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Employment outsourcing in Jakarta: A complete guide

Employment outsourcing in Jakarta: A complete guide

As the biggest economy-driven city in Indonesia, Jakarta offers exciting business opportunities. However, navigating the intricacies of hiring top talents in a new market can be daunting after you complete your business expansion.

If you want a seamless process, hiring an employment outsourcing company in Jakarta can ease your expansion plan. Make sure to evaluate and employ your talents through specialized HR outsourcing partners for guaranteed success.

Importance of hiring in Indonesia

Understanding the various types of employment agreements is crucial when navigating the hiring process through outsourcing services in Jakarta.

With specific regulations in place, employers must grasp the nuances of different contract types to ensure compliance with labor laws and effectively manage their workforce. In Indonesia, employment contracts are typically classified into two categories:

Indefinite employment

This category applies to full-time employees entitled to various benefits stipulated by labor laws.

Fixed-term employment

Fixed-term contracts are appropriate for specific scenarios such as one-time projects, seasonal work, or activities related to experimental products or ventures. Usually, the outsourcing services providers already have a pool for you to decide on this type of employment.

The contract specifies conditions under which the work engagement will be considered complete. Upon fulfilling these conditions and completing the work, the contract automatically terminates.

Should circumstances prevent completion within the designated time frame, the employment may be renewed once for up to two years, with a 30-day interval between the original contract’s expiration and the renewal commencement.

Read more: Developing a successful recruitment strategy in Indonesia

Understanding HR outsourcing

Human resources or HR Outsourcing refers to hiring a third-party organization to handle human resources tasks and administrative duties. Human resources play an important role in every company’s operations, overseeing employee performance and ensuring proper compensation.

While many companies have internal HR departments, some may require additional assistance from employment outsourcing providers, particularly those with large workforces or newly established foreign companies in Indonesia.

These companies may find managing HR internally challenging, especially when navigating unfamiliar local laws and regulations. In such cases, employment outsourcing services can be a valuable solution.

Benefits of using employment outsourcing services

Employment outsourcing Jakarta: Guide to hiring top talent

Utilizing outsourced human resources can streamline your hiring process and optimize resource allocation. But how does it work? Let’s explore how you can maximize the output of employment outsourcing services.

Improving the hiring success rate

Many small businesses need more employee packages to attract the right talent, and outsourcing services ensure that you offer attractive packages to enhance your hiring success. Additionally, outsourced employees come with adequate training, eliminating the need for you to invest time and resources in training them.

Enhancing hiring efficiency

Outsourcing providers have streamlined hiring processes to ensure efficiency. They also assist with employee onboarding, quickly familiarizing new hires with their roles. Outsourcing experts also monitor employee performance to ensure alignment with your business objectives.

Ensuring compliance with laws and regulations

Legal compliance is critical for any human resources team, especially given the complexity and unpredictability of Indonesia’s labor laws and regulations. Outsourcing your hiring helps mitigate legal risks associated with employment law, wage law, and other employee-related issues such as termination and harassment.

Enjoying financial benefits

Outsourcing your hiring can yield various financial benefits for your business. These include improved hiring and performance, reduced salary and benefit expenditures, mitigation of legal penalties, and improved bottom line through increased productivity.

Attractive employment benefits package

Outsourcing providers have access to a vast employee network, allowing them to offer better health, retirement, and benefits packages typically available in more giant corporations. Partnering with an outsourcing firm can benefit small businesses that cannot afford attractive employee benefits independently, ultimately contributing to long-term business performance.

How does an employment outsourcing provider work?

HR outsourcing streamlines human resource activities by entrusting them to a third-party company. Here’s a brief overview:

Identifying needs

A reputable employment outsourcing provider will evaluate your HR requirements, such as payroll, recruitment, benefits administration, or training.

Choosing a provider

Select a reputable HR outsourcing company that matches your needs, considering factors like expertise, services, cost, and compatibility.

Contract and SLAs

Establish a detailed contract outlining services, costs, timelines, and responsibilities. Service Level Agreements (SLAs) define performance expectations.

Transition and onboarding

Collaborate with the outsourcing company to transfer data securely, establish communication channels, and understand your company culture and policies.

Ongoing service delivery

The outsourcing company takes over designated tasks, providing regular communication for transparency and adjustments.

Reporting and performance management

Receive regular reports on HR metrics and performance based on SLAs, allowing you to monitor progress and address concerns effectively.

Choosing the right outsourcing provider

There are several steps you can consider before choosing the right HR outsourcing partners:

Assess your human resources needs

Evaluate your HR needs based on company size, industry, turnover rate, employee type, and organizational structure.

Research HR outsourcing companies

Create a list of potential providers, considering factors like experience, customer reviews, technology offerings, and social media presence.

Choose a flexible technology platform

Select an HR outsourcing company that offers a user-friendly and secure technology platform. For flexibility, opt for a provider that allows you to retain ownership of the technology.

Review contract terms and services

Thoroughly review the contract terms, including service level agreements, implementation fees, and issue resolution processes.

Understand pricing structure

Understand the pricing structure and any additional costs associated with the services. Look for transparency in pricing and flexibility to adjust services as your business needs change.

Consider company culture and values

Choose an HR outsourcing company that aligns with your company’s values and goals. Look for transparency, integrity, accountability, and exceptional customer service.

Evaluate customer service

Assess the provider’s customer service and technical support capabilities. Prioritize responsiveness and communication to ensure a successful partnership and long-term success.

How HR outsourcing can help your business growth

In today’s competitive business landscape, streamlining operations and maximizing resources is crucial for growth. HR outsourcing offers a strategic solution by delegating specific HR tasks to a specialized provider. Here’s how it can benefit your business:

  • Reduce costs
  • Boost efficiency
  • Access specialized expertise
  • Scale your HR function
  • Enhance employer branding

InCorp Indonesia can help you find the best talent

Boost your business expansion in Indonesia by teaming up with InCorp Indonesia. After handling post-incorporation compliance and company registration, finding top talent is essential for improving your operations.

InCorp Indonesia can connect you with the best candidates across industries and take the stress out of recruitment in Jakarta.

  • Manufacturing
  • Logistics and shipping
  • Tech and utilities
  • Energy
  • Resources
  • Healthcare
  • Construction
  • Real Estate
  • Food and beverage
  • Non-Profits

With extensive experience and a vast network, InCorp Indonesia is the perfect recruitment agency to help you assemble a highly skilled team that matches your expansion goals in Indonesia. Contact our expert to find out more.


Start investing in Indonesia with InCorp


    Teddy Willy

    Branch Manager – Surabaya Office at InCorp Indonesia

    With 10 years of experience in business consultancy, Teddy Willy offers expertise in financial and production auditing, sales and marketing, channels and distribution, supply chain management, and human resources for every business sector in Indonesia.

Frequently Asked Questions

    As your HR outsourcing provider, InCorp signs a standard employment agreement with an outsourced employee. After this, we take care of the employee’s payroll in coordination with your company. InCorp is also responsible for paying the salary to the employee.

    Under the latest regulations on Halal Product Assurance, the mandatory requirement for halal certification has been expanded to encompass a wide range of consumer products in Indonesia. This change, which was previously voluntary, now dictates that various items must obtain halal certification. Initially, the certification focus has been on food and beverage products, with the deadline for compliance set for October 17, 2024

    There are a few things to consider, such as:

    • Prohibit any form of discrimination and provide equal opportunity for Indonesians and expatriates
    • Increase the competence of workers by giving or encouraging job training.
    • Follow the termination procedures (Terminating an employee in Indonesia can be long, tedious, and expensive.
    • Observe working hours, holidays, and overtime regulations
    • Give mandatory employee benefits, including social security and health insurance
    • Withhold only the right amount of income tax on behalf of the employees
    • Follow the wages and other benefits outlined by the law
    • Process work permits for foreign employees

    As a professional executive search agent, InCorp helps promote job vacancies, screen, and shortlist applicants, conduct pre-interviews, and arrange final interviews with applicants. This can also be topped up with an employee background check.

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