Indonesians firms worst in leadership, communication

Fitri Wulandari, The Jakarta Post, Jakarta

Indonesian companies are among the worst in the Asia Pacific in terms of leadership and communication between executives and employees, according to a new survey.

However, they are the best in the region in terms of employee recruitment and retention, the survey showed.

David M. Knowles of the Watson Wyatt Human Capital Group said Indonesian companies tended to expect senior leaders to make company decision on their own, putting aside input from employees.

He said a hierarchical relationship contributed to this situation, which further widened the gap between employees and their leaders and disrupted communication.

"Leaders often cannot give a clear reason behind their decisions to the employees. On the other hand, senior leaders have little trust in the employees," David said on Wednesday.

As a consequence, employees are not well-informed about the company's projects, policies or strategies, he said.

Knowles noted that Indonesian companies failed to engage employees in decision-making or to solicit input from employees or gauge their perceptions and feelings through employee surveys.

Leadership and communication were among the factors used to obtain the Human Capital Index (HCI), which describes the relationship between human resources, management practices and shareholder value.

The HCI survey, the first of its kind to be conducted in the Asia-Pacific region, involved 500 companies from China, Taiwan, Hong Kong, South Korea, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Australia and New Zealand.

Thirty-five publicly listed Indonesian companies were included in the survey, with 74 percent of them being local companies and 26 percent multinationals. Among the companies were high-profile companies such as Astra International, PT Semen Gresik, Bimantara and Charoen Pokphand.

Watson Wyatt suggested that companies adopt a more open style of communication and obtain input from employees, which would lead to improved market value.

The survey also shows that Indonesian companies are doing better than other companies in the region in terms of recruitment and retention.

"Indonesian companies investment a great deal for recruiting people, for example by employing headhunters, and have good retention programs such as pensions and benefits," Knowles said.

While they invest a great deal in recruitment, Knowles noted, Indonesian companies do not have effective internal recruitment systems and rely on headhunters and third parties to manage the process.

As for benefits, he said, Indonesian companies have clear benefits program such as salary and pension.

"Indonesian companies have retention programs such as pension and health which are much better than other countries," he said.

Overall, Indonesian companies scored 55 percent in the HCI, higher that regional average of 50 percent.

According to Knowles, the survey can help companies set up better human resource programs, which can increase shareholder value.