University Graduates Switch Gears After Graduation: The Tough Path for Degree Holders to Secure Formal Sector Jobs

JAKARTA, KOMPAS.com - The tight competition in the labour market is forcing many people to adapt, including university graduates (S1).

University graduates are compelled to switch to informal work to survive.

On one hand, higher education is still viewed as a pathway to decent employment.

However, on the other hand, the reality of the job market tells a different story.

Many graduates must adapt, seeking opportunities outside their fields of study, eventually entering the informal sector.

Labour observer Tadjuddin Noer explains that Indonesia’s employment structure is still dominated by the informal sector.

“Workers in the formal sector make up only 40 percent according to August 2025 labour force data, as the 2026 figures are not yet available. The informal sector accounts for 60 percent,” Noer said when contacted on Wednesday (15/4/2026).

According to him, this situation forces a large portion of the workforce, including university graduates, to seek opportunities outside the formal sector.

The limited absorption capacity of the formal sector is one of the main reasons why many graduates end up switching careers.

“Once again, especially for graduates, most jobs available in the formal sector are very limited, which is why the formal sector now absorbs only around 40 percent. The remaining 60 percent are in the informal sector and precarious work,” he explained.

In addition to the scarcity of job opportunities, another equally important issue is the mismatch between educational fields and labour market needs.

He gave an example that many current jobs require workers with technical skills, while university graduates are dominated by other fields.

“Many job opportunities are technical, while our graduates are in social fields, so they don’t match the job market,” he said.

“This causes graduates who don’t enter the job market to be forced to try their luck in the informal sector or precarious work,” he added.

Rather than being unemployed, many graduates end up creating their own opportunities or entering informal jobs like online motorcycle taxis.

“They work, for example, as ojol or Grab drivers. There’s nothing wrong with that because the income there is decent compared to being unemployed,” he said.

However, behind this, there is concern about the high unemployment rate, including among graduates.

“Yes, the unemployment rate for graduates is quite high now, above average at around 8 percent,” he said.

According to him, this situation is an irony, considering the large investment made in education.

“The government allocates 20 percent of the state revenue and grants budget to education. Then we educate them from high school to university, but they can’t find work,” he said.

Facing this situation, he emphasised the importance of flexibility in building a career.

Graduates cannot rely solely on their formal education field but also need to develop other relevant skills for the market.

“So, we shouldn’t only rely on our educational field but also add other soft skills,” he said.