Comprehensive Guide to the Level, Salary, Rates, and Characteristics of Indonesian IT Engineers

Due to the shortage of engineers in Japan, the depreciation of the yen, and the rising labor costs in Vietnam, expectations for system development in Indonesia are increasing. Indonesia is one of the rapidly growing countries in Southeast Asia, and the IT industry is also experiencing rapid growth. In particular, the demand for IT engineers is rising, and many companies both domestically and internationally are hiring Indonesian engineers. In this article, we will provide a detailed explanation of the programming level, salary and rate market, and characteristics of Indonesian engineers.

 

 

Level of Indonesian Engineers

It is said that there are about 2.7 million engineers in Indonesia. Although the engineer population in Indonesia is relatively small compared to the total population, educational institutions and the government are actively working to develop engineers to meet the rapidly increasing demand for technology. Compared to other Asian countries, the ratio of engineers to the population is low, but future growth is expected.

Education Standards and Skill Set

Indonesian engineers study computer science and engineering at local universities and vocational schools.

In Indonesia, many technicians are produced from three types of educational institutions: high schools (SMK), polytechnics, and universities. Especially in STEM fields and telecommunications/information sciences, a large number of graduates emerge each year. However, the supply has not yet caught up with the industry’s demand, and there is still a shortage of highly specialized engineers.

Major universities include Bandung Institute of Technology (ITB), University of Indonesia (UI), Binus University, and Gadjah Mada University. These universities boast high educational standards and produce many outstanding Indonesian engineers.

Graduates of these science and engineering universities possess the following skill sets:

• Programming Languages: Proficient in various languages such as Java, Python, JavaScript, and C++.
• Web Development: Skilled in modern frontend technologies such as HTML, CSS, React, Vue.js, and Angular.
• Mobile App Development: Experienced in developing applications for Android and iOS platforms using Kotlin, Java, Swift, and React Native.
• Database Management: Capable of utilizing database technologies such as SQL and MongoDB.
• Cloud Computing: Able to build scalable systems using cloud services like AWS, Google Cloud, and Azure.

Skill Differences Based on Years of Experience

The skill level of engineers also varies depending on their years of experience. Generally, the classifications are as follows:

• Junior Engineer (0-2 years of experience): Possesses basic programming skills and completes tasks under supervision. Junior engineers usually work under specific instructions while aiming to improve their skills.
• Mid-Level Engineer (3-5 years of experience): Capable of handling projects independently and solving complex problems. Mid-level engineers contribute to improving project quality through design and code reviews.
• Senior Engineer (5+ years of experience): Demonstrates technical leadership, manages system architecture design, and oversees entire projects. Senior engineers are also involved in strategic technical decisions, team mentoring, and training.

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Salary and Market Rates

Salary Overview

The salary of Indonesian engineers varies significantly depending on experience, skill set, and location. However, compared to general factory workers and other occupations, engineers in Indonesia earn a relatively high standard salary.

Below is an approximate salary range for Indonesian engineers:

• Junior Engineer: IDR 5,000,000 – 10,000,000 per month (approximately 350 – 700 USD)
• Mid-Level Engineer: IDR 10,000,000 – 20,000,000 per month (approximately 700 – 1,400 USD)
• Senior Engineer: IDR 20,000,000 – 35,000,000 per month (approximately 1,400 – 2,500 USD)

Salaries may vary depending on company size, project type, and the engineer’s expertise. Engineers working in major cities or those with specialized skills in certain fields tend to receive higher compensation.

Freelance Engineer Rate Market

For freelance engineers, the rate varies depending on the type and complexity of the project, deadlines, and other factors. However, the general market rates are as follows:

• Junior Freelancer: IDR 100,000 – 200,000 per hour (approximately 7 – 14 USD)
• Mid-Level Freelancer: IDR 200,000 – 400,000 per hour (approximately 14 – 28 USD)
• Senior Freelancer: IDR 400,000 – 700,000 per hour (approximately 28 – 50 USD)

Since freelance engineers work on a project-by-project basis, compensation can vary significantly depending on negotiations with clients.

Minimum Wage in Indonesia

The minimum wage in Indonesia varies by region and is set by each provincial government. In major cities like Jakarta, the minimum wage for 2023 is IDR 4,416,186 per month (approximately 310 USD). In other regions, it tends to be lower. While the minimum wage differs from engineers’ salaries, IT industry professionals generally earn above this threshold. However, this minimum wage often serves as a benchmark when hiring engineers in different areas.

 

 

Characteristics of Indonesian Engineers

Cultural Background and Communication

Indonesian engineers are generally mild-mannered, cooperative, and value teamwork. Their English skills are improving, and engineers in urban areas often have a sufficient level of English to communicate effectively in international projects. Many engineers speak Indonesian, English, and their local dialect.

Characteristics of Indonesians

Indonesia is a pro-Japan country, and many Indonesians are obedient and kind. This makes cooperation with Japanese companies smooth, allowing for easy cultural adaptation. Indonesians are polite, respectful, and have a culture that fosters strong workplace collaboration.

Unicorn Startups and Innovation

Indonesia has many unicorn startups and a thriving innovation ecosystem. Unlike Vietnam, Indonesian engineers are not just focused on offshore development but also have strong capabilities in building services. This allows them to provide high-value solutions. Notable unicorn startups include Gojek, Tokopedia, and Traveloka, which have gained attention for their technological innovation and high-quality services. Many engineers continue to thrive in various companies after working in these startups.

Work Style and Workplace Environment

Due to worsening traffic congestion in Indonesia, the culture of remote work is expanding, with many engineers working from home or coworking spaces. More companies are offering flexible work arrangements, emphasizing work-life balance. To improve employee well-being and productivity, companies provide flexible working hours and remote work options.

Population Growth and Supply of Engineers

With a population of 270 million and rapid growth, Indonesia is one of the world’s most populous countries. This increase in population expands the supply of young, tech-savvy talent, playing a crucial role in technological innovation and economic growth. Given the large youth population, investment in technical education is expected to sustain a steady supply of engineers in the future.

Adaptation to Technology Trends

Indonesian engineers are highly curious and proactive in learning new technologies and trends. Especially in startups, cutting-edge technologies are actively adopted to enhance competitiveness. Many engineers are interested in and continue learning about fields such as blockchain, artificial intelligence (AI), and machine learning (ML). This commitment to continuous learning allows Indonesian engineers to maintain global competitiveness.

High Job-Hopping Rate

In Indonesia, many engineers frequently change jobs in pursuit of career advancement and salary increases. This forces companies to continuously focus on talent acquisition and development. While job-hopping is common, it also raises the market value of engineers and increases opportunities for skill enhancement.

Looser Attention to Detail

Compared to Japanese engineers, Indonesian engineers tend to be less detail-oriented. This can impact project progress and completion quality, so Japanese companies must consider this aspect in project management. Using clear instructions and checklists is essential for ensuring quality control.

Limited Japanese Language Proficiency

Few Indonesian engineers speak Japanese. Most rely on English for communication, so when Japanese companies collaborate with Indonesian engineers, English is typically used as the common language. To secure Japanese-speaking talent, offering Japanese language training programs or supporting proficiency tests can be effective.

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Comparison of Vietnamese Engineers and Indonesian Engineers

Indonesia and Vietnam are both gaining attention as major IT talent suppliers in Southeast Asia. Engineers from both countries have their own unique strengths and characteristics.

Education and Skillset

• Indonesia: Bandung Institute of Technology (ITB) and the University of Indonesia (UI) are top universities that produce many highly skilled engineers. They are proficient in various programming languages and the latest technologies.
• Vietnam: Major educational institutions include Hanoi University of Science and Technology (HUST) and Ho Chi Minh City University of Technology (HCMUT). Strong skills in programming languages such as C++, Java, and Python.

Salary and Rates

• Indonesia:
  • Junior engineers: IDR 5,000,000 – 10,000,000 (USD 350 – 700) per month.
  • Senior engineers: IDR 20,000,000 – 35,000,000 (USD 1,400 – 2,500) per month.
• Vietnam:
  • Junior engineers: USD 500 – 1,000 per month.
  • Senior engineers: USD 1,500 – 3,000 per month.
  • Vietnamese engineers’ salaries vary based on experience and skills, generally slightly higher than in Indonesia.

Cultural Characteristics

• Indonesia: Generally pro-Japanese, obedient, and kind. Values politeness and teamwork. However, they tend to be more laid-back and not as strict in their work ethic.
• Vietnam: Known for being diligent and responsible. Very open to new technologies and quick to adapt. Many are career-driven and proactive in salary negotiations.

Innovation and Technology Trends

• Indonesia: Strong startup ecosystem with unicorn companies like Gojek and Tokopedia, fostering innovation. Excels not only in offshore development but also in creating its own services. Additionally, as one of the world’s largest social media markets, Indonesians are highly sensitive to new global technology trends.
• Vietnam: Strong in offshore development, excelling at meeting client-specific requirements. Extensive experience in software outsourcing. Additionally, many engineers are skilled in Japan-specific technologies such as Ruby.

Indonesian and Vietnamese engineers both have great potential and diverse skill sets, making them highly competitive globally. While Vietnam is often associated with offshore development, understanding each country’s strengths and selecting the right talent for a project is key to success.

 

Problems in the Japanese Engineer Market

In recent years, the term “DX (Digital Transformation)” has been frequently heard, but there are several challenges in the Japanese engineering market.

Shortage of Talent

In Japan, the demand for IT engineers is rapidly increasing, but the supply is not keeping up. The government has announced that there will be a shortage of 790,000 engineers by 2030. As a result, many companies are unable to secure the necessary talent, leading to project delays and a decline in quality. In particular, there is a shortage of highly skilled engineers, putting Japan at a disadvantage in global competition.

Work Environment

Long working hours have become the norm for Japanese engineers, and their work-life balance is considered poor. This has led to a high turnover rate and reduced workforce mobility. Overwork and stress also cause health problems, leading to decreased productivity.

Delay in Adopting New Technology Trends

Japan is often slow in responding to new technology trends, which poses a risk of declining global competitiveness. There are concerns about delays, particularly in fields such as cloud computing and AI. Additionally, as Japan’s society continues to age, the engineering workforce is also aging, making engineers who can handle new technologies increasingly scarce. Japanese companies need to invest more in technological innovation and human resource development.

Lack of Global IT Talent

Japan’s IT industry lacks IT professionals with a global perspective. In particular, the hiring of foreign engineers and those with international experience has not progressed. This is due to language barriers and cultural differences. Even in offshore development, there are not enough bridge engineers or project managers who can coordinate work between Japanese and foreign teams. As a result, Japanese companies lack competitiveness in international projects, leading to delays in innovation.

 

 

Rising Offshore Development Costs Due to the Impact of Yen Depreciation

What is Yen Depreciation?

Yen depreciation refers to the phenomenon where the value of the Japanese yen declines against other major currencies. As the yen weakens, the amount paid in yen increases, leading to higher costs for imported goods and overseas services. This means that Japanese companies must spend more yen on overseas transactions and outsourcing.

Background of Offshore Development

Offshore development involves outsourcing software development and IT services to overseas companies for cost reduction and securing technical expertise. Many Japanese companies conduct offshore development in countries such as India, Vietnam, and Indonesia. These countries offer lower labor costs compared to Japan and have a large pool of highly skilled professionals, making offshore development a widely adopted strategy.

Rising Development Costs Due to Yen Depreciation

With the depreciation of the yen, the development costs that Japanese companies pay to offshore development firms rise in yen terms. Below are specific impacts:

• Increased Costs: Due to yen depreciation, even when paying the same amount in dollars or local currency, the required amount in yen increases. For example, if the exchange rate changes from 1 USD = 100 JPY to 1 USD = 120 JPY, a development cost of 10,000 USD increases from 1,000,000 JPY to 1,200,000 JPY.
• Budget Constraints: The impact of yen depreciation puts pressure on corporate budgets, making cost reductions and budget management essential. In large-scale projects that span long periods, exchange rate risks become a major challenge.
• Contract Renegotiation: To account for exchange rate fluctuations, it is crucial to include clauses that consider currency risks when forming contracts. This allows companies to respond flexibly to sudden yen depreciation.
• Decline in Competitiveness: As yen depreciation reduces the cost advantages of offshore development, Japanese companies may experience a decline in international competitiveness. To counter this, selecting offshore development partners with efficient processes and advanced technical capabilities becomes crucial.

 

 

How to Hire Indonesian Engineers

Recruitment Process

Hiring Indonesian engineers is commonly done through local recruitment agencies and online platforms such as LinkedIn, JobStreet, and Indeed. Additionally, participating in Indonesian IT events and career fairs can be effective. These platforms and events provide opportunities to connect directly with talented candidates.

Interview and Evaluation

During the hiring interview, not only technical skills but also communication skills and cultural adaptability are assessed. Online coding tests and practical exams can be used to verify candidates’ actual skills. Furthermore, teamwork and problem-solving abilities are also emphasized.

Employment Contracts and Benefits

In Indonesia, employment contracts for engineers typically include a base salary, bonuses, health insurance, and leave policies. Offering remote work and flexible working hours can also be attractive to top engineers. Companies can retain top talent and boost motivation by providing competitive benefits packages.

 

Famous IT Universities in Indonesia

Indonesia has many excellent science and engineering universities that provide high-quality education. The major universities include:

• Bandung Institute of Technology (ITB): Indonesia’s top engineering university, producing many outstanding engineers. ITB is particularly known for its expertise in engineering and technology, and its graduates are highly regarded both domestically and internationally.
• University of Indonesia (UI): Located in Jakarta, UI is renowned for its diverse academic fields. Its engineering faculty is known for high-quality education and research, producing engineers who work for global companies.
• BINUS University: A highly-rated private university, especially in computer science and information technology. BINUS offers one of the most advanced IT programs in Indonesia and has produced many skilled programmers and engineers.
• Gadjah Mada University (UGM): Located in Yogyakarta, UGM is one of Indonesia’s oldest universities. It covers a wide range of disciplines and is particularly well-respected for its engineering and technology education.

These universities play a significant role in Indonesia’s technological innovation and development and are recognized by global companies.

 

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Popular Offshore Development Hubs in Indonesia

Indonesia is also a popular destination for offshore development, with several key cities standing out:

• Jakarta: As the capital and largest economic city of Indonesia, Jakarta is rapidly developing as a technology hub with many IT companies and startups. The city offers an ideal environment for engineers and entrepreneurs, with numerous coworking spaces and technology events. Additionally, Jakarta is home to many large corporations and business opportunities.
• Bandung: Known for its high educational standards and a strong pool of talented engineers, Bandung is an attractive city for technology companies. With the presence of the Bandung Institute of Technology (ITB), the city fosters innovation, supported by young tech professionals and researchers.
• Surabaya: Indonesia’s second-largest city and a growing technology hub. Surabaya is also known as a center for shipping and manufacturing, and its IT industry is expanding rapidly. Many IT companies in the city focus on developing new technologies and services.
• Yogyakarta: A cultural and educational center, Yogyakarta produces many young talents and skilled engineers. Home to Gadjah Mada University (UGM), the city offers high-quality IT education. The number of IT startups is increasing, creating a dynamic and creative environment.
• Bali: Although primarily famous as a resort destination, Bali has recently become popular among technology companies and digital nomads. The combination of a relaxed environment and an international community fosters innovation. With many coworking spaces, Bali is an ideal location for remote work.

These cities have well-developed infrastructure, making them attractive offshore development hubs for foreign companies.

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IT Engineers Working at Timedoor

At Timedoor, we have been developing domestic websites and mobile applications in Indonesia for the past 10 years, as well as handling offshore development projects from Japan.

Over the years, we have recruited and trained more than 100 Indonesian engineers.

Most of our Indonesian employees first spend three years at a specialized high school, where they build a strong foundation in IT, before advancing to a science and technology university. During their university years, they gain real-world experience through internships or part-time work at Timedoor, and many of them eventually join us as full-time programmers.

By the time they start working as fresh graduates, they already have 4-7 years of programming experience, along with hands-on industry experience from their internship or part-time roles. This allows them to contribute as immediate assets to our projects. Additionally, since they are still young, they have a keen interest in emerging technologies like AI and blockchain and are highly motivated to learn independently.

As a company, we support these young talents in honing their technical skills while also helping them improve their soft skills, such as communication and management, through training programs. Since we also handle Japanese projects, we instill in our engineers Japan’s meticulous attention to detail, such as ensuring pixel-perfect designs. This enables them to meet global development standards and deliver high-quality work.

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Summary

Indonesian engineers possess a high level of education and diverse skill sets, playing a crucial role in the rapidly growing IT industry. While salaries and rates vary depending on experience, skills, and location, they generally offer high-quality labor at reasonable costs. Their cultural background, work ethic, and adaptability to new technologies make them highly attractive, and they are also well-regarded in international projects.

Hiring Indonesian engineers can be an effective solution to Japan’s engineering workforce challenges. By gaining a deeper understanding of Indonesia’s top technical universities and key development hubs, companies can establish a more efficient recruitment and collaboration strategy.

If you are interested in offshore development in Indonesia, please feel free to contact us.

 

 

 

FAQ

Indonesian Engineers – Skill Level, Salaries, Rates, and Characteristics

Q: What is the education level of Indonesian engineers?

A: Indonesian engineers study computer science and engineering at local universities and vocational schools. Top universities include Bandung Institute of Technology (ITB), University of Indonesia (UI), Binus University, and Gadjah Mada University (UGM), which provide a high standard of education.

Q: What skill sets do Indonesian engineers possess?

A: They are proficient in various programming languages (Java, Python, JavaScript, C++, etc.), web development (HTML, CSS, React, Vue.js, Angular, etc.), mobile app development (Kotlin, Java, Swift, React Native, etc.), database management (SQL, MongoDB, etc.), and cloud computing (AWS, Google Cloud, Azure).

Q: What is the salary range for Indonesian engineers?

A: Salaries vary based on experience, skills, and location:

• Junior Engineers: IDR 5,000,000 – 10,000,000/month (~$350 – $700 USD)
• Mid-Level Engineers: IDR 10,000,000 – 20,000,000/month (~$700 – $1,400 USD)
• Senior Engineers: IDR 20,000,000 – 35,000,000/month (~$1,400 – $2,500 USD)

Q: What is the minimum wage in Indonesia?

A: The minimum wage varies by region. In Jakarta (2023), the minimum wage is IDR 4,416,186/month (~$310 USD). Engineer salaries generally exceed this amount.

Q: What are the cultural and personality traits of Indonesian engineers?

A: They are known for being friendly, cooperative, and team-oriented. Many are pro-Japan, polite, and easy to work with. Additionally, many engineers are proficient in English, allowing for effective communication in international projects.

Q: What is the typical work style and workplace environment for Indonesian engineers?

A: Remote work is increasingly common in Indonesia, with many engineers working from home or co-working spaces. Companies offer flexible working hours and remote work options, emphasizing work-life balance.

Q: Is job-hopping common among Indonesian engineers?

A: Yes, many engineers frequently change jobs to advance their careers and increase salaries. Companies need to focus on talent retention and continuous training.

Q: How should companies handle the lack of attention to detail among Indonesian engineers?

A: Compared to Japanese engineers, Indonesian engineers may be less detail-oriented. To address this, companies should provide clear instructions, use checklists, and strengthen project management and quality control processes.

Q: How many Indonesian engineers speak Japanese?

A: Few engineers speak Japanese. Most communicate in English, making it the common business language when working with Japanese companies.

Q: How does the weak Japanese yen (JPY) impact offshore development costs?

A: A weaker yen increases offshore development costs in yen terms, leading to higher expenses, budget constraints, contract renegotiations, and reduced competitiveness.

Q: Which Indonesian cities are popular for offshore development?

A: Jakarta, Bandung, Surabaya, Yogyakarta, and Bali are popular offshore development hubs due to their strong IT infrastructure and concentration of tech companies and startups.