Coping with the issue of the low quality of human resources and unemployed youth should engage multi-sector partnerships, including the private sector.
Global economic trends, with IT development and automation, have become increasingly sophisticated, which means less dependent on human resources. Trade liberalization, AFTA and CAFTA, bring challenges to the business and investment climate in Indonesia. An essential element of business is human resources. Companies require quality human resources, which are not only technically competent, but also have appropriate attitudes and working ethos.
Indonesia’s Human Development Index scores 170 among 177 countries in the world. This position reveals that Indonesia’s quality of human resources is lagging behind other countries in the region, even those we consider less developed than Indonesia. We may argue about this fact, but this legitimate survey is based on averages of populations throughout the country (not just the urban areas).
With the coming ASEAN Open Economy later in the year, Indonesia seems very slow in preparing its human capital. The general population underestimates its potential implications, i.e. that Indonesia workers face tough competition against other ASEAN workers.
This situation is certainly worth a serious “wake up call” to all stakeholders that need resources: not only that we should care about the humanity of the workforce — it is a tangible business case. None of the business players would say they do not need qualified employees. Yet, Indonesia’s future businesses should grow from the small enterprises of today, which are built with strong human capital.
According to the National Development Planning Board (Bappenas), as of August 2015 almost 62 percent of total unemployment in Indonesia consists of young people aged 15 to 24. The total number of unemployed youth is 4.5 million, of which more than 3.4 million are seeking jobs.
Although this situation is improving, there are still real challenges for Indonesia’s people (particularly young people). Those challenges are: 1) lack of access to quality education; 2) lack of opportunities on school-to-work transition; 3) mismatch between the need for skills in industry and the skills possessed by existing resources; and 4) marginalized groups still exist in many parts of the country.
What are the answers to the challenges mentioned above? The government has pledged its medium-term planning for the creation of quality employment opportunities. Labor and workforce climate should be conducive for investment and production development. Young people must have good access to training and technical assistance on employability and entrepreneurship.
Furthermore, the quality of life of workers must also be improved, including living conditions and health. The government’s initiative to revitalize the Indonesia Youth Employment Network (IYEN) is indeed strategic yet encouraging. It provides a national platform to work together. The plan to expand the network to provinces or regencies is well planned.
Private sector
The private sector, as one of the three development players, can undertake a significant role together with the government and civil society in strengthening human capital in Indonesia. Companies should align their roles with government policy and strategy, in order to impact common goals significantly. Companies can join forces in human capital development in Indonesia through corporate social responsibility (CSR) initiatives.
Defined as a strategic way of sustaining business, CSR means balancing economic benefit (profit) with community welfare (people) and environmental protection based on ethical practices. Although the interpretation of CSR still varies among different sectors and stakeholder groups, it should not merely be translated as funds set aside from a proportion of corporate profit and poured as philanthropic contribution (charity) to communities.
From the companies’ perspectives, the creation of quality employees is not merely driven by a social mission, but it is a business imperative. Interviews with corporate human resource managers reveal that companies often find it difficult to recruit laborers because of a lack of capacity in the surrounding community. If they recruit a workforce from other parts of the country, it often triggers conflict with indigenous communities who demand jobs but lack the skills needed by the companies.
On the other hand, the companies need reliable employees who fulfill their criteria of being honest, responsible, committed, diligent and mature. This character set is not always widely built in the community. Whilst a number of people with this set of characteristics is much smaller than the companies’ required number, it is possible to be developed through a training and empowerment program.
Multi-sector partnerships
There have been a number of successful multi-sector partnerships involving human capital development that can be modeled, both in Indonesia and internationally. Indonesia Business Links (IBL) has been building partnership initiatives related to youth empowerment since 2003.
Corporate partners of IBL have together benefited more than 15,000 young people in getting job placements or becoming successful entrepreneurs. Beneficiaries include students at vocational high schools, university students and marginalized young people in villages. Other organizations are also doing similar programs in various areas of the country.
Companies that support the programs are leveraging various resources, not merely in cash, but also in terms of training, facilities, job placement and mobilization of volunteers. For example, companies that operate factories in Karawang provide free training on machines, stamping and welding. They also mobilize their senior employees as trainers or mentors for the new employees. Under various names, the programs consistently result in tangible as well as long term impacts to the leveraging companies.
Generally, the recruitment process in manufacturing industries is very tough, involving seven steps. Because of that, the IBL youth empowerment program conducts intensive job counseling, with recruitment test preparations such as in basic mathematics and logic and interview simulation.
Among all aspects of empowerment, the soft skills training resulted in the most significant improvement of attitudes of the young people. A set of 30 modules were delivered and the companies were impressed with the results. Some of the companies’ testimonies demonstrated that the companies were satisfied because the new employees performed better that those without any capacity-building.
The key learning gained from the community empowerment program is that to reduce unemployment there should be cooperation among all empowering parties, including companies, schools, local government, the youth participants themselves and their parents. Organizations that foster multi-sector partnerships, like IBL, must have adequate skills to facilitate and navigate the partners throughout the program and focus on the mission. Companies can join in the mission without starting everything from scratch, nor to be hassled with non-technical challenges in the field.
Companies can share good values, and make real contribution that also brings back good impact for business sustainability. CSR is not charity, it is a social investment that must create mutual benefits for all. Leveraging to a well-organized program is a good choice, although companies may implement it alone if they have sufficient funds. Size of funding does not guarantee results and impact, if it is not sustainable.
This article was taken from here.