Indonesia is currently in the middle of a massive experiment in public service reform, and to be honest, things are getting a bit messy. At the heart of the drama is the P3K, a new category of contract-based government employees. The original idea was great on paper: take millions of "honorary" workers who have been stuck in the informal shadows for years and give them official, formal status. But as the transition hits the ground in late 2025, that dream is bumping into some very harsh realities.

​The first big roadblock is a classic case of "who’s going to pay for this?" While the central government in Jakarta is the one calling the shots and making the hires, it is the local governments across Indonesia’s thousands of islands that have to balance the books. This became a major problem recently when federal funding for these areas was cut. Suddenly, local mayors and governors found themselves in a corner. To keep their budgets from collapsing, many had to slash the extra performance pay that these new employees were counting on. For the workers, the result is a stinging sense of widespread disappointment. They finally got the fancy government ID card they wanted, but their actual take-home pay has plummeted, creating widespread disappointment.

​Then there is the politics of it all. Let’s be real: hiring millions of people is a great way to win an election. Many of these mass hiring sprees were driven more by a desire to keep voters happy than by a real need for more office staff. Because of this, many regions are now "overstaffed but under-skilled." The government focused so much on just getting people onto the payroll that they forgot to check if they were hiring the right people for the right jobs. It is a bit like a ship with a massive crew where half the people don't know how to read the compass.

​This leads us to the skill gap. Since many of these new hires were brought in based on how long they had already been working rather than through a modern skills test, there is a huge digital divide. Indonesia is trying to move everything online, but many of these new contract employees haven't been given the training they need to keep up. Instead of a high-tech government, we are seeing a "mismatch" where talented professionals are stuck doing paperwork while technical roles go unfilled. The state fixed the legal status of the workers but forgot to invest in the workers themselves.

​On top of that, there is a new institutionalized two-tier class system within the civil service that makes things awkward. You have the permanent civil servants, known as PNS, who have total job security and a pension for life. Then you have the P3K workers who do the exact same job—sometimes even more of it—but have to worry about whether their contract will be renewed next year. This has created a bit of a toxic vibe in many workplaces. It is hard to stay motivated when you feel like a "second-class citizen" sitting right next to someone who has a much safer future.

​To try and save money, the government even came up with a "Part-Time" version of these jobs. While this was meant to prevent layoffs, it has basically created a group of people who are "officially employed" but still living in poverty. They have the prestige of working for the government, but their pay is sometimes lower than the local minimum wage. It is a strange paradox: a policy meant to give people dignity has, in many cases, just made their financial lives more complicated.

Well, I think for anyone watching from outside Indonesia, it is a clear reminder that simply passing a law doesn’t solve a problem if you don’t have the budget or the training to back it up.***

Indonesia is currently in the middle of a massive experiment in public service reform, and to be honest, things are getting a bit messy. At the heart of the drama is the P3K, a new category of contract-based government employees. The original idea was great on paper: take millions of "honorary" workers who have been stuck in the informal shadows for years and give them official, formal status. But as the transition hits the ground in late 2025, that dream is bumping into some very harsh realities.

​The first big roadblock is a classic case of "who’s going to pay for this?" While the central government in Jakarta is the one calling the shots and making the hires, it is the local governments across Indonesia’s thousands of islands that have to balance the books. This became a major problem recently when federal funding for these areas was cut. Suddenly, local mayors and governors found themselves in a corner. To keep their budgets from collapsing, many had to slash the extra performance pay that these new employees were counting on. For the workers, the result is a stinging sense of widespread disappointment. They finally got the fancy government ID card they wanted, but their actual take-home pay has plummeted, creating widespread disappointment.

​Then there is the politics of it all. Let’s be real: hiring millions of people is a great way to win an election. Many of these mass hiring sprees were driven more by a desire to keep voters happy than by a real need for more office staff. Because of this, many regions are now "overstaffed but under-skilled." The government focused so much on just getting people onto the payroll that they forgot to check if they were hiring the right people for the right jobs. It is a bit like a ship with a massive crew where half the people don't know how to read the compass.

​This leads us to the skill gap. Since many of these new hires were brought in based on how long they had already been working rather than through a modern skills test, there is a huge digital divide. Indonesia is trying to move everything online, but many of these new contract employees haven't been given the training they need to keep up. Instead of a high-tech government, we are seeing a "mismatch" where talented professionals are stuck doing paperwork while technical roles go unfilled. The state fixed the legal status of the workers but forgot to invest in the workers themselves.

​On top of that, there is a new institutionalized two-tier class system within the civil service that makes things awkward. You have the permanent civil servants, known as PNS, who have total job security and a pension for life. Then you have the P3K workers who do the exact same job—sometimes even more of it—but have to worry about whether their contract will be renewed next year. This has created a bit of a toxic vibe in many workplaces. It is hard to stay motivated when you feel like a "second-class citizen" sitting right next to someone who has a much safer future.

​To try and save money, the government even came up with a "Part-Time" version of these jobs. While this was meant to prevent layoffs, it has basically created a group of people who are "officially employed" but still living in poverty. They have the prestige of working for the government, but their pay is sometimes lower than the local minimum wage. It is a strange paradox: a policy meant to give people dignity has, in many cases, just made their financial lives more complicated.

Well, I think for anyone watching from outside Indonesia, it is a clear reminder that simply passing a law doesn’t solve a problem if you don’t have the budget or the training to back it up.***