Digital skills are essential for companies in the employee selection process in various professions nowadays. Finding employees with good digital skills and providing higher remuneration than other professions are several forms of companies prioritizing tech investment.
This finding comes from a survey in East Ventures-Digital Competitiveness Index (EV-DCI) 2022. Approximately 71 Indonesian digital companies from small, medium, and large-sized companies, participated in the survey, providing their views regarding Indonesia’s digital competitiveness.
More than 60% of the companies revealed that digital skills are essential for the recruitment process in various professions. Over 80% of the total respondents considered increasing the IT investment so that they could scale the business, making it more efficient and a better quality product. According to the survey, nearly 65% of 71 respondent companies stated they would allocate higher remuneration for specialized-digital skilled employees.
However, most companies (52%) have difficulty finding the right digital talents. Almost 90% of Indonesian firms perceive that digitally skilled workforce availability is still lower than the demand.
Some weaknesses that companies’ found and considered in accepting new employees with digital skills are the capability to implement the job are still theoretical; overly general capabilities; awful experience; and a long time adaptation.
There are some actions that companies will typically take when they have yet to find suitable candidates. They will be more aggressive in the recruitment strategy, including through referrals. The companies also will extend the duration of the candidate search. Some of them will accept candidates although their capabilities are below the minimum standard, but will help to increase the skills by conducting training; other ways are by hijacking workers from other companies and outsourcing from other countries (see the table below).
Moreover, the EV-DCI 2022 indicated a decline in the median score of the digital-related sector workforce from last year’s 5.3 points to 5.1. These facts explain another issue in Indonesia’s digital ecosystem. There is a digitally skilled workforce supply-demand gap across regions.
Fulfilling the disparity of supply-demand of digital talents has become urgent as the nation’s experience a digital boom in the tech industry for over a decade. In Indonesia, the government estimates that the country lacks around 400-500 thousand digital talents yearly. At least 50% of the employees only have primary and mid-level digital skills. In 2030, the region will have an estimated shortage of 47 million digital talents.
The EV-DCI 2022 survey pointed out that one of the main reasons that caused this gap is that curriculums in education institutions still do not provide adequate digital competency.
Therefore, the government has implemented some efforts and programs to improve the digital labor market. For instance, the Communication and Technology Ministry provides the Digital Talent Scholarship and Digital Leadership Academy to accelerate the development of digital talents across the country. Furthermore, the Education Ministry launched the Merdeka Belajar program and internship certification to prepare the pre-employees with digital skills.
In the survey, more of the mid and large startups and companies propose fundamental improvements, especially in education and preparation of prospective workers, such as improving formal education curricula that are more adaptive to industry needs (82.5%) and collaboration between the government and companies in making programs work preparation (52.5%). Meanwhile, small startup companies are more likely to propose increasing the participation of training institutions (38.7%).
Addressing the issue, the government, digital startup firms, large corporations, and educational institutions should sit together to seek more solutions so that Indonesia not only becomes the consumer but also produces high-quality talents to encourage the digital economy. For more detailed information, download the EV-DCI 2022 report here.