Indonesia’s Salary Market Finally Sobered Up and the Hangover’s Here to Stay
Jakarta’s salary boom is over. Explore what caused the inflation, why the reset is happening now, and how it impacts hiring across industries.
It’s not your imagination. Job offers really aren’t what they used to be. That steady drumbeat of LinkedIn recruiter pings has softened into something more occasional, even polite. The once-flashy salary numbers now look a little more modest. And if you're trying to match your 2022 compensation package today, well, you might have to look a lot harder. Possibly for a while.
It’s not so much a market crash as it is a correction. A return to Earth after a few years of soaring at 35,000 feet on someone else’s fuel.
From 2020 to 2022, salary growth in Jakarta’s white-collar market felt like it had its own momentum. Every role felt urgent. Budgets were flexible. “Market rate” became a moving target that usually moved up. But none of it was grounded in anything long-term; not profit, not productivity, not even common sense. It was all just too much, too fast.
Now that the music has quieted, companies are sobering up. And professionals? They’re waking up to a new reality. One that feels a little less generous, but perhaps a little more honest.
When Capital Was Cheap and Titles Were Expensive
Let’s roll the clock back to 2020 through 2022. Money was cheap, investor confidence was sky-high, and startups were expected to scale fast, loud, and without asking too many questions about profitability. In that environment, Indonesia, with its massive, youthful population and skyrocketing digital adoption, became the darling of Southeast Asia. Everyone wanted in.
Hiring went into hyperdrive. Salaries in some functions leapt. Two times, sometimes three, within a single calendar year. It didn’t matter if the role was core business or a supporting function. Everyone was in play.
Startups began aggressively pulling talent from across industries. Corporate finance professionals, in-house legal teams, mid-tier FMCG brand managers, even government relations officers suddenly found themselves fielding multiple offers. As the talent pool dried up, hiring managers dipped into previously unrelated sectors just to fill seats with someone who seemed quick enough on their feet.
Entire salary bands were skipped. HR teams gave up trying to keep pace. A quiet war was waged through counteroffers. The most in-demand candidates could barely update their CVs before receiving another higher, shinier, slightly more absurd offer.
And then there were the titles. If you joined a company and weren’t at least a “Lead,” were you even hired? Span of control shrank as job titles swelled. “VP of Strategy” became shorthand for “person we needed to hire fast who asked for a big title.”
Traditional companies got dragged in too, reluctantly inflating their offers to keep people from walking across the street to a Series B firm with an open bar and a 15-month runway. Compensation fundamentals? Thrown out entirely. It was survival.
The Correction: Slow, Uneven, and Inevitable
Now, in 2025, the energy has shifted. The exuberance that once powered Indonesia’s hiring spree has given way to something far more cautious. Global interest rates have stayed elevated, and the easy capital that once poured into the region has slowed to a trickle. Fundraising rounds take longer. Valuations have come down to earth. Everyone is being more selective.
The result? A cooling job market, one that feels noticeably different from even just two years ago.
Startups are no longer hiring with their eyes closed and fingers crossed. Many are quietly trimming teams, folding roles, or merging functions. Even the well-funded players are thinking harder about every new hire.
For mid-sized and legacy companies, the pressure to keep up with inflated market rates has eased. They’re hiring again on their own terms, not out of panic.
For candidates, reality is hitting. Roles don’t pay the same anymore. Employers are looking at value delivered, not titles held. In functions like generalist product, HR, and internal ops, where business impact is harder to quantify, matching past salaries is becoming a challenge.
What’s important is that this isn’t isolated to “tech.” The earlier wave of inflated offers pulled talent from across industries and the correction is now following that same path. It’s not dramatic. It’s not a collapse. It’s just the market gradually remembering what things used to cost.
The floor hasn't disappeared, but the ceiling has definitely lowered. Gravity has returned, and while it might feel a little slower and heavier, it's not the worst thing for a market that badly needed to steady itself.
“But My Last Salary Was...”
For many professionals, the hardest adjustment in this reset is not the changing job titles or slower hiring cycles. It’s the money. Or more precisely, the lack of it, compared to what they earned at the peak of the market.
There’s a real dissonance in seeing a job offer that feels like a step back financially, especially while the cost of living continues to inch forward. Rent hasn’t dropped. Groceries remain expensive. Childcare isn’t getting magically subsidised. Against that backdrop, being offered less than you earned in 2022 feels, understandably, like an insult.
Unfortunately, your last salary may not have been based on any long-term business logic. In many cases, it was the product of a very specific moment defined by excess capital, overheated hiring, and a belief that top-line growth would solve everything. That moment has passed.
Today, companies are more focused. They’re building with cost discipline. Hiring managers are no longer told to “just get someone in.” CFOs are checking ROI per head. Internal equity is being audited. Benchmarks are being updated (downward in many cases). Offers now reflect more realistic value-for-role calculations.
This doesn’t mean your experience is suddenly irrelevant. It means the market is recalibrating around fundamentals. That high water mark from your last role? It might not return anytime soon, and it may no longer serve as your starting point in negotiations.
The goal now is to find a fit where scope, impact, and compensation are better aligned. That doesn’t have to mean going backwards. But it does mean letting go of the idea that your last salary is the floor, rather than what it was: a reflection of an overheated moment in time.
The New (Old) Normal: A Return to Fundamentals
Jakarta’s salary market was never built to sustain the highs of 2021 and 2022. Outside of a handful of multinational firms and headline-grabbing roles in unicorn startups, most salaries here have always operated within a more modest range. The recent surge was an exception. And now, we’re seeing a reset to something that looks far more familiar.
The new landscape is already taking shape.
Compensation bands are being redefined with structure in mind. Companies are revisiting job architectures and reining in title inflation. A “VP” title today might come with actual team responsibility and a P&L, not just a laptop and a LinkedIn announcement. That’s progress.
Fixed pay is flattening. Some roles are seeing slight dips. Others are simply holding. What’s growing is the share of bonuses linked to actual performance, profitability, or multi-year outcomes. In theory, this brings fairness. In practice, it puts more onus on employees to deliver results, not just show up.
Revenue-generating or risk-protecting roles will continue to hold value. If you’re in sales, tax, compliance, treasury, or cyber, your skills still command a premium. These are functions businesses can’t afford to underinvest in.
Generalist functions like operations, HR, junior finance, and early-career product, are facing more scrutiny. The overhiring in these areas is now being corrected.
This won’t feel smooth. Some employees will feel stuck. Others will question their worth. But markets don’t correct for sustainability, not for comfort. And in time, a more balanced system will emerge. One where pay reflects value delivered, not hype. It’s just a return to basics.
So, What Now? For Employers and Candidates Alike
This is a chance for both employers and professionals to move beyond the noise of the last few years and start making smarter, more deliberate decisions about compensation.
For employers:
Rebuild your salary bands using updated, cross-sector benchmarks. Not every startup needs to match tech unicorn numbers from 2022, and not every manager needs to be called a VP. Anchor your comp models in actual job scope.
Reward performance. Flashy CVs and inflated titles should matter less than clear outcomes. Move more budget into performance-based pay, but make sure the targets are measurable, fair, and transparently communicated. If employees don’t understand the rules, the incentives won’t work.
Fix compression. During the salary spike, some people were hired way above the line. Don’t rush to level everyone downward, but do put a plan in place. Create a glidepath and give it time. The goal is balance.
Don’t rely on salary alone. Flexibility, meaningful work, and career growth matter more than ever. These are real levers in today’s market.
For candidates:
Let go of 2022. It was a unique moment, not a permanent benchmark. Focus on what you bring today in skills, scope, impact, and readiness to grow.
If base pay feels lower, ask smarter questions. Is there a bonus plan? Is there equity? What’s the learning path? The career progression?
Know your function. If you’re in tax, cyber, or supply chain, you still have negotiating power. If you’re in generalist operations or junior product, expect more restraint.
Stay sharp. Talk to others in your field. Read the data. The more informed you are, the more grounded your expectations will be.
The correction we are seeing now is a necessary return to centre. The salary surge of 2021 to 2022 was thrilling while it lasted, but it came at a cost. It created bloated team structures, broke internal pay equity, and led many to assume that those inflated offers were the new baseline when they weren’t.
This reset gives everyone a chance to rebuild with more clarity. For employers, it means tightening up salary bands, linking pay more directly to performance, and making offers that are sustainable beyond the next funding round. For candidates, it is a time to realign expectations and refocus on value delivered, not just value expected.
Eventually, this new phase will feel more stable, more rational. Job titles will mean something again. Pay will follow structure. And careers will be built on substance, not market momentum.
The market is not broken. It is correcting. And in that correction lies the opportunity to build something more enduring.
At StratEx - Indonesia Business Advisory we help clients get ahead with updated market data, banding strategies, and localisation insight. Contact us to recalibrate compensation, structure, and hiring strategy for Indonesia’s new reality.