Jakarta (ANTARA) – Indonesia is strengthening a skills-based labor market to better align workforce competencies with rapidly evolving industry demands, Manpower Minister Yassierli said in Jakarta on Wednesday.
The policy aims to address the widening gap between workers’ skills and employers’ needs as businesses face growing difficulty in recruiting qualified talent.
“The labor market today is looking for skills, and I believe a skills-first approach is one of the keys to ensuring we remain competitive,” Yassierli said in a statement.
He said industry requirements are evolving faster than the labor market can supply workers with relevant competencies, creating persistent recruitment challenges for companies.
According to the minister, more than 80 percent of companies worldwide still struggle to find workers with the skills required by industry.
At the same time, around 36 percent of workers experience a skills mismatch, meaning their competencies do not align with the requirements of their jobs.
“The reality on the ground shows that formal education and academic qualifications on paper are no longer absolute guarantees of a person’s actual competence,” he said.
To address the challenge, the government is shifting from a conventional labor market model to a skills-based approach that places competencies at the center of recruitment and workforce development.
Yassierli said the approach is based on recommendations by the Organisation for Economic Co-operation and Development (OECD) and rests on two main pillars.
The first is strengthening skills development through modular learning and micro-credentials that provide more specific proof of competencies.
The second is expanding recognition of existing skills through Indonesia’s Recognition of Prior Learning system while encouraging companies to prioritize skills over academic qualifications in recruitment.
He said stronger collaboration between the government and businesses is expected to accelerate the development of a labor market that better matches industry needs with workforce competencies.
Such efforts, he added, would enhance Indonesia’s competitiveness and strengthen its economic resilience amid increasing global fragmentation.
Statistics Indonesia (BPS) reported that Indonesia had 147.67 million employed people and a labor force of 154.91 million as of February 2026.
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Translator: Arnidhya N Z, Martha Herlinawati Simanjuntak
Editor: Primayanti
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