Restrictions on Outsourcing in 6 Sectors: The Impacts on Workers and Companies

JAKARTA, KOMPAS.com - The government has officially restricted outsourcing practices to only six types of jobs through Ministerial Regulation on Employment (Permenaker) Number 7 of 2026.

The policy, signed by the Minister of Manpower Yassierli on 30 April 2026, is assessed to have varied impacts on workers, companies, and the outsourcing service industry.

Senior Economist at Indef, Tauhid Ahmad, views this policy as having positive sides, particularly for the workforce, as it opens greater opportunities to obtain permanent employee status.

“I think the restriction on outsourced sectors does have its pluses and minuses,” said Tauhid Ahmad to Kompas.com on Sunday (3/5/2026).

According to Tauhid, this policy can also provide job certainty for contract or outsourcing employees, due to clearer time limits and opportunities for appointment as permanent employees.

However, on the other hand, this restriction could raise concerns in supporting sectors that have relied on outsourcing labour. He assesses that job opportunities in those sectors could narrow.

“Job opportunities in outsourcing could narrow. This certainly poses a challenge for outsourcing service provider companies because their market is now limited to only six sectors,” he explained.

Tauhid added that companies using outsourcing services must also make adjustments, particularly in terms of labour costs.

With increased opportunities for workers to become permanent employees, companies need to rethink wage structures, facilities, and career paths.

“Companies must rethink this because worker costs will increase. Wage mechanisms, facilities, and amenities must be prepared more thoroughly,” he said.

Meanwhile, for outsourcing provider companies, this policy is seen as tightening competition.

With a narrower market, business players are compelled to enhance the quality of services and workforce provided.

“With a limited market, competition will become even tighter. But this can also drive improvements in professionalism, such as standardisation and certification of the workforce,” Tauhid stated.

He also sees opportunities for specialisation among outsourcing companies, particularly in the six permitted sectors, such as security, cleaning, and operational support services.