What Makes Job Searching Challenging Today?

Current Unemployment Rate in Indonesia

As of February 2025, the open unemployment rate in Indonesia stands at 4.76%. This statistic is derived from the Indonesian Employment Situation report published by the Central Statistics Agency (BPS). It’s worth noting that the unemployment rate had shown a declining trend from 2016 to 2020. However, the COVID-19 pandemic disrupted this trend, causing a spike in the unemployment rate to 6.26% in February 2021.

In the first quarter of 2025, the number of unemployed individuals rose slightly to 7.28 million from 7.20 million in 2024. Despite a decline in the unemployment rate percentage-wise, the actual number of individuals without jobs has seen a modest increase. According to forecasts by the International Monetary Fund (IMF), the unemployment rate may reach 5% by the end of 2025 and could rise further to 5.1% in 2026. This potential increase positions Indonesia with the highest unemployment rate among the ASEAN-5 nations.

Age Groups Facing Employment Challenges

Different age groups in Indonesia encounter varying difficulties in securing jobs. Notably, the 15-24 age bracket—representing new entrants into the job market—experiences the highest unemployment rate at 16.16%. This young demographic struggles primarily due to unreasonable job application requirements, such as stipulations for minimum work experience, and increasingly unlivable salary offers that often fall short of the minimum wage.

On the other hand, individuals over the age of 40 face unique obstacles as well. They often experience age discrimination, finding themselves overshadowed by younger applicants, even when they possess more professional experience. Employers may harbor concerns about the adaptability or agility of older candidates, which adds to the hurdles this demographic must overcome.

Why is Job Searching So Difficult?

Several factors influence the current employment landscape, primarily linked to both global and domestic economic pressures. Many companies express concerns over economic uncertainty, which has led to ongoing layoffs. Businesses that are expanding have also become more selective in their hiring processes, further complicating the job search for the populace.

Certain sectors, such as oil and natural gas, are witnessing stagnation, while others like manufacturing are experiencing significant struggles. Government administration roles and finance/insurance sectors have also seen a dip in labor absorption. Conversely, industries such as digital services, domestic trade, and green energy show growth potential but require skill sets that are not widely available in the current labor market.

Although national unemployment statistics indicate a decreasing rate, this is partly due to the rise in informal sector employment. Many individuals have taken on roles as online motorcycle taxi drivers, couriers, content creators, or online retailers, shadowing the official statistics.

Government Strategies to Mitigate Unemployment

In light of these challenges, the government has announced several measures to tackle unemployment. Minister of Manpower Yassierli has outlined three primary strategies:

1. Job Creation: This responsibility is shared among various technical ministries that the Ministry of Manpower will engage in discussions with to foster job growth. Key ministries involved include Agriculture and Industry, emphasizing a collaborative effort to stimulate job opportunities.

2. Job Training Programs: The government aims to implement job training initiatives that blend practical learning with hands-on experience, particularly in fields related to digital technology. Such programs are designed to equip job seekers with relevant skills for a rapidly evolving job market.

3. Entrepreneurship Development: There is a push to integrate entrepreneurship programs within higher education institutions. This initiative seeks to empower the young workforce with entrepreneurial skills, facilitating self-employment as a viable pathway into the labor market.

By addressing these core areas—job creation, skill development, and entrepreneurship—the government hopes to alleviate some of the pressures faced by job seekers across various demographics.