7 Human Resource Management Challenges when Doing Business in Indonesia

Human resource management in Indonesia is a tough job as it requires immense dedication and responsibility towards the organisation. This guide will show you the seven human resource management challenges when doing business in Indonesia.

Top 7 HR Management Challenges in Indonesia

1. Compliance

Regulations, particularly the ones related to employment, are often adjusted in Indonesia. For example, the minimum wage in Jakarta in 2020 is IDR 4,276,349, while in 2019 it was IDR 3,940,973. In time of COVID-19, employment insurance (BPJS Ketenagakerjaan) contribution has been relaxed by the government since August 2020. It may be overwhelming to keep updated with the latest regulations.

An external expert team of human resource management in Indonesia can make sure that you comply with laws in these areas: employment, salaries, taxes, and audits. With professional help, you can avoid all the fines and penalties, as well as reputational damages due to non-compliance.

2. Compensation and Benefits

Attractive compensation and benefits are one of the key components to ensure higher employee satisfaction and retention, as well as more successful talent recruitment.

However, most small businesses or medium organisations are having a hard time keeping up with the compensation and benefits requirements of their employees. Oftentimes, it is difficult for these companies to compete with the benefits and compensation offered in large corporations.

But, outsourcing your HR makes compelling benefits and compensation possible since the provider has a large network to negotiate for a better deal in employee benefits such as insurances.

3. Recruitment

Hiring and recruitment can be extremely expensive and time-consuming if your in-house team does not have the ability or capacity to do so. Your team has to handle everything from posting the job vacancies and screening candidates to interviewing them and finally welcoming them to the company.

An HR outsourcing firm helps manage your hiring and recruitment according to your budget and talent requirements. These professionals also have a large talent pool to find you the right candidate that is best suited for specific positions in the shortest time.

4. Administrative Tasks

It is impractical to handle your administrative tasks manually if you have a large number of employees. You are also putting a lot of pressure on your internal employees if you don’t have a sizable HR team.

Third-party HR consultants are what you need when manual administrative tasks have become a burden or even impossible. By utilising the latest technology, an HR professional can help you prepare payroll, make timesheets, manage employee leaves and holidays, and safeguard employee data efficiently. They can also assist in drafting employment contracts and company policies that are in compliance with the law.

5. Culture

Company culture is paramount for almost every business and an HR outsourcing provider can help create a healthy and positive company culture. An internal team can help build a good company culture only when you have a small team.

However, there is a time when your business has to expand and the growing number of employees will make maintaining harmonious company culture through an in-house team unattainable. Bad company culture can bring forth unwanted conflicts, mismanagement, and eventually poor retention.

6. Training and Development

Organisations will have less headache when finding the ideal training and development resources for their different levels of employees via HR outsourcing. Training and development programs are critical to boosting employee’s motivation, skill, and productivity.

7. Retention

If you don’t retain your employees, your competitors will. Employees can jump ship pretty fast when they realise that their employers don’t appreciate them, they don’t get the benefits and development opportunity they deserve.

An HR outsourcing firm can ensure higher retention by managing all your HR matters such as employee compensation and benefits, payroll, training, and culture.

Online Payroll Services and Other HR Outsourcing Services in Indonesia with Cekindo

Through Cekindo’s human resource management services in Indonesia, businesses can gain access to professional skills, knowledge, and support necessary to tackle the complex HR issues.

As one of the most prominent HR outsourcing consultants in Indonesia, Cekindo focuses on keeping you on the right side of the law and ensuring employee satisfaction and retention. We achieve these goals by creating or refining your HR procedures, policies, employment contracts, and culture, not to mention our top-notch online payroll services in Indonesia.

Cekindo believes in assisting businesses to reach their full potential through our human resource management solutions in Indonesia. We also offer ongoing solutions and value to your business through our diverse business services.

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