Is Indonesia's talent crisis worsening?

Indonesia is facing a growing brain drain, as increasing numbers of skilled young professionals migrate abroad in search of better job opportunities and a higher quality of life. Amid a sluggish domestic labor market and rising pessimism among youth, this trend is raising serious concerns among economists and policymakers about the country’s long-term development.

Although the Indonesian economy continues to advance—with GDP expected to grow by over 5% in both 2024 and 2025—and the workforce projected to exceed 153 million by 2025, approximately 30% of companies report difficulty finding people with the right skills. This mismatch threatens to turn Indonesia’s demographic dividend into a demographic paradox, where the nation “ages before it gets rich.”

A key driver of the brain drain is Indonesia’s inability to absorb its growing skilled workforce. Formal employment opportunities are shrinking, even as the country faces one of Southeast Asia’s highest youth unemployment rates. In 2024, youth unemployment stood at 13.1%, according to the ILO; a June 2025 survey by Statistics Indonesia reported an even higher rate of 16.16%, more than triple the national average of 4.76%.

This creates fierce competition for jobs, with thousands of applicants often vying for a single position. A significant disconnect persists between the expectations of Generation Z and the skills demanded by the economy. Economist Telisa Aulia Falianty of the University of Indonesia notes that the country’s economic growth is not translating into sufficient job creation for young people, especially in the sectors they prefer.

Other contributing factors include job insecurity, widespread layoffs in 2025, corruption, and extortion—all of which undermine investor confidence. Skilled workers are increasingly drawn abroad by higher salaries, more modern work cultures, stronger labor protections, greater career development opportunities, and improved work-life balance.

Indonesia’s rigid and hierarchical work culture, limited support for innovation, and ongoing urban issues such as traffic congestion and pollution further encourage emigration. Over-reliance on academic credentials—rather than actual competencies—also perpetuates the mismatch. In some cases, companies have controversially withheld graduation certificates to prevent employees from leaving, prompting public backlash and government intervention.

Technology and science is particularly vulnerable to this skilled talent exodus, as software engineers, data scientists, and researchers are drawn to countries with robust innovation ecosystems. Engineering and infrastructure is similarly losing engineers to economies with large-scale, cutting-edge projects, and finance and banking professionals are heading for regional financial hubs like Singapore and Hong Kong where they can get greater international exposure.

In some sectors, people are leaving more because of push factors than pull factors. Healthcare for instance is seeing doctors and nurses seek better working conditions, especially pay and career advancement abroad. On the academia and research front, limited R&D funding drives academics to institutions overseas.

All this brain drain is a personal and national loss. For graduates unable to find adequate employment, it represents wasted potential and frustration. Although remittances from overseas Indonesian workers rose 13% to IDR 253 trillion (USD 20 billion) in 2024, labor expert Dr. Tadjuddin Noer Effendi warns that these financial gains cannot compensate for the long-term developmental costs of losing skilled talent.

The Indonesian government and business community have launched several initiatives to tackle the talent crisis, starting with better training and education that will help job seekers align with market needs. Over 3,300 vocational programs were launched in 2024 focusing on digital technology, renewable energy, and medical technology. Initiatives like the Digital Talent Scholarship and Digital Literacy Academy aim to train 9 million digital professionals by 2030. This includes global-level skill certification systems to ensure Indonesian workers can compete internationally.

Meanwhile, businesses are independently implementing clear promotion paths, mentoring programs, and leadership training to foster retention and engagement, hoping to hang onto talent. Some employers are also moving away from academic credentials to tap on underused groups of job seekers, substituting their own training programmes. Companies like Nestlé Indonesia, MedcoEnergi, Go-Jek, Tokopedia, and Traveloka are examples of firms investing in people, technology, and leadership pipelines. And collaborations such as the Panasonic–Bekasi partnership help to create talent pipelines that potentially retain skilled professionals.

On a broader front, an increasing investment in innovation could help local talent grow without leaving. Slow improvements in public infrastructure, even small steps to address congestion like the move for civil servants to start taking public transport, could gradually move the needle on people's willingness to remain.

Finally, one promising avenue is to actively engage the Indonesian diaspora. Many expatriates retain strong emotional and professional ties to Indonesia. By offering short-term consulting roles, advisory positions, and entrepreneurial partnerships, Indonesia can leverage global talent without requiring full repatriation.

With targeted policies, meaningful reforms in work culture, and urban modernization, the country can build a more attractive environment for its brightest minds.

Strategic investments in reskilling, healthcare, sustainability, and technology—paired with infrastructure development and inclusive growth—will ensure no region is left behind.