Cost control in HR management may sound a cynical term to use but what we mean by it is the way to stay in full compliance with the Indonesian labor law and to identify potential HR costs and ways to structure them and account for them under appropriate accounting principles. Entrepreneurs intending to do business in Indonesia should recognize that according to the World Bank and IFC, Indonesia ranks 60th in terms of cost of firing staff, in the same rank as Guatemala, Bangladesh, Paraguay, Sudan, Egypt, Equatorial Guinea, Mozambique, Ecuador, Sri Lanka, and Ghana. These countries pay 100 weeks or more of pay to employees who have accumulated 20 years of service.
It is imperative, therefore, that prudent business practitioners keep this fact in the equation. We could assist you with capturing the total and structural costs of your current HR workforce and we could propose compliant ways to address it. Our experience with many NYSE-listed companies operating in Indonesia will assure compliance with the Indonesian laws as well as with USGAAP and IFRS standards. When recognized, analyzed and addressed appropriately, you could avoid unfunded past-service liabilities in your portfolio.
Please contact us for further information.
© PTG 2013