Labor Market Information System (LMIS)

Context and Problem

In Indonesia, information gaps limit job seekers’ understanding of skills in demand and make it difficult for employers to find qualified workers. Additionally, graduating students and job seekers cannot find the right employers. For the employers, this leads to high search costs, and for the employees, this means time wasted looking for a job, uncertainty, and confusion. Due to COVID-19, this issue was exacerbated. The lack of an interface for employers and employees to coordinate and find the right connections required a solution, and this is where LMIS came in.

Solution

By definition, LMIS is a system to coordinate the collection, processing, storage, and dissemination of labor market information. The LMIS acted similar to LinkedIn and had key features. First, Job Matching. This helps individuals find jobs and makes it more convenient for firms to publish job postings. Second, career and skills guidance connects workers with education and training opportunities. Third, Government Support Links individuals with government programs like active labor market programs (ALMPs). Additionally, the World Bank supported Indonesia in building a more advanced LMIS by providing a framework, conducting data pilots, and identifying essential functions.

Impact

Since 2019, the Indonesian government has rolled out various LMIS tools, including AyoKitaKerja and KarirHub, which align with global best practices to improve job intermediation. The successful implementation of four data pilots focused on occupations and skills has delivered crucial insights into skills shortages and job market demands, informing future job training and education programs. As of the latest data, 35 critical occupations have been identified as key to Indonesia’s economy, demonstrating the effectiveness of the LMIS.

Note: Studies and Analysis have to be carried out to understand the exact impact of the LMIS.

The LMIS framework and its essential functions hold the potential to be scaled across more regions in Indonesia or adapted to other countries with similar labor market challenges, particularly those needing to improve job matching and skills guidance. The LMIS-Hub model is also highly replicable in other developing countries and focuses on enhancing job intermediation services. The successful implementation of data pilots offers a blueprint for expanding labor market data collection, paving the way for a more efficient and effective labor market.