Mandiri Institute: Link and Match Key to Accelerating Labour Market Improvement
The quality of job creation must be increasingly supported by alignment between workforce competencies and business sector needs.
Jakarta (ANTARA) - Bank Mandiri’s economics team, through the Mandiri Institute, has assessed that the improving trend in Indonesia’s labour market needs to be accelerated through strengthening the alignment, or link and match, between education and industry needs in order to drive higher productivity. This approach is viewed as strategic in ensuring economic acceleration proceeds on an optimal human resource foundation.
Bank Mandiri Chief Economist Andry Asmoro, in a statement in Jakarta on Monday, underscored data showing Indonesia’s Open Unemployment Rate (TPT) has continued to decline to 4.85 per cent in August 2025, down 6 basis points compared with the same period the previous year. The proportion of informal workers also decreased to 57.8 per cent in 2025 from 58 per cent in 2024, reflecting improved employment opportunities and enhanced quality of the post-pandemic employment structure.
However, amid these improvements, the Mandiri Institute’s study noted that the labour market structure still has room for strengthening in terms of alignment between education levels and job types. Based on the data, mismatches occur when workers have higher education (overeducated) or lower education (undereducated/unqualified) than their positions require, which has the potential to constrain productivity optimisation and wage growth.
Andry Asmoro, commonly known as Asmo, observed that the decline in TPT and the reduction in the proportion of informal workers indicate that the labour market is moving in a healthier and more resilient direction. “However, to ensure this improvement is sustainable, the quality of job creation must be increasingly supported by alignment between workforce competencies and business sector needs,” he said.
Referring to analysis using data from the National Labour Force Survey (Sakernas) by the Central Statistics Agency (BPS), one in two workers in Indonesia experiences vertical mismatch. In 2025, the vertical mismatch rate stood at 50 per cent, improving from 51 per cent in 2023. The mismatch primarily stems from the undereducated/unqualified group, which accounts for 32 per cent of total workers, in line with the composition of the workforce educated to primary school level or below, which still stands at approximately 33 per cent.
By sector, the highest mismatch was recorded in the water supply and agriculture sectors. In the water supply sector, the mismatch was dominated by overeducated workers. Meanwhile, the mismatch in the agriculture sector was driven by a dominance of undereducated workers, reflecting the need for skills quality improvement. The government administration and financial services sectors, on the other hand, had a relatively larger proportion of overeducated workers, influenced by the appeal of stability and formal sector incentives.
According to Bank Mandiri’s economics team, these findings reinforce the urgency of strengthening the workforce placement ecosystem so that graduate competencies can be absorbed more optimally. Asmo emphasised that employment policy needs to move towards quality job creation through integrated synergy between education, industry, and government.
“Strengthening link and match, expanding upskilling and reskilling programmes based on sectoral needs, and sharpening interventions in priority regions will create sustainable advantages in the national labour market structure,” he said.
Looking ahead, Bank Mandiri’s economics team views the consolidation of data-driven policy and the strengthening of a collaborative ecosystem as key to accelerating labour productivity improvements. Through these measures, the improvements already achieved can be converted into more inclusive, competitive, and sustainable economic growth.