Companies often channel vast resources into shaping employer brands, through slick campaigns, competitive perks, and promises of purpose-driven work. These efforts are especially intense in emerging markets, where local talent is increasingly discerning. Yet in Indonesia, the most aspirational employers are not the tech unicorns or multinationals with polished playbooks. Instead, many Indonesians continue to regard State-Owned Enterprises (SoEs) as highly desirable career destinations.
This is not due to flashy innovation or hyper-efficiency. SoEs are frequently criticized for bureaucracy, overstaffing, and sluggish performance. However, why Indonesians prefer state-owned companies lies in something private firms often struggle to replicate: emotional and cultural depth. These institutions offer a sense of security, belonging, and multigenerational continuity that resonates with Indonesian values. They are not just employers, but embedded institutions in people’s lives.
SoEs align with the country’s collectivist ethos. They acknowledge the role of family in professional life and extend recognition beyond the individual to their wider community. Their ability to foster loyalty and purpose over time forms a powerful Employer Value Proposition in Indonesia. For private and international companies seeking lasting engagement, there are valuable lessons to be found in this often-overlooked model.
"Why do Indonesians prefer state-owned companies? Because they offer not just jobs, but identity, belonging, and pride."
The Emotional Architecture of Loyalty
In many global talent strategies, employee retention is treated as a technical challenge, addressed with compensation packages, learning platforms, and performance-based rewards. While these tools have value, Indonesia’s State-Owned Enterprises (SoEs) take a markedly different approach. Rather than focusing solely on transactional incentives, they cultivate emotional ecosystems that embed work into the broader fabric of life.
This emotional depth is a core reason why Indonesians prefer state-owned companies. Unlike typical corporate events, SoE gatherings are often immersive, multiday experiences where families are explicitly included. Whether it’s a conference, an award ceremony, or a retreat, the presence of spouses, children, and sometimes extended family signals something important: the company sees the employee not as an isolated performer, but as part of an interconnected social unit.
In Indonesia, where collectivist values guide much of social life, this approach feels intuitive. Family is central to identity and decision-making, including career choices. By actively integrating family into workplace rituals, SoEs create a sense of continuity, care, and rootedness that private firms often overlook. It is a tangible form of respect that reinforces both loyalty and pride.
These practices are particularly impactful in rural and peri-urban regions, where the concept of employment still carries deep social meaning. Events like group umrah pilgrimages, family celebrations, and service recognition don’t just foster engagement. They help transform employment into identity and elevate companies into respected community institutions.
Where private firms focus on employee engagement metrics, SoEs create belonging. That distinction matters. It’s not about managing human capital but about cultivating shared purpose, emotional attachment, and long-term connection. These emotional and cultural investments are a key pillar of the employer value proposition in Indonesia, and a major reason why state-owned enterprises continue to command public trust and admiration.
A Legacy Rooted in Nation-Building
The cultural alignment between Indonesian society and its State-Owned Enterprises (SoEs) did not arise from corporate trendsetting or imported HR models. It was forged during the early years of the republic, when SoEs were established not just to produce goods or manage infrastructure, but to carry the symbolic and functional weight of national rebuilding. In the aftermath of independence, these enterprises became central pillars of economic sovereignty and political identity.
Far from being neutral employers, SoEs absorbed the cultural DNA of the communities they served. Their organisational norms were informed by gotong royong, the spirit of mutual cooperation, and infused with Javanese values that emphasised harmony, hierarchy, and collective responsibility. Under President Suharto’s New Order, the role of SoEs was expanded beyond economic management to include social provisioning—from housing and education to religious activities and healthcare access.
The outcome was not simply a large workforce, but a deeply interwoven institution that resembled a village more than a modern firm. Roles were clearly defined, community ties reinforced through rituals, and loyalty nurtured through generations. While this model often deprioritised efficiency, it created an enduring social fabric that many workers found stabilising and meaningful.
This legacy is still visible today. Despite decades of liberalisation and exposure to global competition, many SoEs retain the trust and admiration of Indonesians. They provide more than employment; they offer stability, continuity, and recognition. These are qualities that hold high value, particularly in a country where social status is often linked to institutional affiliation.
This historical context helps explain why Indonesians prefer state-owned companies, especially among younger professionals seeking a balance between career development and cultural alignment. It is also what gives SoEs a distinctive employer value proposition in Indonesia.
Where Performance Culture Stalls, Cultural Capital Endures
This analysis does not overlook the persistent structural challenges facing Indonesia’s State-Owned Enterprises (SoEs). Many are still hindered by bureaucratic layers, politically influenced leadership appointments, legacy systems, and inflated headcounts. In comparison with private firms, particularly multinational corporations, SoEs often lag in metrics such as innovation, agility, and customer responsiveness.
However, why Indonesians prefer state-owned companies cannot be explained through performance indicators alone. What SoEs often lack in operational efficiency, they compensate for with a depth of cultural capital that private firms, even well-resourced ones, struggle to emulate. Their enduring appeal lies in how well they align with Indonesia’s social and cultural expectations around work, community, and family.
In the Indonesian context, employment is not just about income or professional growth. It is a matter of dignity, visibility, and social integration. Private companies that attempt to localize with surface-level perks or globalized workplace trends often miss the point. The employer value proposition in Indonesia is grounded in deeper, more human values. People want to feel part of something lasting, something that respects the role of family and community in professional life.
SoEs, despite inefficiencies, continue to offer that sense of embeddedness. Their rituals, family-inclusive policies, and emphasis on tenure create a workplace identity that feels familiar and safe. They turn the company into a social institution rather than just an economic entity.
What private companies can learn from BUMNs is the importance of purpose and rootedness. A well-designed EVP in Indonesia should resonate with local values and recognise that employment carries emotional and social meaning. In a fast-changing labour market, these elements can offer a kind of resilience and loyalty that performance metrics alone cannot secure. This is what keeps SoEs desirable.
Lessons for Private and International Firms in Indonesia
For international companies and fast-growing startups entering Indonesia, there is often a strong impulse to import proven global strategies. These may include streamlined performance models, flexible work arrangements, or modern workplace perks. While these practices have value, they do not automatically resonate in every market. In Indonesia, long-term success depends not just on systems or structures, but on cultural alignment and emotional understanding. This is where State-Owned Enterprises (SoEs), despite their inefficiencies, have something to teach.
What private companies can learn from BUMNs is how to embed the workplace into the broader social and emotional fabric of employees’ lives. Indonesian workers value stability, respect, and belonging. Family is central. Work is not just a space for achievement but also for community. SoEs have excelled at building this kind of environment, where employment supports social identity.
Private firms should begin by designing family-first experiences. Including family members in milestone events or health initiatives signals that the company understands the full context of an employee’s life. Celebrating tenure and investing in alumni networks reflects long-term thinking, reinforcing the idea that loyalty flows both ways.
At the heart of this is the need to build a culturally grounded Employer Value Proposition in Indonesia. It must go beyond compensation and speak to the values of dignity, continuity, and shared purpose. It must also respect rituals and traditions, from religious observances to communal events, which are central to how many Indonesians experience belonging at work.
In Indonesia, localization is not just operational. It is emotional. The most successful employers will be those who recognise that why Indonesians prefer state-owned companies is less about hierarchy and more about humanity. SoEs, despite their imperfections, have long understood this. Others are just beginning to catch up.
From a traditional business lens, Indonesia’s State-Owned Enterprises (SoEs) can seem outdated. They often fall short on efficiency and agility, and many still face governance and performance challenges. These realities cannot be ignored. SoEs must continue evolving if they are to thrive in a competitive, increasingly digital economy.
Yet narrowing the assessment to performance alone overlooks the deeper reasons why Indonesians prefer state-owned companies. These institutions have succeeded in creating something that many private firms still struggle to achieve: emotional trust, cultural resonance, and intergenerational loyalty. SoEs are more than employers. They are pillars of identity and security for millions of families across the country.
In a global climate marked by workplace burnout, rapid turnover, and declining engagement, this social function holds real strategic weight. SoEs may not be celebrated in shareholder reports, but their ability to integrate work with community and family offers a meaningful lesson. They represent a different kind of excellence.
What private companies can learn from BUMNs is this: to build enduring value in Indonesia, you must understand the culture of connection. The best workplaces here are not only productive. They are human.
State-owned enterprises understand the emotional infrastructure of work. Do you?
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