How Much of a Salary Increase Do Employees Get with Promotions in Indonesia? Here’s the Latest Overview
A job promotion is one of the most anticipated moments for many employees. Beyond signaling recognition for their performance, promotions often come with increased responsibilities and, of course, a salary raise. But how much of a salary increase do companies in Indonesia actually give when promoting employees?
According to the latest report from Jobstreet, 62% of employers in Indonesia granted promotions to their employees throughout 2024. This figure is slightly lower than the previous year, which reached 67%. Although there’s a slight decrease, this data shows that promotions remain an important strategy for companies to maintain employee motivation and retention.
How Big Are Salary Increases During Promotions?
The majority of employees who were promoted received a salary increase of more than 6%. However, there’s an interesting trend: the proportion of employees receiving smaller raises (1–5%) increased compared to the previous year. This indicates that while promotions are still being offered, not all salary increases are substantial.
“The majority of employees who were promoted received a salary increase of more than 6%, although more employees received smaller raises of 1% to 5% compared to the previous year,” Jobstreet stated in its report.
This reflects an adjustment in compensation strategies by many companies, particularly amid economic challenges and tighter budgets.
Why Promotions Still Matter for Companies
Even though salary increases are not always large, promotions remain a highly valuable step in the workplace. Here are several reasons why promotions have a significant impact on both employees and employers:
- Boosting Employee Motivation
Promotions serve as tangible recognition of dedication and contributions. When employees feel appreciated, they tend to be more motivated, loyal, and eager to deliver their best work. - Driving Career Growth
For employees, promotions are a crucial part of career development. A higher position means greater responsibilities, broader learning opportunities, and naturally, higher income. - Benefits for Employers
From a company’s perspective, promoting employees helps retain top talent. Employees who see a clear career path within the company are less likely to leave. Additionally, promoted employees already understand the company culture and systems, making the transition into their new role faster and more efficient.
“Nevertheless, promotions remain a positive step to motivate employees to stay with the company and pursue career growth, which ultimately benefits employers,” Jobstreet added.
Bonuses Still Play a Big Role
In addition to promotions and salary raises, bonuses remain a key motivator for employees. The same report found that nearly 80% of companies provided some form of bonus throughout 2024.
Performance bonuses remain the most popular type. The average bonus amount even rose to around three months’ salary, higher than the previous year. This shows that even if salary increases are slowing down, companies are still finding ways to keep employees satisfied and loyal.
The Role of Recruitment Companies in Promotion and Retention Strategies
Amid the changing job market, many organizations are partnering with recruitment companies or employment agencies to design more effective human capital strategies. Recruitment firms can assist in developing competitive compensation structures, identifying internal talent ready for promotion, and providing market insights on salary trends across industries.
One of the leading employment agencies in Indonesia is RecruitFirst Indonesia. With extensive experience and networks, RecruitFirst Indonesia can be a strategic partner for companies aiming to strengthen their promotion, retention, and recruitment strategies.
Read more: What Is Silent Layoff and How Does It Affect Employees?
Conclusion
Promotions remain a critical factor in building employee loyalty and motivation in Indonesia. Although the number of companies granting promotions fell from 67% to 62% in 2024, this practice is still a core part of human resource strategies. Most promoted employees received salary increases of over 6%, but more companies are also opting to give smaller raises of 1–5%.
Additionally, bonuses continue to be a significant incentive, with about 80% of companies offering them and the amounts increasing to the equivalent of three months’ salary.
For companies seeking to build effective promotion and retention strategies, partnering with a professional recruitment company like RecruitFirst Indonesia can be a smart move.
Contact us to find out how we can help your organization recruit, develop, and retain top talent.
