INDONESIA – HONGKONG BUSINESS ASSOCIATION

10 June 2015, Intercontinental Hotel , Jakarta - Indonesia

“Recruitment for Start Up and Established Companies in Indonesia”

Professional Talent Market Condition

• “Short-supply, over-demand” professional talent market, due to increasing business activities, talent gap is getting widened ahead

• Higher “HIRING” cost must be spent by employer

• Low staff engagement and productivity have not been resolved

• The talent war is happening and the best employees are the most vulnerable talents to be retained. Employment period is shorter and higher turnover in the business.

• New regulations changing the talent market condition including foreign workers

• Technology has been the main “game changer”: automation reduces the needs of unskilled labors, but also creating new type of business/profession

TALENT GAP IN INDONESIA In 2020, Indonesia will

face major shortage at

middle management level

(56%)

Source: BCG report

FINDING TALENT IN INDONESIA ?

*) Asean Community 2015: Managing Integration for Better Jobs and Shared Prosperity, by ILO and ADB

Higher HIRING Cost in 2015

• New implementation of BPJS Kesehatan

• Possibility of double insurance expense paid for professional (white collar) workers due to medical facility condition (as part of BPJS Kesehatan’s benefits)

• Possible Implementation of increased pension fund for workers (by mid year of 2015)

New Minimum Wage at Jakarta has been increased 11% annually in the last 2 years, CAGR is 20% in the last 5 years

PRODUCTIVITY COMPARISON …

*) Asean Community 2015: Managing Integration for Better Jobs and Shared Prosperity, by ILO and ADB

Productivity VS Min Wage Growth (%) : Jakarta

0

10

20

30

40

50

2011 2012 2013

Pe

rce

nta

ge (

%)

Year

NMW

Productivity

The speed of worker productivity growth at Jakarta, has never been matching the minimum wage growth

Source : BPS, PDRB Tahun 2010, 2011, 2012, dan 2013 Sakernas Edisi Agustus Tahun 2010, 2011, 2012, dan 2013 diolah Pusdatinaker

Employee Engagement in Indonesia *)

– Engaged: 8% VS 13% (global #) VS 12% (south east asia) – Not Engaged: 77% VS 63% (global #)

– Active disengaged: 15% VS 24% (global

#)

*) source: Gallup – State of the Global Workplace report

New Specific Regulation

• More enforcement on outsourcing practice restriction

• Mandatory for expatriates speaking Bahasa Indonesia

• Expatriates shall earn salary in IDR (by mid of 2015)

• Possible policy that foreign worker must have S1 (strata 1), which is equivalent to Bachelor degree

Opportunities to Hire …

• Active & Passive talents in the country *) – Actively looking - 15% VS 12% (global avg)

– Casually looking a few times a week – 14%

– Reaching out to personal network – 20%

– Open to talking to recruiter - 41%

– Completely satisfied, no willing to move – 10% VS 15% (global avg)

• Top reasons to move/change the job *) – Active candidate: better compensation and benefit; more challenging

work, better quality company

– Passive candidate: better compensation and benefit; better work/life balance, opportunities for advancement

*) source: Linkedin – Talent Trends 2014 report

HIRING for Start Ups

Challenges …. ??

How to Attract

Talents?

What Will Frustrate Start-Up Companies in Hiring Staffs?

• Lack of talents interested with start-up companies

• Financial Inability (for self funded start up)

• Low Employer Branding • Difficulty to find employees

with right attributes for start up and culture fit

How to Attract Talents ?

• Story Telling ! Tell about your business vision, products, dream, plan, your strength, fund raising activities and align these with their career aspiration. Your historical success stories will be more convincing too.

• Start & Focus on particular communities, and create strong connection and quick employer branding there

• Allocate more committed time in hiring, everyday is “hiring day”

• Leverage your recruitment partners to make up your employer brand, and reach out to larger talent options

… and what needed by established companies ? CONTINUOUS IMPROVEMENT IN : Employer Branding | Talent Sourcing |

Strong Assessment Technology Support | Best Recruiters

TRANSFORM YOUR RECRUITMENT

• Strategically, long recruitment cycle shall to be reduced significantly. Avoid rushing to recruit which creating high probability for wrong recruit and expensive hiring cost.

• Change the attitude of recruitment from “reactive” to “active” and “anticipative”. Hiring activities shall be a continuous activities despite no vacancy in organization.

• Emphasize the role of line managers for recruiting their staffs, despite assisted by corporate recruiter or HR Department. Hiring good quality of staffs is line manager’s concerns, and directly impacting the performance of their organization.

• Install paradigm that “external talent management” is equally important with ”internal talent management”. External talent management here is more on identifying and assessing external talents, as well as creating communication with talents outside of company

We are executive search company, incorporated in 2002, serving mainly our clients in Indonesia, ASEAN countries and other Asia

Pacific region. Industrial expertise: FMCG, Pharmaceutical, Technology, Telecommunication, e-commerce/tech business and

Manufacturing. Hiring manager – director level for top multinational companies