By Shoeb Kagda, Founder, Indonesia Economic Forum
Their presence is felt everywhere one looks. In cafes, shopping centers, on the MRT but most visibly in the workplace. Indonesia is today being overrun by the millennial generation – those born between 1980 and 2000 – and they are driving both economic growth and social change.
Perhaps the poster boy of the millennial generation is the country’s new Education Minister and the founder of Gojek, its first decacorn. It is fitting that Nadiem Makarim has been tasked with leading the country’s march into a brave new world by disrupting one of its most cherished sectors.
Makarim has made some sweeping changes to the education system since being appointed last October, including removing the annual national examinations. Not all his moves have been popular with establishment figures but his challenge is illustrative of the larger social undercurrent; the rise of the Millennial generation and its impact on society, politics, business and culture in the face of resistance by those who are now in power.
According to a 2017 National Socio-Economic Survey (Susenas), there were 88 million millennials, making up 33.75% of Indonesia’s population. Tech-savvy, impatient, drivers of social media consumption, initiators of the sharing economy, Indonesia’s millennials are upending traditional workplace practices and also driving growth. Indeed the country’s famed demographic bonus will depend highly on how corporations, civil society organizations and indeed the government engage with these young people.
With millennials making up nearly 70% of the current workforce, they are likely to drive socio-economic trends for the next three decades. Industries such as property, finance, e-commerce, housing and media will be impacted by the buying habits of this dominant group.
For example, millennials place greater value on maintaining their lifestyles than their parents when it comes to choosing a place to live. They expect their place of residence to be near proper facilities such as schools, hospitals, entertainment areas and green spaces.
They want to live close to their work place, which provides a challenge to developers given the rising property prices in many central business districts in major cities. To meet this challenge, many developers have started to experiment with smaller apartments with full facilities that meet the budgets requirements of this group.
But while the country’s upwardly mobile millennials have grabbed public attention, the majority of those between 20-35 years of age are blue-collar or sales workers. According to data from the Indonesian Central Bureau of Statistics around 20% of millennials are blue-collar workers; 25% are in sales and service jobs; 1.4% hold managerial positions and 7% work in professional jobs.
Disrupting the workplace
It is perhaps in the work place that the impact of the millennial generation is felt most acutely as they seek a management style and corporate culture that is significantly different from anything that has gone before.
Mark Teoh, executive director at Deloitte Consulting Indonesia puts it succinctly: “There is a strong focus amongst Indonesian corporations in aligning organizational models to developing ability to innovate. It is not just about working outside office hours but working more collaboratively. This means working in teams and having multiple functions.”
He adds that millennials are more open to acquiring new skills to achieve a given tasks which means that can work across the organization with human resources, marketing and finance to get the job done.
“They want greater empowerment and are bringing down barriers in the leadership levels. They do not want to be micro-managed but are driven by objectives,” he notes.
To cater to the needs of the millennials, many large corporations are learning to adapt. PT. Astra International, the country’s largest listed conglomerate, revealed in the Indonesian Millennial Report 2019 that millennials account for 70% of its 250,000 workforce. This has forced the company to alter its management style and structure.
“More companies are putting greater emphasis on employee development programs,” notes Teoh. “This is largely driven by greater demand among employees for personal development which includes shorter courses, mentoring and on the job training.”
As Indonesia’s digital economy fires up, such perks or attractions are critical in attracting talent for organizations who have to compete with start-ups when hiring millennials. Companies such as Gojek, Tokopedia and Ovo are drawing millennials like bees to honey. Driven by tech and an aura of coolness, the unicorns are disrupting more than established industries; they are also disrupting the very essence of Indonesian corporate culture.
“What I am hearing is that many of our clients are focused on building their corporate culture. Many family firms are going through a generational shift to adopt global best practices but also to cater to the new socio-demographic environment”
Representing 70% of the workforce, Indonesia’s millennials will drive change and remake the country over the next 30 years. Open to diversity and more optimistic of their future, they will determine the direction their nation embarks on.