In boardrooms across multinational firms, expansion into Southeast Asia is no longer a matter of if but how fast. Among the countries in focus, hiring in Indonesia has become one of the most urgent yet poorly executed priorities. Indonesia offers scale, speed, and an increasingly sophisticated consumer base. Its digital economy is booming, and its young workforce is both ambitious and adaptive. For companies with regional or global ambitions, the country is a strategic centre of gravity.
Despite this, many global firms approach hiring in Indonesia with a cost-first mindset. Instead of viewing talent as a lever for market leadership, they see it as an operational expense to be managed. Local hires are often under-compensated relative to their strategic value, senior roles are scoped too narrowly, and critical decision-making authority remains concentrated offshore. This is not merely an HR oversight. It reflects a systemic pattern — one of the most common mistakes global companies make in emerging markets.
What is needed is a shift in mindset. The right talent in Indonesia is not inexpensive or easy to find. But it is a multiplier, and those who recognise that early are the ones most likely to build lasting market advantage.
"Good costs more in Indonesia because good is rare."
The False Economy of “Local Cost Benchmarking” in Hiring
One of the most persistent and costly mistakes in hiring in Indonesia is the reliance on local salary benchmarks as the primary basis for compensation strategy. At first glance, the logic appears sound: pay to the local market average. But this approach fails to account for the type of talent required to grow a business in one of the most competitive and complex economies in Southeast Asia.
The assumption behind local benchmarking is that the market average reflects the quality needed for strategic growth. In reality, it reflects the historical supply of mid-tier candidates, not the rare leadership and executional capability that multinational firms require. The result is a systematic underinvestment in senior roles, product leadership, and critical market-facing functions. Positions that should be designed for high-leverage impact are scoped narrowly, compensated conservatively, and filled accordingly.
This reflects a deeper misalignment. One of the most frequent mistakes global companies make in emerging markets is mistaking cost for value. Low average wages do not equate to low strategic worth. Especially in Indonesia, the kind of talent that can navigate local complexity, influence systems, and align teams across regions, is limited in supply and highly sought after.
Companies that succeed in hiring in Indonesia understand this. They look beyond the benchmark to the real value of capability. They invest in hybrid leaders who understand global business demands and local nuance. These individuals do not come cheap, but they offer outsized returns. When compensation reflects not just market averages but strategic intent, companies attract the calibre of talent that can genuinely move the needle. The cost is higher, but so is the reward.
Scarcity Commands a Premium, Especially in Frontier Markets
One of the central realities of hiring in Indonesia (and many frontier markets) is the scarcity of truly exceptional talent. Deep operational knowledge, cultural fluency, and global-standard execution are not evenly distributed. These capabilities are concentrated in a relatively small group of professionals who have navigated both local market complexity and international business expectations. Their experience is hard-earned and in high demand.
Yet many global companies entering Indonesia continue to treat talent acquisition as if abundance were the norm. They rely on generic compensation frameworks, often imported from headquarters or extrapolated from out-of-date local data. The result is an assumption that top-tier talent should be available at mid-tier cost. It is not.
In reality, good costs more because good is scarce. Treating this scarcity as a premium, rather than a problem, is the first step toward building meaningful presence. But too often, companies fall into the trap of designing hiring strategies based on scale instead of quality. They aim for rapid headcount expansion while undervaluing the leadership and expertise that provide actual leverage in-market.
These choices carry consequences. They erode the company’s credibility with experienced candidates, who view underinvestment as a sign of short-term thinking. They limit the ability to build internal influence and local partnerships. They also reduce the likelihood of sustainable growth in a market as fast-moving and competitive as Indonesia.
By contrast, companies that approach hiring in emerging markets as a high-value investment build real momentum. They secure top local leaders and trust them to shape strategy. In doing so, they send a clear message that the market is not just important, but central to their future. The return on this mindset shift is not theoretical. It is operational, reputational, and ultimately, commercial.
Talent Decisions Are Strategy Decisions
One of the most overlooked truths in hiring in Indonesia is that talent decisions are not simply operational matters. They are strategic choices that shape how a company enters, engages with, and grows in the market. Yet in practice, many companies continue to treat hiring as a task delegated to HR or external recruiters without clear alignment to business strategy.
This operational mindset weakens the foundation of local organizations. When companies prioritise efficiency over impact in their hiring, they tend to build teams that lack seniority, cohesion, and direction. These teams may be quick to stand up but slow to scale. They struggle to assert influence, drive local insights, or earn the trust of external stakeholders.
This pattern reflects one of the more subtle mistakes global companies make in emerging markets: seeing talent as a support function rather than a source of strategic advantage. In frontier markets, and particularly in Indonesia, this assumption breaks down quickly. The right local leader is not just a manager. They are a cultural translator, political navigator, and growth catalyst.
When companies get hiring in Indonesia right, the impact is transformative. A well-chosen and well-supported local executive attracts other high-quality team members. They influence market strategy, align global expectations with local reality, and foster a performance culture that reflects both. Over time, they build institutional knowledge that compounds, making the company faster, smarter, and more trusted in the market.
Strong hiring decisions shape how a company behaves. They define how it builds relationships, how it competes, and how it adapts. In a market like Indonesia, where execution and perception matter equally, the quality of your team is not just an internal asset. It is your presence in the market. It is your brand. It is your strategy.
Emerging Markets Aren’t Junior, They’re Parallel
A persistent flaw in global talent strategy is the assumption that markets like Indonesia are simply underdeveloped versions of Western economies, on a predictable path toward “catching up.” This framing is misleading and leads to poor decisions, especially in how companies approach hiring in Indonesia. When leadership views emerging markets as junior or subordinate, they tend to import oversimplified models, designed for other contexts, and apply them without adaptation.
But Indonesia is not an earlier chapter in someone else’s story. It is a complex, fast-moving market with its own trajectory. The country has leapfrogged legacy systems in areas like payments and mobile access. Its consumer base is digitally native and brand-aware. Local business norms, regulatory structures, and organisational dynamics operate under a different logic than those of developed markets.
Hiring in emerging markets requires a shift in mindset. Companies need to stop looking for lower-cost replicas of their Western teams and start seeking talent with contextual fluency and strategic adaptability. These individuals understand the nuances of the local economy and how to shape global strategy to fit local realities. They are not just executors. They are interpreters and integrators.
The mistake many firms make is in assuming that cost structures should follow the same logic across all geographies. But quality in Indonesia cannot be measured by Western standards alone. It must be defined by relevance, adaptability, and leadership potential in a highly dynamic setting. That kind of talent is not cheap, nor should it be.
Ultimately, success in hiring in Indonesia means recognising that this is not a secondary market. It is a distinct one, with parallel complexity and importance. And companies that treat it as such will be the ones positioned for real long-term growth.
When companies underinvest in talent, especially in high-potential markets like Indonesia, they are sending a message. The way a business approaches hiring in Indonesia is closely watched by customers, competitors, and, most critically, by the talent it hopes to attract. Underpaying for key roles or limiting local leadership sends a clear signal: that the market is not viewed as central to the company’s long-term strategy.
This is one of the most damaging mistakes global companies make in emerging markets. It stems from the flawed belief that quality should cost less simply because the market is less developed. But quality, especially the kind that drives sustainable growth in a complex environment, costs what it’s worth.
Strategic hiring in emerging markets is not a question of exploiting cost differentials. It is a decision rooted in conviction. It means investing in scarce capability, rewarding leadership, and building an organisation that reflects the pace and ambition of the market it operates in.
Companies that recognise this early secure an advantage that compounds. Those that do not risk more than underperformance. They risk irrelevance in regions that will define the next era of global growth.
Don’t confuse low cost with high value. The best talent in Indonesia doesn’t come cheap.
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