensure that no one is left behind in the transition to a tech-driven economy.
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Conclusion
Indonesia’s workforce reforms mark a pivotal step toward building a stronger, more inclusive, and future-proof labour market. By investing in skills development, improving access to employment data, and embracing sustainability and digital transformation, the Ministry of Manpower is laying the groundwork for long-term economic resilience and social progress.
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Frequently Asked Questions
The reform aims to reduce informal employment, lower youth unemployment, and prepare the workforce for the digital and green economy sectors.
SIAPkerja is a government-run digital platform that connects job seekers with job vacancies, training programs, and certification opportunities.
Youth, informal workers, and job seekers across Indonesia, especially those in underserved or rural areas, can benefit from these government-supported programs.
Yes. The certifications are based on Indonesia’s national and ASEAN competency standards and are issued by official bodies, such as BNSP and LSPs.
Key sectors include digital technology, manufacturing, logistics, renewable energy, eco-tourism, and sustainable agriculture.
Abigail Yu
Author
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
