Apindo Warns Indonesian Employment Situation is in 'Yellow Light' Phase, Job Absorption Lags Behind

JAKARTA, KOMPAS.com - The Indonesian Employers Association (Apindo) assesses that the employment situation is in a “yellow light” phase. The imbalance between job creation and the number of new entrants into the workforce is the trigger.

Apindo’s Head of Employment Affairs, Bob Azam, stated that the pressure is continuously increasing. Each year, around 3.5 million people enter the job market, while workforce absorption is limited.

“Currently, our employment situation is in a position that, if I may say, is a yellow light,” Bob said during a Panja Meeting with the DPR Commission IX on Tuesday (14/4/2026).

Absorption depends on the type of investment. Labour-intensive sectors absorb more workers than capital-intensive ones.

“But if it’s not labour-intensive, but more capital-intensive, perhaps 200,000, maybe only 100,000. So if our growth is 5 percent and it’s all labour-intensive, only 2 million are absorbed. 1.5 million are not absorbed,” Bob explained.

This gap drives a shift to the informal sector. Currently, around 59 percent to more than 60 percent of the workforce is in the informal sector. Formal workers are only around 40 percent.

“Thus, the burden on workers entering the job market is very heavy, and if not absorbed, they will shift to the informal sector,” he clarified.

Worker productivity is also an issue. Education levels are still dominated by lower secondary. The training budget is deemed inadequate.

“Our training funds, we don’t even know now, perhaps less than Rp 1 trillion based on information from the Ministry of Manpower. It’s very far from the needs,” Bob added.