Salary Increases Become Rare Amid Economic Pressures

Amid economic challenges and global uncertainty, only 24% of companies in Indonesia raised employee salaries in line with or above inflation throughout 2024. This finding is part of the Hiring, Compensation, and Benefits 2025 report published by Jobstreet by SEEK Indonesia.

Wisnu Dharmawan, Sales Director at Jobstreet by SEEK, noted that the figure has dropped sharply compared to the previous year. “Last year, around 86% of companies gave salary increases, now only about 75% still do. And those offering increases over 10% have decreased,” he explained.

Most companies now limit pay raises to between 1% and 5%, while more employers are opting not to increase salaries at all. Wisnu described this as a sign that salary increases are becoming increasingly rare and valued.

Even with slowed wage growth, companies are seeking other ways to reward employees. The report shows that average bonuses rose from 2.4 months of salary to 2.9 months.

“Bonuses are more flexible. If performance is good, they can increase. In tough times, they can be reduced. That’s why bonuses are increasingly used as a compensation strategy,” said Wisnu.

The report, based on feedback from over 1,200 HR professionals, also revealed that 44% of companies are beginning to factor inflation into salary decisions. However, only a third have actually managed to match or surpass inflation in their wage adjustments.

“This shows that companies are aware of the rising cost of living, but not all have the financial means to respond,” Wisnu added.

This is happening alongside a stronger wave of cost-cutting. In 2024, 42% of companies reported layoffs, a rise from 28% the year before. Still, 90% of firms are either maintaining or increasing their workforce.

Wisnu emphasized that companies are becoming more selective in hiring and more strategic in designing compensation structures—especially with the rise of contract and part-time roles.