Doing Business in Indonesia: Hiring or Outsourcing?

Company structures and workflows in Indonesia are evolving and most businesses have deviated from traditional organisational culture norms. As opposed to having an in-house hiring team, HR outsourcing is now a common and effective way when doing business in Indonesia.

In the country, outsourcing contributes to a labour pool of 16 million people accounting for 40% of the country’s total workforce. Why do companies outsource their tasks to third parties? This is because outsourcing comes with benefits such as increased productivity and efficiency, enabling companies to focus on their core business activities.

It’s no denying that outsourcing solutions are common practices for Indonesia’s fast-moving and dynamic businesses nowadays. This article tells you what you should consider when it comes to choosing between in-house hiring and outsourcing, then you should be able to decide what is best for your business in Indonesia.

What Is Hiring?

Hiring is considered the common and traditional way of employee recruitment in a company to form the company’s human resource team. This hiring process is performed by the internal management team to employ new staff when it is necessary.

What Is Outsourcing?

Outsourcing is a method used when a company delegates its business activities to an external outsourcing firm to complete. A third-party outsourcing firm comprises a team of experts and professionals in their specialized fields to help handle your business’ daily core functions such as recruiting, accounting, or bookkeeping.

There are several reasons your business needs to outsource one or more of your business activities. Below are some of the circumstances:

• Managing every business function has become more and more difficult
• Your business has expanded into new markets or territories
• You have encountered a shortage of your existing internal resources
• You require expertise and professional advice for business operations that you’re not familiar with or don’t have a good understanding of

Hiring vs. Outsourcing when Doing Business in Indonesia: Things to Consider

When it comes to hiring versus outsourcing in Indonesia, here are some of the elements you need to consider:

The Cost

This is plain and obvious. One of the reasons company can have a higher figure of revenues is because they watch out for the costs. In the long run, hiring will always cost more for companies as it involves longer process. On the other hand, outsourcing help manage the process’ overall costs without the internal overhead costs.

The Expertise

At some point of running your business, you will require solutions and advice from professionals and experts. Outsourcing agency is equipped with highly specialised personnel to handle every tough issue you may have.

The Risk

It is understandable that companies find it uncomfortable to share business information with third parties as it might be risky to have your confidential data known by outsiders. In this case, you may go for the internal hiring process.

However, a good piece of advice is that if you do find a reliable outsourcing firm such as Cekindo, your business information will be absolutely secure and kept confidential. On top of that, we will help you manage the business functions efficiently and mitigate potential legal risks.

The Control

Are you willing to give control to a third-party to handle all your recruitment and hiring process? To be able to perform tasks more efficiently, the outsourcing agency needs to have a certain extent of control of your business operations. If you are not ready for that yet, perhaps you would stick to hiring.

However, as we keep mentioning, a trustworthy outsourcing firm works for the benefits your business. Thus, most companies do not consider this as a serious issue.

Related article: Hiring Foreign Workers vs Locals in Indonesia

Doing Business in Indonesia through Outsourcing with Cekindo

Cekindo understands your needs and challenges that may come with running a business in Indonesia. To help you, we offer an extensive range of outsourcing services focusing on the below areas:

• Human resources (recruitment and HR establishment, payroll processing)
• Finance (accounting and tax reporting, audit and review)

Get in touch with us today by filling in the form below should you require further information on our business outsourcing services. Or, visit our offices in Jakarta, Bali and Semarang.