How organisations define productivity can vary; some may measure productivity through hours worked, or by number of tasks completed. Bob Aubrey, Founder of the ASEAN Human Development Organisation and Chair of its advisory board summarises why it may be difficult to improve employee productivity: “The problem with the human capital measure is that all measures are economic. We need to move to a broader concept of human development, other than just the measures that you take from the human capital index; you’re talking about quality of life, in a certain sense.”
Though the specifics of employee productivity metrics might differ, it is clear that measuring and encouraging increased employee productivity is a challenge. Higher productivity leads to higher competitiveness, an area where Indonesia struggles. The country ranked 50th out of 141 states in a 2019 World Economic Forum Global Competitiveness Report, down five places from the previous year. Minister of National Development Bambang Brodjonegoro noted at the Indonesian Development Forum in 2019 that Indonesian workers in the informal sector have low productivity.
While there has been some improvement in 2021 and 2022 (labour productivity grew at 1.56% and 2% respectively), Indonesia is still ranked lower than other ASEAN countries. Comparatively, Malaysia grew 3.6%, the Philippines 1.23%, Singapore 4.9%, Thailand 2.96%, and Vietnam 15% in the last year.
This goes to show the importance of measuring productivity with practical and effective benchmarks, especially with technological and economic disruptions. This is an especially relevant and pressing challenge for HR in Indonesia to tackle. Labour productivity in the country plummeted during the pandemic, declining 3.5%. A study conducted by the Japan External Trade Organisation (Jetro) found Indonesia’s productivity was below that of other ASEAN countries, and also below the average productivity rate for all 20 countries in Asia and Oceania the report studied. The survey highlighted a lack of human resources as a specific issue affecting the productivity rate, especially in engineering.
The challenges of both technological adaptation and developing employee capabilities ultimately contribute to a declining employee productivity rate. However, there are several other factors that HR must consider. These include organisational culture, communication channels and policies, employee engagement and wellbeing, and opportunities for career development. Employee wellbeing must be prioritised in order to enhance the innate motivation of employees to be more productive.
Asia Region Head at HR of Danish technology company FLSmidth George Xavier says employee productivity is particularly relevant for HR in Indonesia: ‘’Indonesian businesses often struggle with low levels of productivity and employee engagement. HR professionals play a crucial role in addressing these issues; they are responsible for creating a work environment that fosters employee satisfaction and motivation.’’
He proffers possible solutions: ‘’HR professionals can implement programmes that encourage collaboration and teamwork, provide opportunities for professional development, and create a positive workplace culture.’’
The Asian Development Bank found that, in 2021, uncertainty negatively affected employee productivity. In order to solve this problem, prompt and clear communication needed to be given immediately. All changes to standard business processes and work plans had to be updated with employees, and supervisors were encouraged to address employee concerns in changing priorities. Rather than focusing on output, the ADB focused on impact, and employees were given extra room for flexibility as they made the necessary adjustments.
Another point to consider is incorporating diversity and inclusion into training in the workplace in order to enhance employee cooperation and synchronisation. Indonesia is an incredibly diverse country. It is one of the most linguistically diverse countries in the world, with more than 800 languages and dialects spoken throughout the main islands alone, and many cultural differences between different regions of the country. HR may investigate points of contention for employees, and launch initiatives to target them. Whether they focus on gender equality or cultural transformation, these initiatives are incredibly useful in aligning employees with the values of the organisation, raising more awareness and strengthening the connection between the workforce and the enterprise’s mission.
While these measures are much harder to measure than standard economic benchmarks, such as hours worked, words written, or sales made, they do address the employees’ individual quality of life. Establishing HR practices that guarantee a sustainable and motivated employee culture for the future are necessary in ensuring a high level of quality, and therefore productivity, in company output.
