INDONESIAN UNDERGRADUATE ECONOMIC REVIEW

Volume 2 Issues 1 No.6 (7 pages)

Lifetime Employability : Sharpen Indonesian Human Resources to Reduce Poverty

Sandy Irawan1, Gadis Argi Kiranti2
Indonesia University of Education,Bandung - West Java Indonesia
sirawan304@gmail.com1, gadisargikiranti@student.upi.edu2
Accepted : October 28, 2016
Indonesian Undergraduate Economic Review 2016

ABSTRACT

INTRODUCTION

Based on Badan Pusat Statistik (BPS) Indonesia is a

populous country with 254,9 million people has a big
potential in human resource, but in terms of quality,
Indonesia has a lower quality. The 2015 Global
Innovation Index (GII) ranks Indonesia 97th out of
143 countries in terms of innovation capability.
Employability means the ability of employees to
carry out various tasks and functions properly.
Employability is the individual ability to fulfill a
variety of functions in a give labor market.Indonesia
should be more attentive towards lifetime
employability.
We
found
that
lifetime
employability could make high economy growth,
the concept employability gave an organization to
perform optimally in global markets so that
Indonesian economic will grow significantly to
overcome poverty. This paper focuses on three
question: why lifetime employability is able to
sharpen quality Indonesia human resource? How can
lifetime employability affect to the economics
development? what program should be held to
achieve the goal of lifetime employability? all of
these questions can emerge the solution about
enhancement Indonesia human resource quality for
achieving economic growth till no poverty in
Indonesia. This paper concludes with some research
question based on theoretical about employability.

Indonesia is the country that is famous for its natural

resources are abundant both in the sectors of energy,
food, and infrastructure, but the wealth has not been
able to make Indonesia become a developed nation,
but with the potential of Indonesian natural resources
abundant Indonesia could be a nation respected in the
world , What would be the problem? Most people
assume that the cause is the inability of the
government in managing resources both in terms of
policy-setting natural resources management.
Indonesia is a populous country with 254,9
million people has a big potential in human
resource, but in terms of quality, Indonesia has a
lower quality. The 2015 Global Innovation Index
(GII) ranks Indonesia 97th out of 143 countries in
terms of innovation capability. With the number of
Indonesian society that many have the notion that
too many people become increasingly difficult to
manage the natural resources that exist to be difficult
to apply policies that are intended for the
livelihood of many people. Indonesia should be
more active in improving its human resources it will
greatly benefit the Indonesian labor market because,
according to the Central Statistics Agency (BPS)
recorded that as many as 46, 301, 470, as employees
and as many as 20, 392, 400 have their own business.
If Indonesia focuses on improving to human
resources is not impossible Indonesia into an
economic power that is globally competitive
through the labor market. We need a new
program to fulfill the needs on improving
Indonesian human resource, so the problem lies in
human resources or human capital, I assume that if
Indonesia human capital is increase significantly,
economic growth will also increase.

Keywords : Employability, Economic Growth,

Lifetime Employability, Human Resource

Published online : November 14, 2016 (Vol.2 Issues1)

In order to achieve the increase human capital,

there is a concept that we call lifetime employability,
it is the new concept of lifetime employment. The
main point is lifetime employability could make
labor still employable all time. The purpose of
lifetime employability achieved when marked by
increasing human capital of Indonesia. However,
there must be support from the government to set
rules for the implementation of lifetime
employability to any company or institution in order
to clear the direction of this program.
Lifetime Employment
Before the advent of Lifetime employability there is
a concept of lifetime employment, first appeared in
Japan after the second world war era, it is a
characteristic of the labor system where a company
employs its employees until retirement. Kato(2001)
It is often argued that the Japanese labor market
possesses several distinguishing characteristics,
especially when it is compared to the US
counterpart. Among those, it is pointed out that many
Japanese firms have a unique management style
which assures high job security for their workers
a practice often referred to as lifetime
employment.The system developed out of the
dynamic interactions among labour, management,
and government in response to the changing
environment after the war. The practice evolved
gradually into a cluster of HRM (Human Resource
Management) policies, which was further reinforced
by endogenous formation of labour laws, state
welfare system, and social norms (Moriguchi and
Ono 2004). Ishida (2005). We then argue that
lifetime employment, defined as above, can be
supported as an equilibrium outcome even when
workers are risk neutral. Two effects arise from a
commitment to lifetime employment. First, the
return to exerting effort necessarily increases under
lifetime employment. As a result, firms can lower the
cost of inducing effort. Second, a commitment to
lifetime employment also has an external effect on
the average quality of unemployed workers, which
significantly affects the prospect of reemployment.
As more firms are committed to lifetime
employment, the average quality of unemployed
workers deteriorates and this perception seriously
limits the prospect of reemployment. A critical point
worth emphasizing is that the magnitude of the first
effect depends on the value of the outside option,
namely, the prospect of reemployment. But Arai
(1998) argued that this system is suitable for a
Confucians society like Japan because it brings

along security job, trust building between workers

and management, stability of the company for long
term business planning, and avoidance of human
resources competition between companies. Okazaki
(1996) argued that lifetime employment system is
believed to be one of three pillars, along with the
seniority wage system enterprise unionism, that
support Japans economic development. The Japan
Trade Union Confederation (Rengo) (2007) stressed
the important of long-term job security as opposed
high pay. In scientific management theory, jobs are
deskilled, reducing the labour value and bringing
down cost(Fulop and Linstead 1999:225). In
lifetime employment, the system is an iron-cage,
boring, repetitive; a rigid structure based on seniority
instead of performance. The system produces
inhumane working conditions, psychological
trauma, and poor quality of work life. The body
becomes the working machine, a mercenary, and
a slave to a machine system (Alvesson and Deetz
200:135). The system is carceral (Alvessson 1994;
Foucault 2000).It is carceral because employees are
in organization all their lives, theyre not willing
to move in other firms. Focault (2000) described
these organizational practices as an institutional
framework of incarceration. Ritzner (2000) likened
this type of HRM system to the McDonaldization
society. Japans lifetime employment system like
a: Cellular system of locating and concentrating
individuals [salaryman] in space, a timetable for
activity, manuals for the correct movement of the
body, and a precise economical system of command,
individuals become cases who measured,
described, evaluated, examined, and compared.
Real lives are converted into written case notes. In
short, the body loses its mistery (Burrell, 1998:19).
Critics say the system is prison-like and does not
encourage high labour productivity (Clark 1987;
Katz 2006). What do all these things mean to the
Japanese economy? We believe that the Japanese
employment system developed over time during the
postwar era and was well-established and deeprooted in the Japanese society as a coherent cluster
of complementary employment practices by the end
of the high growth period. It probably contributed
significantly to the rise of the Japanese economy
(Aoki, 1990, Koike, 2005, Morita, 2005). So far
the lifetime employment is a system that is not
relevant in the present era, as lifetime employment
does not give individual freedom in developing his
career because human nature tends to develop itself
and humans also have a sense of boredom, it is feared
will have no effect on the quality of the workers.
Therefore, lifetime employment has decreased,

INDONESIAN UNDERGRADUATE ECONOMIC REVIEW

Volume 2 Issues 1 No.6 (7 pages)

especially in Japan and in several countries. And I

assume if this system is applied to Indonesia,
Indonesian workers will have difficulty developing
and Indonesia rank in the Global Innovation Index
will also be difficult to climb to the top ranking and
will be susceptible to downgrades. Instead, there is a
renewal of the concept of lifetime employment that
is lifetime employability. And the point is the
concept where the lifetime employability how
individuals have the ability to be employable in longterm, in the sense of a concept to improve individual
skills in the workforce.
Lifetime Employabolity
Companies
today cant
promise
lifetime
employment, but they can help employees ensure
lifetime employability.- Jeanne C. Meister
As was explained earlier that the lifetime
employability is a new idea in developing individual
skills and the implications will be able to fulfill the
supply of human capital that is effective and efficient
for Indonesia and will help positive economic growth.
During the past decade, attention to research and
practice in employability has increased specifically in
the United Kingdom and Europe in terms of social
policy (McQuaid & Lindsay, 2005) and in the United
States in terms of individual skill development and
adaptability (Fugate & Ashforth, 2003). In the core
definition, employability is described as the personal
aptitude to carry out work. The focus is on the actual
employability of people. Employability is
theindividual ability to fulfil a variety of functions in
a give labour market. Groot and Maassen van den
Brink (2000). Currently, lifetime employability is
emphasized. A basic definition of employability is
where employers provide interesting jobs and
opportunities to develop skills . . . [for a] mobile
career (Pearce & Randel, 2004, p. 82). The key goal
for an organization is to provide its workers with the
ability to continually retool their skills and
knowledge (Meister : 2007). Being an expert and
maintaining ones expertise and employability are
by no means easy tasks. However, the potential of a
given organization to perform optimally in global
markets depends on employees capabilities to
develop, cultivate, and maintain fundamental
qualifications. Job qualifications are continuously
changing at an ever-increasing rate (Schnabel, 2000).

Published online : November 14, 2016 (Vol.2 Issues1)

A characteristic of these changes is that not only do

they produce new expertise needs but also, at the same
time, they create new opportunities for learning
(Thijssen, 2008). The main aim of employability and
the policy of promoting it, was still to achieve full
employment, but as a result of increasing
unemployment attention shifted from factors relating
to attitude towards aspects of knowledge and skills
(Feintuch, A. 1955). It means employability make the
people are still employable as well. Employability
may be defined as follows: The possibility to survive
in the internal or external labor market (Thijssen,
2008). The notion of employability is very important
for every individual, one who mastered the concept of
employability it will be easy to survive in the world of
work. For an individual worker, employability is an
indicator of his or her opportunity to acquire and to
keep an attractive job in the internal or external
labor market (Thijssen, 2008). In the publications
from the 1950s and 1960s, employability served a
primarily economic purpose, that of achieving full
employment (Forrier; 2003). as a labour market
instrument, but rather as an HR instrument to optimise
the deployment of staff within companies (Forrier;
2003). Since the 1990s, attention has shifted back to
employability as a labour market instrument.
However, the focuses of attention have altered
compared with the 1960s and 1970s (Forrier; 2003).
In the 1990s and beyond, employability was a concern
at the level of the individual employee. In this
period, employees own responsibility for career
development and their ability to cope with changes in
the internal and external labor markets have been
increasingly emphasized. On one hand, the latitude
and freedom of choice for career self-management
have increased considerably. On the other hand,
the protection offered by intraorganizational career
claims and by chances for promotion based on
seniority has decreased. Currently, this is the case for
the employees belonging to the primary segment of
companies, a segment that has been reduced in many
countries (Brewster, 1998). From some literacy has
been known that the lifetime employability is an
instrument that became a benchmark for the HRD
employs someone for employability is considered
important in an era of increasingly tight labor market
competition between countries. Thijssen (2000)
distinguishes between three objectives. Employability

is an indicator of the chance of work. In this sense,

work can have three distinct meanings :
a. Work, in the sense of employment, as seen
from the point of view of society and above
all of the government.
In this case, employability is an indicator of
the chance of full employment.
b. Work, in the sense of the employment of
employees, seen from the point of view of an
organisation. For an employer, employability
is an indicator of the possibility of matching
labour supply and demand.
c. Work, in the sense of an (attractive) job, seen
from the point of view of the individual. For
an individual, employability is an indicator
of the chance of a job or a career.
Employability is the key to economic development
because basically economic growth can occur by the
increasing of human capital, in spite of the natural
resources in Indonesia is overflow, if human capital
in Indonesia is weak, management will not be equally
effective and efficient, as evidenced by the many
foreign services in Indonesia in processing cracked
natural resources , Thus the employability
competency should be used as a reference for the
development of individual skills or human capital.
Employability Competencies

Knowledge Society; New Demands on Higher

Education in Europe, 2004), both financed by the
European Commission, aim to study the conditions of
graduate employment and the links between
universities and the labour market, and the role
competencies play in this relationship (Schomburg,
2007). They analyzed the role of universities in the
development of social knowledge and skills that make
graduates employable. Employability depends on
continuous learning, being adaptable to new job
demands or shifts in expertise, and the ability to
acquire skills through lateral rather than upward
career moves in varied organizational contexts
(Scholarios et al., 2008). Competency development
refers to those activities carried out by the
organization and the employee to maintain or enhance
the employee's functional, learning and career
competencies (Forrier & Sels, 2003). Organizations /
companies which either is an organization that can
provide good benefits to members / employees, where
he could develop his full potential in the organization
without fear of being fired or protect themselves from
mistakes. Said the organization gives good impact
if development financially also good because it
makes good financial side is its own employees. It is
clear that employability is an important concept to be
applied by organizations and educational institutions,
human capital because in essence the one who will
bring significant changes if it has a good skill.
Human Capital

Professional competencies are a key factor in gauging

how employable a graduate is. They are also a
requisite complement to the academic curriculum
vitae and essential to the job selection process
(Bradley and Nguyen, 2004; Freire and Teijeiro,
2010). These key competencies can be obtained
Human capital has a direct effect on economic growth
through experience, training or more informal means
because individuals with more education are more
(Garca- Aracil and Van der Velden, 2008; Hartog,
productive and inno-vative leading to the creation of
2001; Rychen and Salganik, 2003). There are many
new products and improving theproductivity of
argued literacy study employability competencies and
factors (Romer, 1990; Benhabib and Spiegel,
all have a common goal in itself. Such as Cotton
1994;Teixeira and Fortuna, 2011; Bodman and Le,
(2001), for instance,observes that employers require
2013). Human capital is the driver of Research and
generic
competencies
such
as
teamwork,
Development (R&D),which enhances innovation and
communication skills or problem solving skills, in
technological progress, thus lead-ing to increased
combination with specific competencies acquired
productivity and creation of new products
through experience or formal education. In
(Romer,1990; Benhabib and Spiegel,1994; Teixeira
developing the concept of lifetime employability to
and Fortuna, 2011;Bodman and Le, 2013). This
be applied in some institutions such as companies and
means that the more educated theworkforce of a
educational institutions, the need for a "party" which
country, the greater the benefits of the R&D activanalyzes
the
implementation
of
lifetime
ities in terms of economic growth. Human capital
employability formulation so that their guidance in
promotes theabsorption of new ideas (absorption
their implementation. Two important analyses, the
capacity) and products alreadycreated by other
CHEERS project (Careers after Higher Education
countries. This fosters a faster convergence
A European Research Survey, 1998) and the
ofeconomies by importing equipment and
REFLEX project (The Flexible Professional in the
technologies (Nelson and Phelps, 1966; Benhabib and
Spiegel, 1994; Bodman and Le, 2013). Finally, human capital also affects economic performance

INDONESIAN UNDERGRADUATE ECONOMIC REVIEW

Volume 2 Issues 1 No.6 (7 pages)

indi-rectly, most notably through its interconnections

with institutions.Human capital
accumulatio
contributes to shaping efficient poli-cies, less
violence and more political stability (Lipset, 1960;
Glaeseret al., 2004) and, therefore, fosters economic
growth. From some on literacy in mind that a good
human capital will bring better economic growth by
several methods such as lifetime employability.
Human capital improves the quality of labor,
increasing its productivity (Mankiw et al., 1992;
Wmann, 2003; Bodman and Le, 2013).
METHOD
The main method in this research is literacy study
that involves relevant and believable sources such
as scientific journals, reports, official data from from
related institution. The study is done by exploring,
analyzing
and
describing
about
lifetime
employability to sharpen human resources for

economic growth. The taken step on constructing this

paper are :
1. Problem and potency identification, especially on
lifetime employability and human capital.
2.
Relevant and trusted source exploration for
literacy study. The source are scientific journals,
reports, official data, etc.
3. Analyzing and discovering
4.
Arranging systematical description about the
research and its result through paper
Finally, economic growth is directly proportional
to the increase in human capital or human resource,
Indonesia with a human population that high would
be very beneficial if the management of human
capital or human resource runs overall in terms of all
workers and students have the human capital that is
good for the progress of a nation lies on human
beings themselves.

Here is the point of paper: Lifetime Employability

REFERENCES
Forrier, Anneleen, and Luc Sels. "The
concept employability: A complex
mosaic." International journal of
human resources development and
management 3.2 (2003): 102-124.
Thijssen, Johannes GL, Beatrice IJM
Van der Heijden, and Tonette
S. Rocco. "Toward the
Published online : November 14, 2016 (Vol.2 Issues1)

employabilitylink model:
current
employment
transition
to
future
employment perspectives."
Human
Resource
Development Review 7.2
(2008): 165-183.

Sanders, Jos, and Andries De Grip. "Training,

task flexibility and the employability
of low-skilled workers." International
Journal of Manpower 25.1 (2004): 7389.
GRIP, Andries, Jasper Loo, and Jos Sanders.
"The industry employability index:
Taking account of supply and demand
characteristics." International Labour
Review 143.3 (2004): 211-233.

Arai, K. (1998). "Values, co-operation and lifetime

employment." International Journal of Social
Economics, 25(2/3/4):399-309
Okazaki, Keiko. (1996). "A Measurement of the
Japanese lifetime employment system." Keio
Business Review, 33:105-115.
Burrel,

Kato, Takao. "The end of lifetime employment

in Japan?: Evidence from national
surveys and field research." Journal of
the Japanese and International
Economies 15.4 (2001): 489-514.
Recently, for instance, Kato (2001) shows some
evidence that lifetime employment is still
adopted by many Japanese firms.
Alvesson, Mats and Deetz, Stanley. (2000).
"Doing Critical Management Research.
London: Sage. Fulop, Linstead. (1992).
"Management for Australian Business : A
Critical Text. UK: Macmillan
Press.
Fulop, Linstead, and Linstead, Stephen. (1992).
"Management, A Critical Text. UK: Macmillan
Press. Foucault, Michel. (2000). "The Subject and
Power." Pp. 326-348. in J.D. Faubion, ed. Power:
The
essential Works of Foucault Volume 3. NY:
The Free Press
Jeanne C. Meister, (1998),"THE QUEST FOR
LIFETIME EMPLOYABILITY", Journal of
Business
Strategy, Vol. 19 Iss 3 pp. 25 - 28
Feintuch, A. (1955) Improving the
employability and attitudes of difficult to
place
persons,
Psychological
Monographs, Vol. 69, pp.392397.
Groot, W. and Maassen van den Brink, H. (2000)
Education, training and employability,Applied
Economics, Vol. 32, pp.573581.
Brewster, C. (1998). Flexible working in
Europe. In P. Sparrow & M.
Marchington (Eds.), Human resource
management: The new agenda (pp.
245-258). London: Pitman.

Gibson.
(1998).
"Modernism,
Postmodernism, and Organisational
Analysis: The Contribution of
Mitchel
Foucault:
Foucault,
Management, & Organisation Theory.
Edited by McKinlay, A, and Starkey,
K. London :Sage.

Clark, Richard. (1987). "The Japanese Company."

Japan: Tuttle.
Aoki,

Masahiko.
Information,
Corporate
Governance,
and
Institutional
Diversity: Competitiveness in Japan,
the USA, and the Transitional
Economies. Oxford and New York:
Oxford University Press, 2000.

Koike, Kazuo. Shigoto No Keizaigaku (Economics

of Work). Tokyo: Toyo Keizai, 2005.
Morita, Hodaka. "Choice of Technology and
Labour Market Consequences: An
Explanation of U.S.- Japanese
Differences." Economic Journal,
2001, 111(468), pp. 29-50.
McQuaid, R. W., & Lindsay, C. (2005). The
concept of employability. Urban Studies, 42(2),
197-219. Fugate, M., & Ashforth, B. E. (2003).
Employability: The construct, its dimensions, and
applications.
Academy of Management Proceedings,
J1-J6. Seattle: AOM.
Pearce, J. L., & Randel, A. E. (2004).
Expectations of organizational
mobility, workplace social inclusion,
and employee job performance.
Journal of Organizational Behavior,
25(1), 8198.
Schnabel, P. (2000). Maatschappij in beweging
[Society in movement]. In Herijken achter de
dijken,
verslag
van
het
jubilieumcongres van de SociaalEconomische Raad, 11 Oktober

INDONESIAN UNDERGRADUATE ECONOMIC REVIEW

Volume 3 Issues 1 No. (11 pages)

2000. The Hague, Netherlands: SociaalEconomische Raad.

Bradley, S., & Nguyen, A. N. (2004). The school
to work transition. In G. Johnes & J.
Johnes
(Eds.),
International
handbook of education economics
(pp. 484521). Cheltenham: Edward
Elgar.
Garca-Aracil, A., & Van der Velden, R. (2008).
Competencies for Young European
higher education graduates: Labour
market mismatches and their
payoffs. Higher Education, 55,
219239.
Freire, M., & Teijeiro, M. (2010).
Competences of graduates as
an indicator of external quality
assurance in universities.
Regional
and
Sectoral
Economic Studies, 10(3), 77
92.

Published online : November 11, 2016 (Vol.2 Issues1)

Rychen, S., & Salganik, L. H. (2003). Key

competencies for a successful life
and a well-functioning society.
Gottingen: Hogrefe and Huger
publishers.
Cotton, K. (2001). Developing employability skills.
Portland: Northwest Regional Educational
Research Laboratory.
Schomburg, H. (2007). The professional success of
higher education graduates. European Journal of
Education, 42(1), 3558.
Scholarios, D., Van der Heijden, B. I. J. M., Van
der Schoot, E., Bozionelos, N.,
Epitropaki, O., Jdrzejowicz, P., et
al. (2008). Employability and the
psychological contract in European
ICT sector SMEs. International
Journal of Human Resource
Management, 19(6), 1035
1055.
The Global Innovation Index. (2015). Retrieved from
https://www.globalinnovationindex.org/content/page
/data- analysis