Tackling Youth Unemployment Issue in Indonesia

Youth unemployment is an emerging issue in the world.

Most of the countries face acute problem of providing jobs to the youths. The condition has worsen since the pandemic occured which also has limited most of human mobility and activities, resulting in the drastically decreasing economic activity across the country.

Businesses have become financially fragile and causes many people to be laid off from their jobs. This condition makes it more difficult for job seekers to finally land a job since companies couldn’t afford hiring new employees.

Youth unemployment could also bring about economic costs such as loss to GDP growth due to unutilized human resources. In 2020, International Labor Organization placed Indonesia’s youth unemployment rate as the second-highest in South East Asia, behind only Brunei Darussalam (Fig.1).

Fig.1 Unemployment, youth total (% of total labor force ages 15–24) — Data source: ILOSTA

Unemployment among higher education graduates

Although the number of college graduates in Indonesia is increasing every year, unemployment rates among young people with a higher level of education remain high and tend to increase further after the pandemic (Fig. 2).

This situation indicates that there are a large proportion of youth job seekers with higher education who have difficulties in finding jobs. In addition, the pandemic has drastically increased this struggle faced by global youth since 4 out of 10 youths were employed in the four sectors that would be severely affected by the global pandemic: wholesale and retail trade, manufacturing, real estate, and accommodation and food services sectors (Fig.3). Therefore, youth unemployment can be considered as one of the biggest issues in Indonesia.

Fig.2 Percentage of Unemployment Rate by Level of Schooling in Indonesia — Data source: BPS Indonesia

Fig.3 Global Estimates of Youth Employment sectors that were hit hard by COVID-19 — Source: ILO 2020

Furthermore, based on a Willis Towers Watson study on Talent Management and Rewards, eight out of ten companies in Indonesia have difficulty finding college graduates with the skills their companies need (Fig. 4). This indicates a lack of contact between school and industry, which means the relevant qualifications and skills needed by the industry are not learned by students in school.

Not only the hard skills, soft skills also play a very vital role for someone to start their career and professional journey. According to WE Forum 2020, critical thinking and analysis, complex problem-solving, and self-management skills such as active learning, resilience, stress tolerance, and flexibility are among the top soft skills and skills groups that global employers view as important in the run-up to 2025.

Fig.4 Most Important Hard Skills as chosen by recruiters and hiring managers — Data source: Zety

In the current digital era, university graduates are expected to have adequate digital skills and relevant hard skills for them to compete in the workforce (Fig. 4). Digital skills are must-have skills required in today’s growing industries in which there are a lot of businesses focusing on expanding their brands through online channels or digital platforms.

It is estimated that 90% of jobs will require that the person who performs them have relevant digital skills. There will be at least 1 million vacancies that the market will not be able to satisfy if graduates don’t have these skills.

Finding the solutions

To find solutions to youth unemployment, we should first understand the causes of youth unemployment. Research conducted by the Ministry of Manpower Republic of Indonesia collected data from general and vocational high school graduates.

The results revealed that the school graduates were facing three main difficulties when looking for work. These were: competition among job seekers (41.4 percent) unmatched education (16.6 percent), and limited skills (12.8 percent).

Indonesia lacks of approximately 600.000 digital talents per year. It means, there are so many roles being unable to be filled by Indonesian talents. In tackling this issue, the Ministry of Communication and Informatics has launched Digital Talent Scholarship aiming to equip youth with in-demand digital skills such as digital communication and entrepreneurship, artificial intelligence, machine learning, and so on.

Read : If I Am Not Certified, Can I Still Compete In The Workforce?

image source: Fauxels on Pexels

In conclusion, youth employment is a serious problem for all level of education graduates and seems to be getting worse since the pandemic hit all over the world. Several causes of youth unemployment have been identified and one of the crucial ones is the lack of skills possessed by the graduates. Having these constraints meant that young people needed to shortcut the system and look for other alternatives to learn/improve their skills in order to obtain employment.

Here’s why MyEduSolve’s vision is to transform Indonesia’s workforce through digital literacy with online learning and certifications. We believe everyone has the right and the opportunity to learn and improve themselves to pursue their dreams and futures.

If you’re someone willing to sharpen your skills or wanting to learn something new to compete in today’s highly competitive workforce, feel free to explore wide range of courses on www.myedusolvex.com or go to www.myedusolve.com for certification program available. We consistently strive to provide relevant education that matches industry demand to empower people so that they can execute and excel in what they are doing.

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This article is contributed by Muhamad Hadhari, Data Analyst intern at MyEduSolve.