Doing business with an Indonesia PEO/EOR
The largest economy in Southeast Asia, Indonesia is also classified as a Newly Industrialized Country. As a NIC, the sovereign state belongs to a subset of developing countries with economic growth much higher than other developing countries. As such, the social consequences of industrialization are reorganizing its multicultural, multilingual, and multi-ethnic society.
For foreign companies seeking to expand into Indonesia, these same factors make the island country both highly appealing, and incredibly complex for successful market entry and integration. Issues with labor unrest, changing governments, and a growing population (Indonesia is the world’s 4th most populous country) offer unique challenges in this economy – but also highly attractive growth potential. Partnership with an Indonesia PEO or employer of record (EOR) is the simplest and most efficient way to ensure success within the diverse economic sectors Indonesia provides.
Read on as we explore the benefits and ratings of the best Indonesia PEOs/EORs for your needs.
Why partner with a PEO/EOR in Indonesia?
Dealing with the diversity of Indonesian business laws and economic features can slow market entry. The experience and local expertise of a Southeast Asian PEO allows businesses to hire employees in Indonesia efficiently and quickly while remaining compliant with local laws and regulations. As PEOs operate in Indonesia, they manage the most labor-intensive administrative aspects of your business, such as contract completion, human resources needs, and payroll. Serving as a local partner and EOR, they are an essential part of business operations for overseas companies.
Best Indonesia PEOs & Employer of Record
Horizons leads with a robust Asian client roster that includes Fortune 500 companies. They can secure and administer contracts in the required language and guarantee legal and tax compliance. They accomplish this with localized expertise, providing their clients with smooth market entry and seamless employee procurement.
For any company that requires a simplified launch with turnkey management aspects and a full suite of Indonesia PEO/EOR solutions, Horizons has proven itself to be an invaluable partner in new Indonesian markets.
GlobalizationPedia identified some of Horizons’ key advantages compared to its competitors:
- A 100% Horizons-owned entity in Indonesia.
- On-site HR experts based in Jakarta.
- Very competitive pricing, with a scalable pricing model that gets even more competitive the more employees you hire.
Global PEO has a global presence in over 100 countries worldwide, featuring workforce solutions that allow clients to interface with HR and payroll areas while remaining remote. For new companies that have found their own local specialists in Indonesia, they can offload HR support issues to their all-purpose system.
Global PEO promotes fast onboarding and recruitment solutions as they handle hiring and workforce management as the legal employer.
Papaya Global’s client roster is heavy on technology companies – which matches their platform-based PEO. With their capabilities for workforce support in over 100 countries, including Indonesia, Papaya offers efficient service for many industries.
Their automated management services are accomplished with an online, cloud-based SaaS system. They offer localized insights and centralized management, all handled via their web platform. For new companies that have found local specialists in Indonesia, they can utilize their all-purpose system for HR issues.
Why are Deel, Remote, or other companies missing?
Deel, Remote, and other market-leading EORs are fine companies – but they may not be the best choice for hiring in Indonesia due to several factors:
- Such companies often prioritize hyper-growth, driven by investor demands for rapid expansion, over ensuring compliance with local regulations and protecting the interests of their customers. This can lead to potential legal and financial risks for companies utilizing their EOR services.
Example: A company focused on hyper-growth might encourage employers to hire de-facto employees as contractors, opening the client up to employee misclassification risk unnecessarily.
- In the past, we’ve seen that such ‘young & tech-driven’ providers may not meet the necessary knowledge requirements for providing adequate EOR services in Indonesia, jeopardizing compliance.
Example: Employees in Indonesia are entitled to 13th and 14th-month salaries under certain situations, one of which is termination. For Indonesia, you need an Indonesia EOR or an Indonesia PEO partner who understands termination in Indonesia very well. The process is complex and will often require high severances, but companies should work with an Indonesia PEO who can deliver the best possible outcome for all parties.
- Relying on a virtual-only support team can make it challenging to address any issues or concerns that may arise, potentially causing delays or disruptions in operations.
Example: If there are no local support staff in-country, your Indonesia employees may be left without answers to their important questions. If you go with a company that outsources their support staff to another time zone or to non-HR specialists, you risk losing candidates, or worse, employees.
As such, it is recommended to carefully evaluate EOR providers based on their track record of compliance, experience in Indonesia, and support capabilities, rather than solely on their growth and pricing potential.
Request a Proposal
If your company is interested in expanding your operations into Indonesia, GlobalizationPedia can connect you with a PEO that best fits your needs at a cost-effective price. Fill out the form below and we’ll use our extensive database of strategic partnerships to provide you with a full breakdown of the best potential Indonesia PEO matches for your company.