Educational Mismatch and Human Capital Underutilization in Indonesia: A Talent Allocation Perspective
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Abstract
Indonesia's education-employment mismatch is usually discussed as a labor-market imbalance. That view is necessary but incomplete for human resource management because educational-occupational mismatch does not show whether an employee's usable capability is deployed inside the organization. This study develops a talent-allocation interpretation through a critical narrative synthesis of secondary evidence. Indonesian evidence from Statistics Indonesia, Sakernas-based studies, and the World Bank is combined with 27 DOI-verified journal articles published between 2020 and 2026. The analysis separates objective educational mismatch from perceived overqualification and uses the latter only as an organizational lens on how employees may respond after placement. The evidence suggests that educational mismatch is best read as an allocation signal rather than direct proof of wasted human capital. Underutilization becomes an HRM problem when relevant capability remains unused and the organization offers no credible route toward more demanding work. Wage penalties, lower job satisfaction, boredom, and quit behavior can accompany this condition, but these outcomes depend on job content and employment opportunities inside the firm. The article defines talent allocation failure as persistent underuse of relevant capability without an effective mechanism for redeployment. This framing moves the Indonesian mismatch debate from credential matching toward the quality of capability use.
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