How digitization is disrupting HR in Indonesia

The largest archipelago nation in the world is on its way to transition into Indonesia 4.0. The pandemic has significantly accelerated digitization, and the need for technology has increased significantly as a result of the Indonesian government's COVID-19 restrictions. There are currently 202 million internet users in Indonesia, contributing $70 billion to the digital economy in 2021, with $146 billion projected in 2025.

Human Resources in Indonesia is no exception. Digitization is disrupting HR in Indonesia. And paving the nation’s road map for “Making Indonesia 4.0” includes cross-sectoral national initiatives to improve the quality of local human resources.

The pandemic certainly exposed the inequalities in the country’s digitization efforts. MSMEs, for instance, were the most affected by the problems caused by the pandemic, when close to 80-90% of them lost out to their income due to digitization. Rapid digitization among MSMEs occurred only in urban areas and provinces with high rates of technology adoption. This resulted in a digital divide, as well as a disparity between regions in various parts of Indonesia.

However, with a young population and plenty of room for expansion, Indonesia is well positioned to benefit from the productivity gains and new opportunities that automation provides.

How digitization is disrupting HR in Indonesia

1. Job retraining and workforce skills development

It will be a critical challenge to provide job retraining and enable individuals to learn marketable new skills. As the skill set required for a successful career change evolves, mid-career retraining will become increasingly important. 

HR in Indonesia can take the lead in some areas, such as on-the-job training and opportunities for workers to improve their skills. HR will need to create a collaborative ecosystem of stakeholders, including academic institutions, employers, and the government.

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2. Business mobility

Greater labour market fluidity will be required to manage the difficult transitions that are anticipated. By matching employees with companies looking for their skills and providing a lot of new job opportunities for those willing to take them, digital talent platforms can foster fluidity. 

For instance, Generation, a global non-profit organisation, assists students in developing thriving and sustainable careers by providing capability building boot camps and engaging with employers from the start. The intensive boot camp covers technical, behavioural, and mindset skills that are driven by industry needs and demands. 

3. Income and transition support to employees

Income support and other forms of transition assistance will be critical in assisting displaced workers to find gainful employment. Aside from retraining, a variety of policies, such as unemployment insurance, public assistance in finding work, and portable benefits that follow workers between jobs, will be beneficial.

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How digitization is disrupting HR in the transportation sector

The transportation industry is one of the primary sectors to be impacted by the way digitization is disrupting HR in Indonesia and redefining business practises. For instance, the Indonesian-run Blue Bird Group, which has been running for close to 50 years and whose major arm is the country’s biggest taxi-hailing service, has overcome significant challenges to adapt to the disruptions caused by HR automation. 

Here’s how HR in the company dealt with the disruption of digitization in transportation:

1. Keeping up with market expectations

Blue Bird has been around for close to 50 years and has since been growing rapidly with distinct business models. Instead of following the models of their competitors, they attempted to answer the changing market expectations while remaining true to their core values and empowering their services to bring back their customers. For instance, they now have three channels to book taxis such as mobile apps and phone calls, in addition to street hailing which forms fifty to sixty percent  of the orders. The major first challenge with this is the ability to help people keep pace with the transformational speed of the business. 

2. Leadership transformation

Because business outcomes are determined by a person's success, an intensive mindset has been developed to ensure leader transformation. The communication process is critical to understanding their mission and goals. Effective communication between managers and employees is critical in aligning everyone with the business goals.

3. Getting employees’ buy-in

Employee buy-in is critical to the success of the company  as they  are the true advocates for change. Because the transportation industry is so competitive, all of Blue Bird's employees are trained in the use of smartphones. All drivers, in particular, are encouraged to abandon their traditional mindset and embrace the use of new technologies, software, and smartphones to drive increased business.

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Enabling HR in Indonesia to thrive in the digital world

Digitalization plays a major role in transforming HR in Indonesia. Businesses will be able to gain access to a national/global audience, reduce operational costs, and optimise transactional processes as a result of the benefits of digitization.

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peopleHum's human capital management platform is the software solution that will support and assist HR in Indonesia to thrive within the digital disruption. HR will be transformative in bringing employees closer to the company by leveraging peopleHum's technology to facilitate a new-age business model.

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Digitization is disrupting HR in Indonesia for the better. To learn about how peopleHum can help businesses in Indonesia navigate through these disruptions, book a demo with us and talk to our specialists today.