Over the last few days, Indonesia has been making headlines for its decision to propose a new bill that will allow local startups make more foreign hires.
According to A.T. Kearney, Indonesia produces 278 engineers per million people a year, which is inadequate, given the number of tech startups that reached 992 as per the data recorded in 2018.
In comparison, Malaysia and Thailand produce over 1,000 engineers per year, making the field ripe with local talents. For this reason, Indonesia’s government under President Joko Widodo proposed the new bill to invite more foreign investment and boost economic growth.
In an article we released last week, it’s stated that the draft omnibus law’s detail is on job creation, which packages a number of legal revisions into a single vote. The copy of the job creation bill says that an employer categorised as a “startup” need not “have its plans to hire foreign workers approved by the central government”, which is quite a change from the previous labour law that only allowed “representatives of foreign countries that use foreign workers as diplomatic and consular employees”.
The draft includes a simpler process for business permits and relaxed labour rules. The bill, once submitted to the legislature, is likely to pass within six months, as Widodo’s ruling coalition controls about three-quarter of the 575 seats in the People’s Representative Council.
e27 has gathered comments from the Indonesian startup community on the matter. We asked whether they currently employ any engineering foreign talents and their take on the proposed bill, as well as whether or not it will be a disadvantage for the local talents and what are the challenges in talent acquisition.
e27 received the most feedback from local, emerging tech startups from different industries. What we notice is that most of the Unicorns with the most number of foreign talents employed within its engineering team chose not to comment on the proposed bill.
Also Read: Morning News Roundup: Indonesia proposes law that makes foreign talent hiring in startups easier
Ibraham Arief, the former VP of R&D in Bukalapak, one of the five unicorns in Indonesia was an exception for lending his insight. Arief specifically said that currently, the local tech talent market in Indonesia is cooling down due to business rationalising in tech companies.
“There is a marked increase in the supply-side lately, plenty of local talents with 4+ years of experience at unicorns or Series C+ companies migrating or looking to migrate to smaller (Seed/Series-A/B) companies. So the answer is yes, the increased supply of expat talents will have a lot of impact on those in the “green” experienced local talent pool. However, I’d say it will have lesser impacts for experienced local tech talents, which I estimate numbers in tens of thousands by now,” Arief said.
Surabaya-based P2P lending startup PinjamWinWin‘s CEO James Susanto opined: “We don’t have foreign talents, but we are in the middle recruiting a German national into our management. If the new bill indeed makes it easier to hire foreign talents, I’m all in for that. There are technical, cultural, and behavioural aspects that the foreigners possess and can fit the right positions,” Susanto said, showing support for the bill.
“On the contrary, we have to think in the long term. I believe we need the ‘right’ foreign influences to rub into our local talents: in terms of mentality, technical skills, work ethics, and so on. Indonesia could learn from them with the goal to make our local talents match their level,” he added, drawing an example from China, which he said has lots of foreign workers but is able to combine the influx with right management, technical know-how, and culture, resulting in high productivity.
To Susanto’s point, the integration between foreign talent and local talent is deemed important to ensure the change really permeates.
Despite positive responses and optimistic outlooks from those in the startup industry, the bill created a backlash as more than 4,000 people protested outside the legislature on Wednesday last week when the job creation bill was submitted.
Agung Bezharie, CEO of micro-retail tech startup Warung Pintar, admits that despite its recent achievements, the company does face challenges in getting the right talents in Indonesia, even if its headcount is 100 per cent local talents. “Industry, skills and cultural match-up still don’t sync together. We see some companies compensate for that by hiring foreign talents yet for our company, we haven’t found foreign talent that fits our company for now,” Bezharie explained.
As for Indonesian P2P lending platform UangTeman’s CEO Aidil Zulkifli, the main challenge would be finding the best talent in the tech area, and to ensure that the talent hired can further share his or her knowledge to the team in order to have the same standard of SKA (Skill, Knowledge, and Attitude).
“Recently UangTeman has conducted “One Day Hiring” for the tech division in which all applicants are processed and hired within the same day. All talents hired were Indonesians. We are focussing on finding skillful and quality local talent from Indonesia as we believe that Indonesia has sufficient talents to support our business,” Zulkifli concluded.
Also Read: UangTeman raises first tranche of US$10M Series B led by Tim Draper’s fund; to acquire a P2P startup
The right mindset in approaching the proposed bill is what’s going to make or break the continuous demand of local talents.
“The challenge remains in finding the right talents who have been exposed in the right environment. We may always have talented and willing people applying for an opening, but they were not exposed to the ‘right’ ecosystem that provided them with a different outlook in life and target, resulting in plateaued progress after a while. Exposure to the right environment where talents can socialise and have role models can translate to better creativity, initiatives, and productivity,” Susanto added.
To see it as an opportunity instead of a threat like what Susanto implied, could result in empowerment and improvement of talents produced in a year.
With several edutech focussing on nurturing tech talents in a boot camp-style code learning and legit certification continue to have the seal of approval from investors in Indonesia, the future of engineering local talents are bright.
Jakarta-based developer school Hacktiv8 announced that it has raised a US$3 million per-Series A round led by East Ventures with participation from Sovereign’s Capital, SMDV, Skystar Capital, Convergence Ventures, RMKB Ventures, Prasetia, and Everhaus back in January, a testament to the untapped potential that is Indonesia’s local talents.
More foreign hires or not, Indonesia is in a good company. It will not slow down its economic growth anytime soon, as long as the talents and startups professionals keep an open mind.
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Photo by Al ghazali on Unsplash
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