A question I've been asked numerous times by clients over the past year is; "What's Indonesia like as remote talent pool?". This is almost always in the context of comparing to the Philippines, which is a much more established remote hub. In this post we will cover the analysis of if Indonesia is a better off-shore / remote labour market compared to their much more established neighbour.
Cost of Living and Labor
Generally speaking, the cost of living in Indonesia, especially outside Jakarta, is lower than in the Philippines. This results in lower local salaries (if that's what you're paying) which could be attractive to international companies when weighing which country to build a team.
Talent Availability
Both Indonesia and the Philippines have a young, dynamic workforce that considers STEM as a prestigious and aspirational career path. The pipeline of talent coming through the Universities in both countries is thus very strong as is the general standard of English. Having said that, based on 10+ years of recruiting in each market, I would still say that the Philippines holds the advantage here, given its closer adherence to Western culture, specifically the US. Whereas the Philippines will definitely have the advantage when it comes to customer service roles, on the software engineering side there is little to choose between the countries (based on personal experience) in terms of depth and quality.
Infrastructure
The Philippines has the advantage here, given its long-established presence (and leadership) in the global business-process outsourcing space (BPO). Telecommunications and broadband infrastructure is, therefore, excellent. Indonesia is making big efforts to upgrade its infrastructure, especially in the more developed urban areas. Jakarta and Bali are fast becoming tech-hubs, and while internet in more remote areas can still be patchy and slow, the major cities are already more than adequate.
Cultural compatibility
Cultural compatibility will matter. The influence of the West in the Philippines is pronounced, so the culture is much closer to the Western world in the way things are done. Still, the strong role of family and relationships are critical to understand in order to avoid misunderstanding with team-members. To the south, Indonesia possesses a cultural dynamism that is vastly different from that of the West. Clusters of different indigenous peoples remain across the archipelago, and any business considering expanding into Indonesia will be spending a good deal of time on cultural adaptation. That said, the influx of expats and international businesses, combined with the growing legions of so-called ‘baby boomers’ from the 1980s now seeking the opportunities that career-mind foreign managers in search of opportunities brings, is slowly, but surely, opening up minds and generating a much more sophisticated and global outlook.
In conclusion
Indonesia is definitely viable alternative to the Philippines for companies looking for a low-cost solution with a large labour force. Though there are infrastructural and cultural issues that must be considered, the existing improvements make it advantageous as a remote workplace. Businesses should consider all of this when determining if Indonesia is suitable for their operations.