Indonesia has been ranked 2nd most attractive outsourcing destination and among the top ten outsourcing country in the world. The country is known for its abundant human resources, high-quality, reasonable price, and speedy execution. However, adding new employees is a challenge to most International companies due to the local's high demand and unemployment. In this blog, we are going to share some highlights and tips on how to effectively hire employees in Indonesia.
By Shubhangi Mishra, Komal Munshi, Kalpana Negi, Anmol Kumar, and Mohd Junaid
Download Our Free E-Book: Hire Local and Expats in Indonesia
Hiring Trends in Indonesia
Indonesia is the largest economy in Southeast Asia and has a booming population, ranking 4th in the world. A large proportion of the workforce is young, talented, and dynamic. Whether you're an employee planning to work in Indonesia or an employer expanding in Indonesia, you should understand the recruitment and staffing-related nuances of the country.
Figure 1: Indonesia's GDP growth rate
In 2022, the country anticipates 5.1% economic growth. According to PricewaterhouseCoopers, the country could become the world's 4th-largest economy in terms of purchasing power by 2050. Indonesia aspires to be a high-income country by 2045 through its Master Plan for Acceleration and Expansion (MP3EI), which is divided into five-year segments and runs until 2025.
The current five-year plan prioritizes infrastructure and social services such as education and health care. Because of improvements in public health, unemployment has dropped to 5.83%. Although some factors, such as uncertainty about the new COVID-19 waves, rising inflation, and the general global economic situation, could slow the economic recovery.
Employment in Indonesia
Figure 2: Workforce in Indonesia
Unemployment in Indonesia
Figure 2: Unemployment rate in Indonesia
Skilled and experienced professionals are in demand. According to the government, digital technologies could add between 20-45 million new jobs in the long term.
Among the sectors that saw growth despite (or because of) the pandemic are transportation and warehousing, FMCGs, and healthcare services. The reskilling program launched by the government is helping the country improve the availability of skilled workers.
Internet Reach in Indonesia
Figure 3: Internet Penetration Rate in Indonesia
The growth of e-commerce and technology, including fintech, automation, and artificial intelligence, is creating demand for a wide range of qualified candidates. Hiring will also be active in banking, engineering, and the renewable energy sector. Green energy is expanding, and skilled professionals in this field will be sought.
Foreign Employee in Indonesia
Figure 4: Number of foreign workers in Indonesia based on their position
Visa Type of Foreign Employee in Indonesia
Figure 5: Temporary stay visa issuance type
Definition of Labour and Workers
The law defines manpower as the individuals required to perform a job before, during, and after the work is completed. The term worker is referred to as ‘Pekerja’, whereas a job is referred to as ‘Tenaga Kerja. He or she is compensated for the services provided, such as wages.
This definition is critical when applying for the correct visa. A person with a business visa cannot work in the country because receiving compensation is prohibited.
Duties of an Employer
While employers have the right to expect accurate and timely service from their employees, they must also perform their duties faithfully. We are highlighting a few:
Discrimination of any kind is prohibited, and Indonesians and expatriates are treated equally.
Increase worker competence by providing or encouraging on-the-job training.
Follow the termination procedures (Terminating an employee in Indonesia can be a long, tedious, and expensive process.)
Respect the working hours, holidays, and overtime policies.
Provide employees with mandatory benefits such as social security and health insurance.
Only withhold the appropriate amount of income tax on behalf of the employees.
Follow the law's guidelines for wages and other benefits.
Process foreign employees' work permits
Certain regulations, however, do not apply to foreign workers, and the law does not expressly state such distinctions. As a result, organisations must rely on other laws. The Ministry of Manpower and Transmigration, for example, issued Regulation No. 35 issued in 2015. It describes how expatriate workers are used. The same ministry's Decision No.40 from 2012 specifies the positions that foreign employees are not permitted to hold.
Types of Employment in Indonesia
Local employees in Indonesia can work for either a definite or an indefinite period of time. The definite-period arrangement means that the contract can end at any time or under any conditions. According to the law, this is only permitted when the work is seasonal. It can also be used when the job is temporary or during the product development phase. The contract should state the date or circumstances under which it can be considered complete.
Employers can only renew such a contract once. The duration can be up to two years, and the job cannot be completed within the time frame specified in the agreement. However, there must be a month's gap between the implementation of the new contract and the old agreement.
Expatriate workers, on the other hand, are usually in a unique situation. They are technically under contract because of their work permit, but the employer cannot immediately extend or renew the contract. Foreign nationals must renew their work permits, which are only valid for 1 year.
Full-time employees are also entitled to all of the benefits outlined in the law. Local part-time and fixed-term workers have the same rights and benefits as full-time employees. A company can also hire a staffing agency to outsource the workers.
Requirements To Hire Employees In Indonesia
Many Asian countries have complicated employment and payroll laws and regulations. Indonesia has a surprisingly well-defined employment and legal framework, but the nuances must be understood in detail.
Although the laws are well-defined, there are numerous applications at both the national and provincial levels. The law also provides significant rights and benefits to all contracted employees, which must be appreciated.
The requirement that all documentation be in Bahasa Indonesia is understandable and expected, but it is frequently a stumbling block for foreign companies.
You would need a representative office or a PMA company to hire employees in Indonesia. This company or Representative Office and any local employee must sign a contract for either a fixed-term or an open-ended term. The company will then handle payroll, and taxes will be remitted directly to the government.
Overview of Employee Hiring Options in Indonesia
For an international company, establishing a PMA company in Indonesia is costly and time-consuming. There are two types of companies that can be formed:
To establish a foreign investment company, a significant investment plan is required, as well as a minimum paid-up capital of 2.5 billion rupiahs (USD 166,000). It can also take several months to get up and running.
A Representative Office is easier and less expensive to establish, but its scope is limited. It is unable to engage in commercial activities, issue invoices, or sign contracts.
Using a local Professional Employment Organization (PEO) on your behalf is an alternative to establishing a local company. A company of this type will hire employees and manage contracts, benefits, and payroll. This can be used instead of or in addition to forming a corporation.
Why establish a foreign investment company in Indonesia
Indonesia has two major advantages that only a few countries can boast: it has the most people in Southeast Asia and a population that will remain young for the foreseeable future.
Indonesia's economy is also reliant on foreign investment to meet its growth targets. That is why businesses want to expand into this country.
However, when it comes to expansion, you will need to hire local employees sooner or later. Hiring in Indonesia, whether for locals or expatriates, comes with a set of rules that every company must follow, and establishing a PMA company is one of them. There are startups, such as Talent’d by WorldRef, that make it easier for businesses to hire and staff employees without having to set up a Permanent Entity.
Employment laws and regulations
The Omnibus Law, which comprises various amendments to the Manpower Law, was introduced by Indonesia in 2020.
Wage Laws and Regulations
For The 1st year of employment, all employees are entitled to the minimum wage. Wages are determined by both the employer and the employee after the first year.
There is no national minimum wage; instead, the applicable minimum wage is determined by the type of business and its location. Indonesia has 33 provinces, and the governor of each province sets a monthly wage rate based on recommendations from the Provincial Council on Wages. It is also possible for a regency (a region within a province) to set its own minimum wage, as long as it is not higher than the provincial minimum wage. A 2018 regulation (the Minister of Manpower and Transmigration Regulation) established an official formula for calculating this wage in Indonesia based on inflation and GDP growth (Refer Table1: Monthly Minimum Wages Across Major Regions in Indonesia 2021 in Annexure 1 for more details.)
There are also sector-specific minimum wages. These wage rates are set by business groups within a province or regency and cannot be lower than the provincial or regional wage.
Employers are required to make two types of social security deductions in addition to income tax deductions: they must contribute to the badan penyelenggara jaminan sosial (the health security system or BPJS) and to the employment BJPS, which covers work accidents and the old age pension.
Holidays and paid leave
Workers are entitled to all public holidays under the Manpower Law. The Joint Ministerial Decree determines public national holidays each year. Indonesia, for example, will observe 16 national holidays in 2022.
Employers who require employees to work on federal holidays must pay overtime.
Every employee is entitled to 12 days of paid annual leave, with one day accruing for every 23 days worked. Employees must use their minimum paid vacation entitlement within 6 months or risk losing it. Paid leave is taken at the discretion of the employee, with the exception of one 6-day consecutive leave per year, which is required.
Employees who have worked for the same company for 6 years would be entitled to at least 2 months of paid leave in their seventh or either year of employment.
Companies, on the other hand, have the right to postpone employees' annual leave, but the reason must be obvious (for example peak season, or mandatory attendance days). These requirements are detailed in the PP/Company Regulations.
Sick Leave
Workers are entitled to sick leave with medical documentation at the following pay rates:
Full pay for the first 4 months of sick leave;
3-quarters pay for the next four months;
Half pay for the next 4 months; and
1-quarter pay until the employer terminates employment.
Women are also entitled to 2 days of paid leave during menstruation.
Contractual Employment - PKWT
PKWT (Perjanjian Kerja Waktu Tertentu, or Fixed Time Employment Agreement) is a relatively new employment policy. According to the PKWT regulation, Law Number 35, Year 2021, PKWT is an employment agreement between workers and employers to establish a working relationship within a specific time or for a specific job.
Workers who do permanent work in companies, in contrast to those who are on a temporary role, have the status of PKWTT (Perjanjian Kerja Waktu Tidak Tertentu or Indefinite Time Employment Agreement).
There are several pointers for PKWT employees:
A PKWT contract must be in writing.
Workers must keep the original documents after signing the PKWT.
The contract requires that all workers' rights be respected.
Try to value all wage components in a single wage value.
The salary must be in accordance with the rules.
Permanent Employment Agreement- PKWTT-: Indefinite Employment Agreement
A PKWTT (Perjanjian Kerja Waktu Tidak Tertentu), also known as an Employee Agreement for an Indefinite Period, is a permanent employment agreement or contract. Unlike PKWT (Perjanjian Kerja Waktu Tertentu), PKWTT may require a probation period of no more than 3 months, during which the employer is required to pay the employee's wages.
PKWTT can be made verbally or in writing. If the PKWTT is made verbally, the clauses between employer and employee are those specified in the applicable labor law. Employers are not required to register PKWTT with the Manpower Office or any other related labor institution/agency in Indonesia.
required
Fixed Term Contract (PKWT) | Permanent Contract (PKWTT) |
Applies to the following types of work:
| Applies to the type of work not stipulated for PKWT, mostly work not stipulated with characteristics of permanence |
No Probation Period | Probation Period max. 3 months |
Made in Writing | Made in Writing or verbal |
Registered to manpower office located in employers regency/city | No registration needed |
Required in Bahasa (Bi Lingual) | Required in Bahasa (Bi Lingual) |
Minimum Wages and Working Hours in Indonesia
Working Hours in Indonesia
In Indonesia, regular working hours are 40 hours per week, either 7 hours per day for 6 working days per week or 8 hours per day for 5 working days per week.
Overtime working hours rule
Employers must pay overtime if employees work more than 7 hours in 6 working days or 8 hours in 5 working days, or if employees are required to work on weekends or public holidays. Working hours over 4 hours per day and 18 hours per week are not permitted.
Overtime work hours | Overtime pay calculation |
Overtime on weekdays | 1.5 times the hourly wage for the first hour and 2 times hourly way for the following hours |
Overtime on weekly holidays or public holidays: | 1. Companies with 5 working days: 2 times the hourly wage for the first 8 hours, 3 times the hourly wage for the 9th hour, and 4 times the hourly wage for all hours after that. 2. Companies with 6 working days: 2 times the hourly wage for the first 7 hours, 3 times the hourly wage for the 8th hour, and 4 times the hourly wage for all hours after that. |
The hourly wage is calculated by multiplying 1/173 by the monthly wage.
Overtime pay is not available to employees who work as "thinkers, planners, implementers, or controllers," and their hours cannot be regulated. However, they are usually entitled to higher pay.
After 4 hours of continuous work, all employees are entitled to a 30-minute break. Workers on a 5-day week have the right to take Saturdays and Sundays off, while those on a 6-day week have the right to take Sundays off.
At more than $300, Jakarta has by far the highest provincial minimum wage. The government sets the minimum wage for each of Indonesia's 34 provinces. In 2022, wages will go up in Indonesia, but not by much.
Figure 6: Minimum wages per month across Indonesia, 2022
*Indonesia's Minimum Wage has been updated on January 1, 2022.
Employment benefits packages in Indonesia
Salary structure across regions
The average monthly salary in Indonesia is 12,100,000 Indonesian Rupiah, which equates to roughly $837 USD. Along with the average wage, this salary parameter takes into account benefits such as housing, insurance, and commuter compensation.
Figure 7: Salary distribution structure in Indonesia
What's an average wage?
The average wage is an employee's base salary. Unlike the average salary, it does not include benefits such as transportation costs, medical insurance, and so on.
In other words, an average monthly wage only takes into account the compensation employees receive each month. The average monthly salary, on the other hand, includes all the benefits that workers get from their jobs over the course of a month.
And, while average wages are one of the best indicators of economic growth, they cannot be used to determine a country's economic strength.
Other factors to consider include:
1. Median Salary
In Indonesia, the median salary is IDR 11,400,000 (USD 788).
This means that half of the Indonesian population earns more than IDR 11,400,000, while the other half earns less.
2. Salary Range
The average salary in the country ranges from IDR 3,070,000 (minimum salary) to IDR 54,200,000 (maximum salary). The lowest salary in Indonesia will be less than the lowest average, while the highest salary will be greater than the highest average.
3. Salary Percentile
The 25th percentile in Indonesia is IDR 6,520,000 (USD 450). This means that 25% of the country's population earns less than IDR 6,520,000, implying that 75% of the population earns more than that amount.
Similarly, the country's 75th percentile is IDR 30,800,000 (USD 2,129). In addition, the 90th percentile is IDR 99,671,317 (USD 6,916).
4. Minimum Wage
A country's minimum wage is the lowest wage that an employer can pay an employee. This parameter varies from city to city due to changes in the cost of living, local wages, labor availability, and so on.
As a result, the minimum wage in each province of Indonesia varies. The provincial wage council, a board composed of the government, trade unions/labor unions, and employers, determines the provinces' minimum wages.
Indonesian Average Salary Comparison
The average salary in Indonesia depends a lot on a person's education, experience, job, and where they work.
Let us compare the average salary based on the following criteria:
1. Experience
A fresh graduate's basic salary will be the lowest, as it is in other countries.
Employees with 2 to 5 years of experience typically earn 32% more than entry-level employees.
Employees with more than 5 years of experience earn 36% more than those with less than 5 years of experience.
Professionals with more than 10 years of experience earn 21% more than those with less than 5 years of experience. When an employee reaches the experience age of 15, their salary typically increases by 14% over their 10-year salary.
Figure 8: Salary hike by years of experience
2. Education
A worker with a certificate or diploma earns 17% more than a high school graduate.
Those with a Bachelor's degree earn 24% more than those with a certificate or diploma. Furthermore, an employee with a Master's degree earns 29% more than their peers with a Bachelor's degree.
For the same job, PhD holders typically earn 23% more than Master's degree holders.
Figure 9: Salary hike by education in Indonesia
3. Increment and Bonus
Most Indonesian employees are likely to receive an 8% salary increase every 18 months. This is high when compared to the global average of 3% every 16 months.
However, the rate of advancement varies by industry and increases with the employee experience.
Figure 10: Bonuses and Increments in Indonesia
Here is a list of some notable industries' average increment rates:
Figure 11: Average salary increment rate in Indonesia
Indonesian employees receive bonuses in addition to annual salary increases. 49% were given a monetary bonus ranging from 3% to 5% of their annual salary.
Employees in the marketing, architecture and sales fields receive higher bonuses than those in the construction or hospitality industries.
4. Job
Because of differences in demand, the average salary for different professions varies.
Some services in the country are more important than others.
Here is a list of average monthly salaries for various professions:
Figure 12: Average monthly salary for various professions
5. City
The average salary in Indonesia varies by city due to varying levels of industrialization. Cities with fewer businesses have lower wages.
Here is a list of average monthly salaries in various cities across the country:
City | Average Monthly Salary |
Jakarta | IDR 13.8 mln |
Surabaya | IDR 13.6 mln |
Bandung | IDR 13.4 mln |
Tangerang | IDR 12.9 mln |
Malang | IDR 11.9 mln |
Please keep in mind that these figures are averages based on salary reports from Indonesian employees, including expats. As a result, they may differ depending on factors such as experience, location, industry, and so on, and should only be used as a general guideline.
Now that we've seen the various average salary comparisons in Indonesia, let's see how they compare to other countries' average salaries.
Salary negotiations frequently refer to the offer of a net or gross monthly salary. The employer pays the employee's income tax (PPH 21), social and health insurance (BPJS) contributions with a net payment.
The majority of Indonesian job applicants, particularly junior employees, state their expected salaries as a "take-home-pay" or a net salary.
Festive Holiday Leave (THR)
Tunjangan Hari Raya (THR) is a non-wage income that employers must pay to employees or their families prior to religious holidays in Indonesia. This THR must be paid 7 days prior to the religious holiday.
Eid al-Fitr for Muslim workers, Christmas for Catholic and Protestant workers, Nyepi for Hindu workers, Vesak for Buddhist workers, and Chinese New Year for Confucian workers are the major religious holidays in Indonesia.
Insurance and Social Security (BPJS) Types
All Indonesian residents, including expats, who have been in the country for 6 months or longer are required to obtain BPJS Kesehatan (Healthcare BPJS). The company provides BPJS to protect all of its employees.
Both the ‘Healthcare BPJS’ and the ‘Social Security BPJS’ are required. Anyone who lives in Indonesia and works for an Indonesian company must have one of the two types of BPJS. They provide various services to insurance holders.
Social Security (BPJS Ketenagakerjaan) in Indonesia
This BPJS type is required for all businesses. If you own a business, you must enrol all of your employees in ‘BPJS Ketenagakerjaan’.
Otherwise, if you work in Indonesia, your employer is required to provide you with the service of obtaining a Social Security Card. Any independent Social Security BPJS member can also register as a freelancer.
You will have basic protections for the following if you have a Social Security Card :
JHT (Jaminan Hari Tua/Old Age Protection)
JKK (Jaminan Kecelakaan Kerja/Workplace Accident Insurance).
Death Protection (Jaminan Kematian).
JP stands for Jaminan Pensiun/Pension Protection.
Healthcare (BPJS Kesehatan) in Indonesia
This BPJS type provides holders with some healthcare benefits, including:
Basic Healthcare Provider.
Service for Advanced Healthcare.
Service for Hospitalization.
Employers and employees are required to contribute to these programs on a monthly basis, as a percentage of the employee's regular monthly salary/wages. The Government of Indonesia (GOI) reserves the right to change these contributions at any time.
The mandatory contributions in 2022 are summarized below:
Income Tax in Indonesia
Employers have three options for calculating personal income taxes:
Employee salaries are classified as gross, and tax is calculated on this, withheld from the employee, and paid to the tax office through the banking system.
Employee salaries are classified as Net and then grossed up to establish a gross amount from which tax is calculated to return the remainder to the net amount stated in the employment letter.
The tax is calculated on a net basis and is considered a fringe benefit.
Employers must ensure that their expatriate employees have followed the most recent policies and paid the appropriate income tax to avoid penalties. Employers should be aware of three types of tax subjects for foreign workers:
Domestic tax subjects for foreigners who stay in Indonesia for less than 183 days in a calendar year.
Foreign taxation applies to foreigners who stay in Indonesia for more than 183 days in a calendar year.
Non-taxpayers include foreigners who stay for less than 183 days and do not earn any income, as well as expatriates listed in Article 36 of Law Number 36 of 2008.
All expatriates living in Indonesia are required to register with the tax office and obtain their own separate tax number (NPWP), as well as pay monthly income taxes, file annual tax returns, and pay tax on income earned outside of Indonesia, less tax paid in other jurisdictions on the additional overseas income.
Individual Tax Rates
The following are the standard tax rates on taxable income received by resident taxpayers:
People who do not have a tax number (NPWP) pay an additional 20% tax on top of the progressive income tax rates listed above.
Figure 13: Taxable income and tax rate in Indonesia
Deduction
Depending on the taxpayer's personal circumstances, the following personal deductions are available for resident individual taxpayers in calculating their taxable income.
Description | Amount Per Year |
|---|---|
Taxpayer | IDR 54.00 mln |
Spouse | IDR 4.5 mln (IDR 54.00 mln more for a wife whose income is combined with her husband's) |
Dependents | IDR 4.5 mln each (up to three individuals related by blood or marriage) |
Occupational Support | 5% of gross income up to a maximum of IDR 6.0 mln |
Contribution to approved pension fund, e.g. BPJS Ketenagakerjaan | Amount of self-contribution |
Compulsory tithe (“zakat”) or religious contributions | Actual amount, if valid supporting evidence is available and certain conditions are met. |
JOB PORTALS IN INDONESIA
Job boards are platforms that allow you to advertise your open positions in order to attract qualified candidates to your company. The top seven job boards in Indonesia are listed below. These job boards will significantly reduce your hiring costs while also simplifying the hiring process.
If a user is posting a job for the first time, they can do so for free on this job board. Through Jobstreet, users can connect with more than 10 million talents in Indonesia.
Pros:
The job site offers free postings in some regions.
In some regions, employers can purchase branded job ads for enhanced job post visibility.
Employers benefit from AI-powered candidate matching technology.
Application management tools are included.
The site features integrated candidate sourcing via JobStreet's partnership network.
Embedded industry data is included in all job posts.
Job posting includes an option to choose free screening questions from a list.
Cons:
Resume views are limited to varying degrees on all plans.
Advanced candidate searches require a separate subscription.
Limited candidate profiles for heavy engineering related industries.
Most profiles are from Malaysia.
Jobindo, one of Indonesia's most well-known job boards, was established in 2005. Both employers and job seekers can use it for free. This employment board is basic and simple to use.
Pros:
The design of the site is attractive and clear
On the homepage there is a large sign up section to encourage users to register
We can do a quick search with the lists of recent or popular job offers, newest company, location or category
There is also a premium job offer section if you wanted to boost the visibility of your offer
A link to a blog page with advice and guidance is also on the homepage
Language options are English and Bahasa, but the English option does not work, so for international users this site isn't great .
Cons:
Advanced candidate searches require a separate subscription.
Limited candidate profiles for heavy engineering related industries.
One of the top job boards around the globe is Indeed. Users may regularly attract millions of people to their jobs by using Indeed. Indeed provides both sponsored and unsponsored job listings. Users may also access their resume database to select the best applicant for open positions.
Pros:
Easy to search relevant jobs by keywords, title, industry, and location. Plus an advanced filter option to narrow down results.
Suitable for posting for all kinds of work including internships, freelance, and part-time
Candidates can upload and store their resumes to quickly apply for jobs
Daily job alert emails notify candidates of new job posts relevant to their search
Indeed is mobile-friendly and even has a downloadable app, both advantageous as increasing job searches are done via mobile devices.
Free and premium job posting
Cons:
As new jobs are added every second, job posts have high competition.
Free job postings move down in the search results and lose visibility over time.
Limited candidate profiles for heavy engineering-related industries and other specialized jobs.
One of the earliest job boards in business, Monster gives employers access to a top-notch recruiting platform.. To advance its hiring process, Monster offers extra services like AI in Recruiting, Data Security, Power Security, and many others.
Pros:
Good for promoting freelance, contract, and part-time work
Job searches can be easily filtered by keywords, title, company, or location
Job ads are automatically refreshed every 14 days when choosing a 60-day posting option.
Job Fit Scoring shows candidates the jobs that are most relevant to their interests and skills
Candidates can upload their resumes for a free assessment
Job seekers can set up job alert emails to be notified when new relevant jobs posts are added
The free Monster app makes it easy for candidates to search and apply from mobile devices
Cons:
No free job posting
Fewer job filters than other large job boards (No salary or experience-level search filter)
Limited candidate profiles for heavy engineering-related specialized industries and other specialized jobs.
Another of the top job posting websites for companies throughout the world is Jora. Employers from all around, including those in Indonesia, use this free job advertising website that is managed out of Australia and is powered by SEEK. Jora is the platform to use if you're seeking a simple, affordable choice.
Pros:
Jora allows employers to post up to 10 free job ads per month.
The platform aggregates job ads from partner job boards and career sites.
Job ads are reviewed and screened to ensure that they are not fraudulent.
The platform features XML feed integration.
The website operates in 36 countries worldwide.
Jora features native mobile apps for both iOS and Android.
The platform has a dedicated U.S. career portal.
The website features a blog with helpful resources for both employers and job seekers.
Cons:
The platform lacks a resume database of candidates.
Jora does not promote listings on any social media channels.
The site lacks advanced recruitment features, such as applicant tracking and candidate screening tools.
Limited candidate profiles for heavy engineering-related industries and other specialized jobs.
Glints is a Singapore-based online portal for hiring professionals. The business was established in 2015. More than 3 million professionals and 50,000 organisations have access to Glints. Offers low-cost candidate sourcing, candidate management, offer negotiation, screening, testing, and assignments, as well as interview scheduling.
Pros:
Employers can post unlimited jobs for free.
An applicant tracking system is provided.
Company profiles can be created.
A dedicated assistant is available to help with hiring.
The site recommends candidates for roles.
Employers only pay for premium services when a candidate is found.
Cons:
Employers have to schedule a consultation before they are able to purchase a premium package.
Pricing structures are unclear
Employer branding solutions from Glassdoor assist users in recruiting job seekers. It makes it simpler for users to hire engaged, knowledgeable applicants.
Candidates from Glassdoor have a 30% higher retention rate and a 2x higher chance of getting recruited than those from other job sites. Users can simply post jobs for free, and those that choose sponsored posts receive 14 times as many clicks and 10 times as many applications.
Pros:
Glassdoor rates organizations (1-5 stars) based on several factors. Job seekers can accurately research companies so they know what to expect, even before the interview.
Not only can you read company reviews from current and past employees but you can also search industry salaries and benefits, company interview tips, and read their career advice blogs.
On each job posting, Glassdoor alerts you if it is a “Hot,” “New,” a “Top Company,” or “Hiring.” This allows job seekers to sense if the job is highly desired by others.
At the bottom of your results page, Glassdoor gives recommended searches like popular areas and popular companies for jobs relating to your search.
Cons:
Glassdoor lacks advanced search options compared to the other job search websites.
Like any online review website, some company testimonials left by individuals may be fake feedback.
Limited candidate profiles for heavy engineering-related industries and other specialized jobs.
Workforce and HR Consulting Services
Why should you take help scaling in Indonesia?
1. Unavailability of Talent for a number of industries including Heavy Engineering
It is comparably difficult to find a talented workforce for industries like heavy engineering. Either one has to put considerable resources and time into finding the right, or one will have to hire expats.
2. Inefficient education system
The education system of Indonesia is quite outdated. It is not producing as many specially skilled workers as is required to grow the economy. Even though the startup ecosystem has started evolving over the last couple of years, it is not common to find special skills such as software development.
3. Taxation System
Each year, 51 tax payments have to be made, which takes an average of 259 hours of company time. A 25% corporate income tax takes 75 hours to process, and another 184 hours are needed for social security contributions and VAT.
4. Culture
Many employers end up struggling with scaling and maintaining the quality of their workforce simply because they don’t understand the nuances of local culture. Indonesians prefer to be treated with a lot of patience and calmness. Employees often switch jobs at the slightest provocation.
5. High Rate of Attrition
Generally, employees in Indonesia can switch jobs for very small incentives. Retaining employees is a challenge, hence the high attrition rate especially at junior levels.
6. Low English Penetration
Compared to other SEA countries such as the Philippines, where English is spoken by almost everyone, it hasn't spread beyond a small group of professions in Indonesia. This makes it very tedious for foreign companies to hire English speaking workforce in Indonesia. Although Bahasa Indonesia is a simple and beautiful language that non-natives can start speaking fluently within one year.
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What Should Be Included in an Employment Contract?
Employment Agreement
An employment agreement in Indonesia can be categorised into a fixed-term employment contract (temporary employment contract) or an indefinite-term employment contract (permanent employment contract).
An indefinite-term employment agreement may provide for a probation period of up to three months. In the event an indefinite-term employment agreement is made verbally, the employer is required to provide a letter of appointment to the employee.
The letter shall contain at least the following information:
(i) the employee’s name and address,
(ii) the date the work commences,
(iii) the type of work, and
(iv) the employee’s proposed wages.
Fixed-term employment agreements are subject to more strict requirements than indefinite-term employment agreements. A fixed-term employment agreement must be in writing and in the Indonesian language. The parties typically provide the English version of a bilingual agreement. A fixed-term employment agreement cannot include a probation period. A fixed-term employment agreement that is based on a certain period of time (unlike seasonal contracts, etc.) may last for up to two years, and may be fixed-term “extended” once for a maximum period of one year. Then, after a grace period of at least 30 days, it can be “renewed” one time for a maximum period of two years.
What Should an Employment Contract Have?
Both employee's and employer’s names
Job title and job description
Date of job commencement
Pay rate and pay date
Overtime pay
Working hours
Holiday and annual leave entitlement
Location of work (especially when a company has more than one location or site)
Sick pay
Period of notice in the event of resignation
Template of Indefinite-term employment contract (Permanent employment contract)
TEMPLATE 1: Indefinite-term employment contract
Download and use this template
TEMPLATE 2: Indefinite-term employment contract
Download and use this template
TEMPLATE 3: Indefinite-term employment contract
Download and use this template
Template of fixed-term employment contract (temporary employment contract)
TEMPLATE: Fixed-term employment contract
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