Human resource is one of the important capital in developing a business. Unfortunately, there are still many companies who see it as one production component that should be pressed down, for an efficiency.
To anticipate thus, the government is trying to protect labor by applying minimum regional wage, which the government determines minimum wage for Indonesian workers in a region each year.
However, in Indonesia, it does not guarantee that a company will pay its employees based on the minimum wage. On the other hand, employees will often try to squeeze their company or even local government to increase the minimum wage each year.
Problems often arise because the minimum wage was not able to cover minimum living expenses, such as housing rent, transportation, and food, moreover to find a better life, like buying a house.
Alex Denni, Executive Partner Dinamis Human Capital saw the rule on the minimum wage is actually a short-term solution for countries that are transferring from poor countries to developing countries.
"If you seek justice, it is not about the minimum wage, but it is about the minimum ratios for each industry, and the ratio of compensation compared to total revenue of the company," he said.
To anticipate thus, the government is trying to protect labor by applying minimum regional wage, which the government determines minimum wage for Indonesian workers in a region each year.
However, in Indonesia, it does not guarantee that a company will pay its employees based on the minimum wage. On the other hand, employees will often try to squeeze their company or even local government to increase the minimum wage each year.
Problems often arise because the minimum wage was not able to cover minimum living expenses, such as housing rent, transportation, and food, moreover to find a better life, like buying a house.
Alex Denni, Executive Partner Dinamis Human Capital saw the rule on the minimum wage is actually a short-term solution for countries that are transferring from poor countries to developing countries.
"If you seek justice, it is not about the minimum wage, but it is about the minimum ratios for each industry, and the ratio of compensation compared to total revenue of the company," he said.
Currently there is still a gap in wage payment, there are companies claiming that they are to not able to pay the minimum wage, but the wage of their directors reach hundreds of millions of rupiah per year.
The minimum wage is usually received by workers with education level below S-1 or undergraduate degree, such as factory workers. Meanwhile, fresh graduate bachelor has average wage between IDR2.5 million to IDR3.5 million per month.
The number can be higher when people work at the top company, as they can get an average of IDR3.5 million to IDR4.5 million per month. There are companies which always making adjustments per year, but many are half-hearted in doing such thing. Then they only rise when there is inflation in main components.
As an illustration, for example, a company pays total income of IDR3.5 million consisting of IDR1 million as the basic salary, IDR1 million allowance, IDR1 million transportation, and the rest of the other components. The company will make an adjustment for inflation only for basic wage component.
Although people work for a living, Aex added, in Indonesia most people easily drop their jobs because they simply do not fit with their supervisors, such as unfair treatment and low career opportunity.
The second reason is to develop a career, earn a higher position, and the last reason is to seek better compensation system, other benefits, such greater insurance and also flexible working time.
"The turnover rate is normally around 10% - 12% depending on the industry, the high turnover today is micro banking, which reaches 40%, driven by high growth of micro financing business," he said.
Industry that provide the highest wages today are telecommunications, with an average wage of IDR2.6 billion per year for the executive level, about IDR400 million per year for the management level, and IDR4.5 million per month for fresh graduate.
Higher income also pocketed by executives who work in the finance and banking industry, while executives in FMCG industry have the lowest income compared with other industries.
Sari Cyenno Sari R. Soeriaatmadja, Owner PT Riyadi Reksase Nusantara (Cyenno Consultant), one of Indonesia's leading head hunter saw gap in salary is still exist, not only in every industries, but between local and expatriate labor.
"When compared to international standards, is still at the bottom, but from the quality, we can compete, as in some industries even the local people have a better ability to understand the market and implement the best strategy," she said.
Many Indonesian workers who are dare to pursue opportunities to move to another company after working 2 or 5 years. If it has been over 10 years, they will eventually settle on one company.
Employment system in Indonesia has actually improved but there are still some aspects that still need to be fixed. In terms of company's SOP which is still very weak, as there are a lot of regulations or guidelines that clearly define pitch as well the absence of an inadequate HIRS system although many are already going into that direction.
Other issues on the career path ate the rewards system as well as grooming system that are still become a homework for some local company in Indonesia. However, there are several local companies that have been very successful in implementing its employment system even they are better than the multinational company.
"The importance of training and people development are not yet realized in Indonesia, although when we compare to the last 10 years, it has been a lot of progress from this side," she said
Some companies already have a lot of training needs analysis applied, thus they can be make programs or plans to develop its employees'. Types of training are usually given to suit the individual requirements.
From the training analysis, gap that must improve will be detected in order to develop and expand individual skills. Training programs are various, some of them is in-house or external. It can also be local or international.
The number can be higher when people work at the top company, as they can get an average of IDR3.5 million to IDR4.5 million per month. There are companies which always making adjustments per year, but many are half-hearted in doing such thing. Then they only rise when there is inflation in main components.
As an illustration, for example, a company pays total income of IDR3.5 million consisting of IDR1 million as the basic salary, IDR1 million allowance, IDR1 million transportation, and the rest of the other components. The company will make an adjustment for inflation only for basic wage component.
Although people work for a living, Aex added, in Indonesia most people easily drop their jobs because they simply do not fit with their supervisors, such as unfair treatment and low career opportunity.
The second reason is to develop a career, earn a higher position, and the last reason is to seek better compensation system, other benefits, such greater insurance and also flexible working time.
"The turnover rate is normally around 10% - 12% depending on the industry, the high turnover today is micro banking, which reaches 40%, driven by high growth of micro financing business," he said.
Industry that provide the highest wages today are telecommunications, with an average wage of IDR2.6 billion per year for the executive level, about IDR400 million per year for the management level, and IDR4.5 million per month for fresh graduate.
Higher income also pocketed by executives who work in the finance and banking industry, while executives in FMCG industry have the lowest income compared with other industries.
Sari Cyenno Sari R. Soeriaatmadja, Owner PT Riyadi Reksase Nusantara (Cyenno Consultant), one of Indonesia's leading head hunter saw gap in salary is still exist, not only in every industries, but between local and expatriate labor.
"When compared to international standards, is still at the bottom, but from the quality, we can compete, as in some industries even the local people have a better ability to understand the market and implement the best strategy," she said.
Many Indonesian workers who are dare to pursue opportunities to move to another company after working 2 or 5 years. If it has been over 10 years, they will eventually settle on one company.
Employment system in Indonesia has actually improved but there are still some aspects that still need to be fixed. In terms of company's SOP which is still very weak, as there are a lot of regulations or guidelines that clearly define pitch as well the absence of an inadequate HIRS system although many are already going into that direction.
Other issues on the career path ate the rewards system as well as grooming system that are still become a homework for some local company in Indonesia. However, there are several local companies that have been very successful in implementing its employment system even they are better than the multinational company.
"The importance of training and people development are not yet realized in Indonesia, although when we compare to the last 10 years, it has been a lot of progress from this side," she said
Some companies already have a lot of training needs analysis applied, thus they can be make programs or plans to develop its employees'. Types of training are usually given to suit the individual requirements.
From the training analysis, gap that must improve will be detected in order to develop and expand individual skills. Training programs are various, some of them is in-house or external. It can also be local or international.
"Many scholars are unemployed, but many companies are also having trouble finding employees. At the executive level as well, looking for a successor CEO is incredibly hard. The problem is a lack of succession planning, even the unprepared system, "added Alex.
Sari saw Indonesia does not have shortage of skilled labor; however, if we refer to highly skilled labor, it is still low especially compared with developing or neighboring countries, particularly, in the field of high technology.
Sari saw Indonesia does not have shortage of skilled labor; however, if we refer to highly skilled labor, it is still low especially compared with developing or neighboring countries, particularly, in the field of high technology.
Working in multinational or local company is actually the same. But there are some differences. In the multinational companies, it can be divided to American coy, European coy and Asian coy. And they all have different characteristic and values.
But if we take the center line, multinational coy, they have well-structred system because they refer to systems in their regional or headquarter their office. Many things are still adopted from their original system in their headquarters.
Meanwhile, in local company, there are still many things that are not yet well organized and structured. Howeever, it can be a challenge for the company.
But if we take the center line, multinational coy, they have well-structred system because they refer to systems in their regional or headquarter their office. Many things are still adopted from their original system in their headquarters.
Meanwhile, in local company, there are still many things that are not yet well organized and structured. Howeever, it can be a challenge for the company.
Flexibility yang ada di local company justru dapat mengembangakan competency seseorang bahkan sudah banyak perusaan local yang as good as or even better than multinational company.
Flexibility is in the local company can actually grow competency of someone even had a lot of a local company which is as good as or even better than multinational company.
Flexibility is in the local company can actually grow competency of someone even had a lot of a local company which is as good as or even better than multinational company.
*written August 2012