Employee Development in Indonesia: A Great Way to Lose Talent, Time, and the Future
Southeast Asia’s talent development is failing and how excuses, short‑termism and leadership gaps threaten long‑term competitiveness.
Welcome to emerging Southeast Asia: a place where GDP projections float upward with religious certainty, slogans are hand-delivered by angels (“Golden Indonesia 2045!”, “Leapfrogging to Innovation!”), and yet actual investment in employee development remains somewhere between negligible and “we gave someone a certificate once.”
Each year, the Global Talent Competitiveness Index suggests, “Hey, maybe just a little more effort on developing your workforce?” And each year, the region responds with its greatest hits:
“But training is expensive and employees leave.”
“We are still developing.”
“SMEs don’t have time.”
“Our culture is different.”
“Let’s run a leadership bootcamp at a hotel.”
“Maybe next quarter. Or the one after that.”
And so it continues. The region finds comfort in the warm embrace of familiar constraints, and the language of “not now,” “not us,” and “not realistic.”
But, the world doesn’t pause for those still getting their act together. At some point, refusing to invest in people stops being strategic restraint and starts looking like arrested development. Advanced economies didn’t wait for perfect conditions. They made the hard investments. Early. Repeatedly. And yes, uncomfortably.
It’s called growing up.
The Strategy Equivalent of Eating Instant Noodles Until Age 50
Emerging Southeast Asian economies love to remind the world, and themselves, that their greatest competitive strength is being “low cost.” It’s delivered proudly, when in reality it’s the economic equivalent of advertising your house by saying, “it’s cheap and there’s a roof.”
This is not a bold growth strategy. It is survival disguised as positioning. The translation is less “we’re affordable” and more “please pick us, we promise not to cost too much or ask for raises.” Charming at first. Desperate on repeat.
The low-cost development trap is well-worn and deceptively tidy.
Jobs are designed to be simple so they can be filled cheaply.
Firms then decide they don’t need to invest in training because the tasks are basic.
Workers stagnate, then become interchangeable.
And so, when international investors ask, “what’s your unique value?” the answer remains a sheepish shrug and a discount.
Every developed economy we admire started in roughly the same place.
Poor.
Low-tech.
Labour-abundant.
But they didn’t cling to cheapness like it was a national identity. They made real bets.
They industrialised, sometimes awkwardly.
They threw resources at education and training before they could fully afford it.
They committed to hard things like capability-building, even when the return on investment looked suspiciously intangible.
This isn’t ancient history. It’s recent memory. And it’s repeatable.
But ASEAN seems convinced it can skip the hard bits. That it can pray its way into productivity while avoiding the boring, difficult, expensive process of building actual human capability.
Unfortunately, competitive advantage doesn’t grow on hope. And long-term growth rarely favors the country that tries to win the race by being the cheapest to hire.
The Excuse Equivalent of “My Dog Ate My National Development Strategy”
The moment workforce capability comes up, officials and business leaders alike perform the well-rehearsed sigh, look off into the middle distance, and recite, “Well, you see, we are SME-heavy.” Cue solemn nods. No further questions.
This phrase is deployed like it’s a terminal diagnosis. As though having many small and medium enterprises somehow renders a nation incapable of basic investment in human beings. But here’s the thing. SMEs can train. They simply choose not to.
There is no shortage of options. There are government grants, co-funded programmes, shared training hubs, industry-led initiatives, subsidised platforms, even free toolkits from development agencies. Consultants will not only design your learning strategy but also email you reminders to actually implement it. And yet, year after year, SMEs deliver the same performance: training budgets that rival petty cash, frameworks scribbled on napkins, and managers who believe mentorship means letting junior staff observe them panic in real time.
The issue isn’t structural. It’s cultural. Training is seen as a nice-to-have, a bonus when cash is good, or something you do once a year to tick a compliance box. Too many SME owners view people development as a distraction from “real work,” as if upgrading staff competency is somehow unrelated to performance or retention.
Being SME-heavy is not the problem. Being SME-heavy while perpetually allergic to planning, collaboration, and long-term thinking is.
Eventually, delaying capability building becomes a habit. A default mode of operation. The professional equivalent of saying, “next month” forever, until one day, you realise your competitors already trained, scaled, and left you behind.
When Employers Create the Problem and Then Complain About It
It’s the classic boomerang complaint: “Why should we train employees? They’ll just leave.” And yet, no one seems to point out the obvious truth: they leave because you don’t train them. Or worse, you train them just enough to realise they deserve better.
This is the chicken-and-egg scenario where the chicken spends most of its time filing HR complaints against the egg.
\From a single employer’s perspective, the fear has legs. You pour money into skills upgrading. English lessons. Digital tools. Critical thinking workshops. You even splurge on that leadership programme with the inspirational speaker who used to be a monk. Then, just as your freshly polished employee becomes marginally competent, they vanish. Off to Singapore, where salaries are three times higher and public transport doesn’t involve tactical patience training.
The fear is real. But so is the irony.
At the national level, this logic collapses. Countries that avoid investing in their own workforce because they might be poached are effectively committing to permanent mediocrity. “We’d rather be ignored than lose talent” is a brave development strategy, assuming your end goal is irrelevance.
This refusal to act, dressed up as prudence, is really just long-term self-sabotage. It’s like refusing to water your plants because they might grow too big for their pot. Capable people will always have options. The trick is to build an environment that makes them want to stay, not hope they have none.
Talent is not loyal to stagnation. And people rarely leave organisations that actually help them grow.
HR Is Not the Sole Problem. Leadership Apathy Is.
Whenever the topic of employee development comes up, business leaders glance sideways and mutter, “Our HR isn’t strong enough.” It’s a reliable way to shift blame without making eye contact. Convenient, too. Because HR, in many local firms, is hanging on by a paperclip.
We are talking about teams that are often one person deep, juggling payroll, compliance, and recruitment. Expecting them to single-handedly design and execute a holistic development strategy is like asking a street food vendor to run a fine-dining kitchen with the same wok and no waitstaff.
But, even if HR were world-class, it wouldn’t matter much. Because employee development isn’t an HR function. It’s a leadership decision. One that involves actual risk, delayed gratification, and the uncomfortable task of putting money into people before they become visibly profitable.
Leaders decide whether capability is a priority.
They approve or deny budgets.
They shape culture by what they reward.
They set the tone, the pace, and the standard.
But too often, those leaders delegate the thinking to HR, the execution to consultants, the accountability to no one, and then act shocked when nothing happens.
Consultants can help, sure. They can design beautiful systems. But they cannot force leaders to follow through, to hold managers responsible, or to prioritise long-term capability over short-term optics.
So let’s stop pretending HR is the problem. It is simply the most convenient scapegoat. The real issue is leadership that refuses to lead on the one thing that determines whether the organisation grows or remains forever busy, undertrained, and wondering why its best people keep leaving for companies that actually invest in them.
Emerging Southeast Asia is never short on ambition. Every national blueprint comes with a vision year, a catchy slogan, and an overly enthusiastic mascot.
“Digital Nation by 2045.”
“Centre of Innovation for ASEAN.”
“Golden Era of Talent.”
It all looks impressive on a slide deck. But none of it matters if the region’s workforce is still being managed like it’s 1998.
Global competition is not waiting politely at the door. The capability gap between Southeast Asia and the rest of the developed world is a chasm, growing wider by the year, while the region continues debating whether or not to invest in its people.
The usual suspects, like SME constraints, brain drain, weak HR, and cultural factors, are real. But they are not unique. Every country that made it through to high-income status did so despite those challenges. And they started investing before they had it all figured out.
Indonesia and its neighbours must now choose. Do they stay frozen in a cycle of low-cost labour and big talk, or finally do the hard work of building capability?
At StratEx - Indonesia Business Advisory we work with clients in Indonesia and across ASEAN to move from talk to execution on talent development, and leadership pipelines. Contact us if you’re ready to invest in your people and stop bleeding talent.