JAKARTA – President Prabowo Subianto’s plan to abolish the outsourcing system in Indonesia has received praise from various sectors, including economists and business players. This move is seen as a progressive effort by the government to create job security and improve the welfare of workers.
Esther Sri Astuti, Executive Director of the Institute for Development of Economics and Finance (Indef), revealed that the abolition of outsourcing will encourage companies to hire outsourced workers as permanent employees. This is seen as important for providing job security and protecting the basic rights of workers.
“The abolition of outsourcing could have an impact where companies will inevitably hire outsourced workers as permanent employees, giving them job security and improving their welfare,” said Esther.
However, Esther also reminded that this policy must be accompanied by the financial readiness of companies, as hiring permanent workers will add costs such as providing wages in line with regional minimum wages (UMR) and offering social security.
President Prabowo himself reaffirmed his commitment to abolishing outsourcing in his speech during International Workers’ Day (May Day) celebrations at the National Monument Square in Jakarta. The President will form the National Labor Welfare Council, which will be tasked with finalizing the transition process of this labor system without disturbing the investment climate.
As a follow-up, Minister of Manpower Yassierli stated that his ministry is preparing a ministerial regulation on outsourcing in line with the President’s direction. “The policy outlined by the President during May Day 2025 regarding outsourcing will certainly serve as a fundamental policy in the preparation of the Ministerial Regulation,” said Yassierli.
Support for the abolition of outsourcing also comes from the business sector. PT Nusa Halmahera Minerals (NHM), a gold mining company in North Maluku, had already abolished the system since 2020 under the ownership of national entrepreneur Haji Robert.
The Chairperson of the SPKEP SPSI NHM Workers’ Union, Rusli A. Gailea, stated that since the abolition of outsourcing, all contract workers have been hired as permanent employees. This has had a positive impact on the welfare and job stability of the workers.
“Before, there was no job security or social security. Now, after becoming permanent employees, workers have access to BPJS, career advancement, and job security,” he said.
NHM’s move has become a concrete example that companies can continue to grow while providing the rightful benefits to their workers. The Chairperson of PB GSBM NHM, Rudi Pareta, stated that this policy aligns with President Prabowo’s vision and serves as a model for other industrial sectors.
With the government’s commitment and examples from industry players, the abolition of the outsourcing system is expected to mark the beginning of a major change in Indonesia’s labor world. This policy is seen as capable of creating a fairer, more humane labor system that favors workers’ welfare across all sectors.
