Catalyst for Business Owners: 3 Practical Ways to Tackle Unemployment in Indonesia

The year 2025 began with sobering news: Indonesia being Number 1 rate of unemployment in ASEAN.

While the country remains rich in human capital, the lack of effective employment pathways has become increasingly apparent. Social media recently amplified this reality, as viral videos showed massive crowds at job fairs—some attendees reportedly collapsing under the heat while queuing for hours. These scenes, while extreme, underscore a broader structural problem that extends beyond government policy. Yet, amid the challenges lies an opportunity: businesses, particularly those acting as third-party players in the economy, have an increasingly vital role to play in shaping solutions.

Indonesia’s economy is uniquely characterized by its high proportion of micro, small, and medium enterprises (MSMEs), with warungs (small stalls or kiosks) and informal businesses forming the majority. These types of businesses often operate on razor-thin margins, making it understandably difficult to expand workforce capacity or create structured employment pipelines, aggravating unemployment in Indonesia. However, this does not mean that the private sector, especially third-party business actors, is powerless. In fact, those who are agile, scalable, and positioned as connectors between stakeholders—such as consultants, digital agencies, and outsourcing companies—are uniquely equipped to fill critical gaps in Indonesia’s labor ecosystem and reduce unemployment in Indonesia.

Internship opportunities for Senior High School Students

One concrete and actionable strategy to is to introduce structured internship opportunities for senior high school students (equivalent to Year 12 or SMA Kelas 3). Many students are unable to pursue university education due to financial constraints, which limits their access to white-collar employment despite having strong potential. Moreover, with the recent abolition of the National Exam (Ujian Nasional), students now have more flexibility in their schedules, making it even more feasible for them to participate in meaningful internships.

By offering internships tailored to final-year students, businesses can provide early exposure to real-world work environments. These students, once trained, could be evaluated for potential long-term employment. For those who demonstrate commitment and ability, companies could offer a part-time bachelor’s degree sponsorship program with a service bond—allowing them to study while continuing to contribute to the business. This model not only helps students build their CVs with relevant work experience but also nurtures a more loyal and skilled workforce.

Collaborations with small-scale specialty schools

Another promising approach is to collaborate with small-scale specialty schools in emerging fields such as robotics, artificial intelligence, UI/UX design, and web development. These institutions often offer practical, skill-based education that aligns well with industry needs. Business owners can work with these schools to design upskilling programs for their employees or to identify and train high-potential students.

Besides that, regular networking sessions between the school’s learners and professionals from partner companies could further foster exchange of ideas and broaden career pathways. These collaborations don’t have to be costly—many schools are open to co-hosting events, and some already seek industry involvement to keep their curriculum relevant.

Project-based Employment

From a broader socioeconomic lens, one overlooked but impactful intervention could be to build local employment hubs focused on project-based or task-based work. Instead of relying solely on long-term employment, businesses—particularly those in the digital or service sectors—could offer micro-projects that students, homemakers, or career-switchers can take on remotely or during off-hours. For example, content editing, data labeling, or simple graphic design tasks could be delegated to part-time freelancers sourced from local talent pools.

When aggregated, this model not only reduces operational cost for the company but also introduces income streams to those often excluded from traditional hiring models. This gig-based approach has proven effective in countries like India and the Philippines, and can be scaled with the right ecosystem partners.

Tackling unemployment in Indonesia requires more than just government programs—it needs the active participation of the private sector, especially adaptable third-party businesses. While large corporations may have the resources, it is often the smaller, more flexible actors who can move faster and create grassroots-level impact. Whether by offering internships, building industry-school partnerships, or initiating micro-work models, each step—however small—contributes to building a more inclusive and resilient employment ecosystem.

Indonesia’s unemployment issue may be a pressing challenge in 2025, but it is far from insurmountable. Business owners and third-party partners have the tools, networks, and insight to reshape the landscape—starting not with massive infrastructure, but with scalable, human-centered initiatives. And in a country where youth make up the majority, the time to act is now.

At Vintage Management, we provide consultation services to business owners, including Indonesian companies that are looking to create change for the local landscape. If you are one of them, please contact us here for a private discussion: https://seeandconnectsg.com/contact/

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