Investing in Indonesia
Understanding Work Culture to Build Trust
By: Drs. Saiful Bahri, CHRM
Former Indonesian Language & Culture Instructor for Expatriates (1996-2000)_
Between 1996 and 2000, I had the privilege of teaching Indonesian language to expatriates in Jakarta. I came to their homes and offices. The book I wrote at that time was entitled _“Workculture for Expatriates”_. It was only for internal use, not for public distribution.
From that experience, I learned one important thing: *Many foreign investors are not afraid of Indonesian laws. They are afraid of not understanding Indonesian people.*
Today, as Indonesia continues to open its doors for investment, I would like to share 3 practical lessons for expatriates and foreign companies who want to work and invest here.
*1. TALK WITH LABOR UNIONS, NOT AGAINST THEM*
In Indonesia, labor unions are strong and protected by law. This is not something to fear.
In my experience, the best approach is _dialogue_.
Come with respect. Listen first. Explain your company’s goals clearly.
Remember: Indonesian workers value harmony. If they feel heard, they will support you.
Conflict happens when there is no communication.
*2. KNOW THE DOs AND DON’Ts IN THE INDONESIAN WORKPLACE*
Here are the basics every expatriate manager should know:
– *DO*: Register employees for BPJS Health and Employment. It is mandatory.
– *DO*: Respect working hours, overtime pay, and annual leave as stated in the Manpower Law.
– *DON’T*: Terminate employees suddenly without proper process and compensation.
– *DON’T*: Ignore local customs like prayer times, religious holidays, and _mudik_ season.
*A Real Case: The Cost of Misunderstanding Culture*
I once witnessed a case that shows how small words can create big problems.
An employee requested sudden leave. According to company rules, sudden leave was only allowed for reasonable reasons. His expatriate manager refused. The manager even said:
_“If I were you, I would never take sudden leave unless my own mother had passed away. Only then would I take it.”_
Hearing this, the employee was deeply hurt. In Indonesian culture, mentioning someone’s mother in that way is very sensitive and offensive.
Instead of following the instruction, the employee still took the leave to bring his mother to the hospital.
Seeing that his subordinate did not follow orders, the expatriate manager gave a warning letter and even planned to cut the employee’s salary. This is an example of arrogance.
What the expatriate did not know is that *cutting an employee’s salary as punishment is not allowed under Indonesian Manpower Law.*
The employee then reported the case to the labor union.
The union invited the company management to sit together and discuss the problem.
After hearing the explanation from the union, the management finally understood. They prohibited the manager from cutting any employee’s salary.
*The Lesson:*
Laws can be learned from a book. But culture must be felt and understood. A manager who does not understand local sensitivity and local law will only create conflict, not results.
*3. USE “MUSYAWARAH”: THE INDONESIAN WAY OF SOLVING PROBLEMS*
Western management often says: “Give direct orders”.
Indonesian culture often says: “Let’s discuss first”.
_Musyawarah_ or consultation is not a waste of time. It builds trust.
Before making big decisions, gather your team. Ask for input. Even if you already have the answer.
This small step will make your Indonesian staff feel valued and respected.
*CLOSING: INDONESIA IS OPEN FOR BUSINESS*
Indonesia has a young workforce, a big market, and a welcoming spirit.
But success here is not only about capital and technology.
Success comes from understanding people first. Tht!s we we call “musyawarah” in Indonesia
Musyawarah plays veey important role for Insonesian people.
To all expatriates and investors: Do not be afraid.
Learn the culture in advance
Respect the law. Work together with your Indonesian team.
If we do this, we can build a business that benefits both the company and the nation as well.
_Wallahu a’lam bishawab._
*
