Talent deficit leading to huge churn in Indonesian digital market
Stephanie Chai of Monroe Consulting tells e27 that talent deficit in the technology sector in Indonesia is forcing companies to give up to 100% salary hikesBy Meisia Chandra 07 Jan, 2014
A booming digital sector in Indonesia has had positive rewards for digital professionals. The influx of foreign investment and the emergence of many new companies has created many new jobs in the sector, with a demand for fresh talent in the local recruitment market. However, talent pool is limited, and poaching is rampant.
e27 spoke to Stephanie Chai, Senior Executive Recruitment Consultant, Monroe Consulting Group, a global executive search and recruitment services agency, to understand the talent scenario in the digital sector better in the archipelago.
Chai says that the talent demand is largely for Sales, Marketing, Research & Development and content professionals. “Given that most of these positions require specialised knowledge of the digital world, companies have very little choice but to hire talent from competition, until more talent can be developed,” she says, stressing on the rising churn rate in the sector, particularly at the senior level.
The agency is in the process of completing a survey of over 1,000 professionals in Indonesia and as according to Chai, the survey “is already seeing some alarming trends.”
As opposed to a rate of 47.1 per cent ‘job change’ in the previous three years, a whopping 27.5 per cent of the Indonesia technology industry talent changed jobs in the last 12 months.
The statistic highlights the under supply of talent in the sector. “You simply wouldn’t find this level of movement at a senior level in most other countries,” Chai adds.
The report though is not due for release until early this year, e27 got the privilege of previewing some of the early data relating to the digital sector.
Show me the ‘Money’
Being a recruitment specialist for Monroe for almost three years, Chai has met a lot of Indonesian digital executives, especially those positioned at the higher level. Both – her vast experience, and the early results of the survey point to ‘salary’ being the biggest consideration for Indonesian executive to change jobs.
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Surprisingly, flexible working hours, office location and chemistry with their future manager, still rank low in importance.
According to the Senior Executive Recruitment Consultant, the priority list differs from other stable job markets, where training, along with work-life balance are strong influencing factors for a job-seeker to change their job.
As per the survey, 17 per cent of the respondents are expecting a 50 per cent increment in their salaries this year. Another 15 per cent expect it to be in the 40 per cent to 50 per cent zone and 18 per cent expect an increment in the 30-40 per cent range. Is that an unreasonable expectation. “You’ll be surprised, they can actually get it,” says Chai, putting our doubts to rest.
Meanwhile, most have reasonable expectations, expecting a 21-30 per cent hike, which according to Chai, is the norm in the technology industry.
Considering the high churn and deficient talent pool, many companies choose to buckle to the demands of the candidates, landing up giving up to 100 per cent hikes. “It’s crazy, and there’s no salary chart, which we are used to knowing of,” says the senior professional.
Chai adds that most digital companies are looking for a talent pool that “is hungry and aggressive”. These companies don’t mind a young candidate, considering that six per cent of the C level executives are in the 25- to 29-year-old age bracket with hefty remuneration.
Headhunters going for the kill
Unlike many sectors, which depend on referrals for recruitments and where the services of headhunters is barely used, the talent deficit in the digital sector has forced companies to seek out the services of recruitment agencies.
The survey shows that within the last six months, 22 per cent of the respondents were approached by headhunters with an offer anything between five to 10 times. Only a meagre 10 per cent weren’t approached at all. The number indicates the aggressive demand from technology companies in Indonesia. It also implies, as Chai aptly puts it that the the digital recruitment market is currently being driven by the talent, unlike other sectors where the market controls the talent pool.