Minister Yassierli Admits Outsourcing Has Run Rampant, Core Jobs Affected

Manpower Minister Yassierli has acknowledged that the practice of outsourcing in Indonesia has run rampant. The scheme, originally intended for specific types of work outside a company’s core competencies, has in practice expanded to include core business functions. According to Yassierli, outsourcing emerged as a corporate strategy to hand over certain types of work to other parties. The scheme was initially used when a company felt there were jobs outside its core competencies that would be more efficiently handled by another service provider. However, in its development, the practice has shifted too far. He highlighted that many companies are now using outsourcing for core jobs that should be handled directly by the company. Beyond the scope of work, Yassierli also highlighted the issue of unclear outsourcing contracts. He stated that this situation leads to problems with the wages received by workers, which can even fall below the proper rate. Another concern for the government is the lack of career clarity for outsourced workers. Yassierli noted that these workers often face job uncertainty because they have to move between service provider companies without any guarantee of career or income advancement. He described a scenario where an outsourced worker might work at one company for nearly two years, and upon reaching the contract limit, must move to another company, risking starting again from the minimum wage without job security. Therefore, Yassierli affirmed that the government’s current spirit is to limit the practice of outsourcing so it does not continue to spread. However, he stressed that these restrictions must be discussed and agreed upon through a tripartite mechanism involving the government, employers, and labour unions. He stated that the discussion regarding outsourcing restrictions is now one of the issues being talked about in the National Tripartite LKS forum. In this forum, the government sits together with representatives of employers and labour unions to find the most appropriate formulation. Despite this, the government is still facing dynamics in determining the model for restricting outsourcing. Yassierli mentioned that the main debate lies in whether the restrictions should be implemented directly or gradually.