Being a CEO in Indonesia means decolonizing expectations and becoming one of their own

Tropical climate, fast-growing market, high entry barrier for new companies, and a wealth of technological and financial opportunities are all reasons why entrepreneurs choose Indonesia to scale their existing businesses or launch pilot products.

However, our entrepreneurs often make the “imperialist mistake” — they try to blindly copy business traditions from their home market, without taking into account the cultural characteristics and established work habits of the residents of this southeastern country.

Vlad Ayukaev, CEO of the Indonesian fintech builder PVG and a member of the heg.ai community, shared his vision and advice on doing business in Indonesia. In this article, we will talk about how to find a common language with the locals, implement an effective HR strategy and build a happy team that will help you earn.

To gain trust, you need to slow down

Before starting work, it is worth studying the features of the work culture that many Indonesians have.

The climate in the country creates an ideal atmosphere for a calm, relaxed life.

The average temperature throughout the year is about 25-28 degrees with abundant rainfall. Due to the fact that the climate is stable and the land is very fertile, locals throughout history were able to pay less attention to crop and farm planning. In general, Indonesians have long lived and worked in a measured manner, and are in no particular hurry.

We cannot ignore the historical and geographical contexts.

Indonesia was a Dutch colony for a long time, so it remained an underdeveloped country with a predominantly illiterate population. And only in 1945 did it gain independence. But even after its liberation from colonial oppression, it could not achieve any significant development for a long time. One of the reasons for this is its very complex geography. Indonesia is an archipelago of more than 17,000 islands with very different cultural identities and disparate communities. Many of the communities live at great distances from each other and speak 700-800 different dialects. Therefore, the young state had to spend a huge amount of time and effort to bring such a diverse society under one denominator.

As a result, modern Indonesians are largely conservative, skeptical of globalization (read neocolonization) and the new ideas inherent in it, and critical of the changes around them. And since everything here is based solely on connections, in order to create a successful business, you must first feel the local culture, pass the "friend or foe" filter and become part of this society.

For a quick start, I recommend remembering the "three NO's" rule: unhurriedness, non-obligation, mistrust. These are the characteristics of local employees and partners that you will have to adapt to and adjust your business to.

First conclusion: everything will be difficult at the start.

You will have to look for a good employee

If you are used to finding the right person in Europe and the CIS countries by looking at two or three dozen resumes, then in Indonesia everything will be different. Here you will have to study at least 100-200 resumes. The country is experiencing a very acute personnel shortage. The conversion from responses to interviews in digital, using our company as an example, averages from 2% to 5% — and the more hard skills you need in a candidate, the more difficult the search will be.

To simplify the search process, it is better to use LinkedIn instead of local sites: the platform sets global standards in recruiting, forces locals to work on their CVs, adding in-demand skills there. It is convenient that LinkedIn has a recommendation system — it will help to verify the education and experience of the potential employee.

By the way, candidates from Indonesia often provide a lot of certificates and recommendations from previous places of work, offer salary statements to emphasize their importance and increase the numbers in their new offer. It is important to approach this critically, do not let a pile of certificates cloud your vision: select based on the features that are really important for this position.

Some other points to remember when hiring an employee from Indonesia:

• Wage expectations: Indonesians usually do not agree to a salary lower than they had at their previous job. You should also take into account indexation due to inflation and increase wages with an increase in work experience by 30-40%.
• Minimum wage: each region of Indonesia has its own established minimum wage. When hiring an employee, it is important to make sure that you do not violate the law by offering a salary lower than the minimum wage.
• Social packages and bonuses: in Indonesia, these are very important to attract and retain qualified employees. Perhaps even more important than salary: an Indonesian can agree to a relatively low salary if he receives good social guarantees from the employer. The minimum usually includes insurance under the local voluntary health insurance system and compensation for transport costs. It is worth discussing these at the time of hiring so that the employee feels stable and confident in the future.

Learn about labor law — it's on the side of employees

In Indonesia, labor is highly valued and protected by legislation that seems very socialistic in places. If something happens, the court will most likely side with the employee. So before hiring employees, protect yourself:

Read the corporate rules and legislation on employment to avoid trouble. Consider the requirements for contract work and full-time work. The general rule is to minimize the number of full-time specialists and, if possible, conclude fixed-term contracts with employees. However, it is important to keep in mind that long-term and recurring contracts may be considered full-time work by the court and a fine for forgery may be imposed.

Create a separate regulation for your company, the so-called company regulation. This is a corporate document that can regulate the relationship between the company and the employee where the law does not comment on anything. You will define your responsibilities to your employees, and they will clearly understand their duties and opportunities. Be sure to convey to your employees its legal significance, because many Indonesians do not know about it.

Don't forget about the Thirteenth Salary (THR), which the employer must pay to employees during the Holy Month of Ramadan. There is a special formula for calculating this payment.

Don't let employees keep silent about problems

A foreign CEO and any other C-level working in Indonesia faces a number of management problems that can become an obstacle to achieving goals. But knowing about them in advance, you can develop a strategy to avoid or reduce their impact.

Poor communication

As we have already found out, Indonesians are not the most responsible and efficient workers by our standards. Therefore, it is so important to give clear instructions and specific deadlines for completing tasks. In addition, it is necessary to ensure that employees do not postpone deadlines without serious reasons. To do this, the manager can hold regular meetings with each employee, where he will discuss current tasks and give specific instructions. It is critically important that communication with local employees is based on advice and help, and not on control and punishment. If you try to put pressure on an Indonesian and accuse him of poor performance, he will close himself off from you as quickly as possible.

Diffuse responsibility

In Indonesia, teamwork is usually valued, and from this follows the already mentioned collective responsibility. Therefore, on the one hand, it is important to distribute tasks across the department and not impose too much responsibility on one person. On the other hand, it is important to ensure that each team member understands their role and responsibilities. Clear instructions will help with this: write down how you will distribute tasks between departments and within each team, and assign responsibility for important streams

Secrecy

In Indonesia, it is not customary to openly talk about crises and poor results. But if problems are not resolved in a timely manner, this can lead to low work efficiency and stagnation. It is important to create an atmosphere of openness, where everyone has the right to express their opinion and talk about the difficulties that have arisen without fear of punishment. Mistakes are inevitable, and it is very important to understand them. According to Study Finds, in 2022, 84% of respondents answered that without mistakes at work, they would not be where they are now. Build trusting relationships with employees and show by your example that making mistakes is okay. The main thing is to draw effective conclusions from them for future success.

Introduce the following tactic as a rule: See something = say something, or: you see a problem — inform. Convey to your team that talking about difficulties, even if they arose for others, is not “snitching”, but working for the common good of the entire company.

The operating process is a pain.

Show that you will be useful in Indonesia

It is important for the locals that you respect their religion and culture, understand the principles on which society is built, and also value the independence of the country. Friendliness and friendliness towards locals is the basis. But it is also important to build a strong personal brand for working here, which will help show that your work experience will be relevant to Indonesia and can benefit the country.

Here are some principles for creating such a brand:

Be “one of them”

It is necessary to respect the traditions and norms accepted in Indonesia. But do not be afraid to make mistakes — it is better to be open and friendly and accidentally do something wrong, and then apologize, than to stay away. Such behavior is not only appreciated, but also strengthens your reputation as a leader. In addition, do not forget about business etiquette. For example, Indonesian businessmen prefer to resolve all issues collectively with partners, so be prepared for long and crowded negotiations.

Present your experience

It is important to work on your professional history. Tell which companies can vouch for you, what you did in your previous place of work, why you decided to move to Indonesia and open your own business. These questions will help you to reveal yourself and show the locals that you have come with serious intentions.

Use the Russian diaspora

Look for Russian-speaking communities and meet locals through them. At the initial stage, they may be wary of foreigners, but according to the "six handshakes" rule, they can start a dialogue and even be ready for a business partnership. If you have contacts in the community who can help you solve any issues, then the problem will be dealt with more readily.

Key conclusions about working in Indonesia

• To successfully adapt to a new environment, be open to change and ready for difficulties. Studying the local culture and traditions will help you better understand the locals, establish contact and build effective interactions. Also, familiarize yourself with labor laws and the rights of foreigners to avoid conflicts and lawsuits.
• To ensure that your company operates successfully, implement effective working methods, but do so gradually so that employees can adapt and rebuild their thinking to a more flexible, modern one.
• Finally, do not forget about your personal brand and reputation. When working in “foreign” markets, it is important to think about your image and show that you can be useful here.
• Following all these recommendations, you can succeed in working in Indonesia, establish harmonious relations with the locals and create a happy and effective team that will be able to lead the company to success.