Work-life balance: Ways to restore harmony and reduce stress by Mayo Clinic Staff, MayoClinic.com

If your work life and personal life are out of balance, your stress may be running high. Here's how to reclaim control.

Finding work-life balance in today's frenetically paced world is no simple task.

Spend more time at work than at home, and you miss out on a rewarding personal life. Then again, when you face challenges in your personal life, such as caring for an aging parent or coping with marital problems, concentrating on your job can be difficult.

Whether the problem is too much focus on work or too little, when your work life and your personal life feel out of balance, stress — along with its harmful effects — is the result.

The good news is that you can take control of your work-life balance — and give yourself the time to do the things that are most important to you. The first step is to recognize how the world of work has changed. Then you can evaluate your relationship to work and apply some specific strategies for striking a healthier balance.

How work invades your personal life

There was a time when employees showed up for work Monday through Friday and worked eight- to nine-hour days. The boundaries between work and home were fairly clear then. But the world has changed and, unfortunately, the boundaries have blurred for many workers. Here's why:

• Global economy. As more skilled workers enter the global labor market and companies outsource or move more jobs to reduce labor costs, people feel pressured to work longer and produce more just to protect their jobs.
• International business. Work continues around the world 24 hours a day for some people. If you work in an international organization, you might be on call around the clock for troubleshooting or consulting.
• Advanced communication technology. Many people now have the ability to work anywhere — from their home, from their car and even on vacation. And some managers expect this.
• Longer hours. Employers commonly ask employees to work longer hours than they're scheduled. Often, overtime is mandatory. If you hope to move up the career ladder, you may find yourself regularly working more than 40 hours a week to achieve and exceed expectations.
• Changes in family roles. Today's married worker is typically part of a dual-career couple, which makes it difficult to find time to meet commitments to family, friends and community.

Married to your work
It can be tempting to rack up the hours at work — especially if you're trying to earn a promotion or some extra money for a child's education or a dream vacation. For others, working more hours feels necessary in order to manage the workload.

But if you're spending most of your time at work, your home life will likely pay the price. Consider the pros and cons of working extra hours on your work-life balance:

• Fatigue. Your ability to think and your eye-hand coordination decrease when you're tired. This means you're less productive and may make more mistakes. These mistakes can lead to injury or rework and negatively impact your professional reputation.
• Family. You may miss out on important events, such as your child's first bike ride, your father's 60th birthday or your high-school reunion. Missing out on important milestones may harm relationships with your loved ones.
• Friends. Trusted friends are a key part of your support system. But if you're spending time at the office instead of with them, you'll find it difficult to nurture those friendships.
• Expectations. If you regularly work extra hours, you may be given more responsibility. This could create a never-ending and increasing cycle, causing more concerns and challenges.

Sometimes working overtime is important. If you work for a company that requires mandatory overtime, you won't be able to avoid it, but you can learn to manage it. Most importantly, say no when you're too tired, when it's affecting your health or when you have crucial family obligations.

Striking the best work-life balance

For most people, juggling the demands of career and personal life is an ongoing challenge. With so many demands on your time — from overtime to family obligations — it can feel difficult to strike this balance. The goal is to make time for the activities that are the most important to you.

Here are some ideas to help you find the balance that's best for you:

• Keep a log. Track everything you do for one week. Include work-related and non-work-related activities. Decide what's necessary and what satisfies you the most. Cut or delegate activities you don't enjoy and don't have time for. If you don't have the authority to make certain decisions, talk to your supervisor.
• Take advantage of your options. Find out if your employer offers flex hours, a compressed workweek, job-sharing or telecommuting for your role. The flexibility may alleviate some of your stress and free up some time.
• Learn to say no. Whether it's a co-worker asking you to spearhead an extra project or your child's teacher asking you to manage the class play, remember that it's OK to respectfully say no. When you quit doing the things you only do out of guilt or a false sense of obligation, you'll make more room in your life for the activities that are meaningful to you and bring you joy.
• Leave work at work. With today's global business mentality and the technology to connect to anyone at any time from virtually anywhere, there's no boundary between work and home — unless you create it. Make a conscious decision to separate work time from personal time. When with your family, for instance, turn off your cell phone and put away your laptop computer.
• Manage your time. Organize household tasks efficiently. Doing one or two loads of laundry every day, rather than saving it all for your day off, and running errands in batches are good places to begin. A weekly family calendar of important dates and a daily list of to-dos will help you avoid deadline panic. If your employer offers a course in time management, sign up for it.
• Rethink your cleaning standards. An unmade bed or sink of dirty dishes won't impact the quality of your life. Do what needs to be done and let the rest go. If you can afford it, pay someone else to clean your house.
• Communicate clearly. Limit time-consuming misunderstandings by communicating clearly and listening carefully. Take notes if necessary.
• Fight the guilt. Remember, having a family and a job is OK — for both men and women.
• Nurture yourself. Set aside time each day for an activity that you enjoy, such as walking, working out or listening to music. Unwind after a hectic workday by reading, practicing yoga, or taking a bath or shower.
• Set aside one night each week for recreation. Take the phone off the hook, power down the computer and turn off the TV. Discover activities you can do with your partner, family or friends, such as playing golf, fishing or canoeing. Making time for activities you enjoy will rejuvenate you.
• Protect your day off. Try to schedule some of your routine chores on workdays so that your days off are more relaxing.
• Get enough sleep. There's nothing as stressful and potentially dangerous as working when you're sleep-deprived. Not only is your productivity affected, but also you can make costly mistakes. You may then have to work even more hours to make up for these mistakes.
• Bolster your support system. Give yourself the gift of a trusted friend or co-worker to talk with during times of stress or hardship. Ensure you have trusted friends and relatives who can assist you when you need to work overtime or travel for your job.
• Seek professional help. Everyone needs help from time to time. If your life feels too chaotic to manage and you're spinning your wheels worrying about it, talk with a professional, such as your doctor, a psychologist or a counselor recommended by your employee assistance program (EAP).

Services provided by your EAP are usually free of charge and confidential. This means no one but you will know what you discuss. And if you're experiencing high levels of stress because of marital, financial, chemical dependency or legal problems, an EAP counselor can link you to helpful services in your community.

Remember, striking a work-life balance isn't a one-shot deal. Creating balance in your life is a continuous process. Demands on your time change as your family, interests and work life change. Assess your situation every few months to make sure you're keeping on track.

Balance doesn't mean doing everything. Examine your priorities and set boundaries. Be firm in what you can and cannot do. Only you can restore harmony to your lifestyle.

May 31, 2008

© 1998-2008 Mayo Foundation for Medical Education and Research (MFMER). All rights reserved. A single copy of these materials may be reprinted for noncommercial personal use only. "Mayo," "Mayo Clinic," "MayoClinic.com," "EmbodyHealth," "Reliable tools for healthier lives," "Enhance your life," and the triple-shield Mayo Clinic logo are trademarks of Mayo Foundation for Medical Education and Research.

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Work enjoyment helps employee retention by Derek Stockley

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If you are facing employee retention issues, this free article by Derek Stockley may help.

Employee friendly policies and practices

Young people are more mobile and less committed to individual organisations. The baby boomers are approaching retirement age.

To retain staff, organisations have to be more flexible, ensuring that work/life balance is possible.

When we talk about work/life balance, we tend to picture in our mind couples with young children. It actually applies to all employees. Work/life balance applies to young, single people and older people seeking shorter working hours.

People want to experience life. They want to travel. They want flexibility and because of the skills shortage, they can seek out organisations that cater for these aspirations.

So organisations need to have supportive policies like sabbaticals (12 months leave of absence without pay) and flexible working hours.

Once the policies are in place, managers and team leaders need to implement them correctly. Workplace flexibility is much harder to manage. Sometimes it hard to meet operational demands when everyone wants Friday off to make it a four day weekend (eg. Queens Birthday public holiday on the Monday). But it has to be managed. The good intent behind the flexibility policy is lost if it is too much hassle to get the time off you need. There has to be a match between reality and expectations.

These things are about the interaction between work and private time.

What about the time actually spent at work?

Work environment and culture

'Choose a job you love, and you will never have to work a day in your life'

Confucius (551-479 BC), Chinese philosopher

Employee retention is about the nature of the work itself and the work environment/culture.

What can you do?

Firstly, you have to get the basics right - good pay, appropriate conditions, etc.

Secondly, you have to remove the fear of uncertainty - employees should feel safe and secure in their employment. They should not be concerned about your employment practices. They should not picture you 'with a whip'.

Thirdly, you have to work hard to create and maintain a good work culture and climate.

I define culture as 'the way we do things around here' and climate as 'how things are around here'.

The culture should be friendly, work focussed but not obsessed. People should have fun when the pressure is off and work hard when the pressure is on.

At the time I worked in the health insurance industry, the federal government kept changing the system, meaning major system changes every 12 months or so.

I was actively involved in change management (policies, systems and the like), so I found the work very challenging and motivating. But all the staff 'got a buzz' from the peak workload as many customers made contact simultaneously. For about four weeks every year, work was extremely busy, and then workloads would return to normal levels. It was serious. It was fun. It would have been impossible to work at that pace all year, but the 'positive feeling' of a job well done lasted a long time.

The organisational culture and climate supported staff in this peak workload. It was appropriate. It worked.

Conclusion

There are many facets to employee retention. It is much more than having appropriate organisational policies. It involves successfully implementing good policies and creating a positive work culture and climate. It requires positive action by team leaders and managers.

Personal reflection

• Do you like your job?
  
  
• In line with the Confucius quote, do you love your job?
  
  
• Do your team members like their jobs?
  
  
• Do you work in an organisation with a positive culture and climate?
  
  
• What did you do this week to actually help achieve the best climate and culture possible?
  

Source

* BRW. December 8-14, 2005. Page 41.

Work life Balance – an overview by Nick Halpin PhD © The Counseling Service, The University of Dundee.

Work life Balance – an overview
	A balanced life is one where we spread our energy and effort - emotional, intellectual, imaginative, spiritual and physical – between key areas of importance. The neglect of one or more areas, or anchor points, may threaten the vitality of the whole. The term ‘work-life Balance’ was first coined in 1986 in reaction to the unhealthy choices that many Americans were making in favour of the work place, as they opted to neglect family, friends and leisure activities in the pursuit of corporate goals. Much of the following derives from newspaper articles, internet items and from Madeleine Bunting’s excellent review of this topic in her recent book ‘Willing Slaves – How the Overwork Culture in Ruling our Lives’ (Harper Collins, 2004). The facts are easy to come by and they make startling reading: Americans in full-time employment increased their weekly average hours of work between 1977 and 1997 by 3.5 hours, taking it to 47.1 hours. In a study of UK workplace managers by Wheatley (2000) 65% said work was damaging their health and 77% admitted that it affected their relationship with their children. The Office of National statistics (ONS) found that most couples spend more time apart than together, with most of the time that they do share spent watching television. Based on 21,000 diaries, the ONS discovered that the average British couple spends just 15 minutes a day enjoying a social life with each other (Independent, 16th July 2004). What is going on and what can we do about this? The work place. Over the past twenty-five years there has been a significant intensification of work, driven in part by information technology, by an increasing vulnerability to competition and by the deregulation of the workplace. Trust, long-term loyalty and a sense of corporate community have been eroded by a performance culture that expects more and more and offers little security in return. One in five British workers now report that they have been affected by stress and half a million people a year report stress levels that are making them ill (Health & Safety Executive [HSE] 3rd July 2002 and 11th October 2002). Britain’s full-time workers put in the longest hours in Europe at 43.6 a week, well ahead of the EU average of 40.3 (Eurostat figures, cited in ‘About Time. A New Agenda for Shaping Working Hours’, TUC, London, 2002). Yet it remains the case that, once committed to long hours of work, it’s hard to envisage a different schedule. In the Populus poll conducted for the Times (November 4th to 7th 2004) 78% stated that they would not choose to work fewer hours for less money with 52% saying they could not afford it. And yet it didn’t have to be like this. A hundred years ago the pundits were forecasting that technology would not only do away with household chores but provide us with unlimited leisure… We have chosen a different course, egged on by a consumerist culture and a political will that has ‘elevated the work ethic to unprecedented heights and thereby reinforced the low value and worth attached to parenting’ (M. Bunting, p. 313). The UK workplace agenda is poised uneasily between an American corporate thrust that drives its workers harder than ever before and a European approach where a variety of political cultures ‘set great importance on the social fabric – the welfare of children, the quality of life and the cohesion of communities and families’ (M. Bunting, p.303). American workers average about ten days of holiday a year, in contrast to Britain (25) and Germany (30). 26% of Americans take no holiday at all. Americans work twelve weeks more a year in total hours than do Europeans, and America is one of five countries that have no statutory maternity leave (Families and Work Institute, New York, 2001). Attempts to modify the workplace, such as the Kellog six-hour day, have thrown up some challenging alternatives, but the juggernaut of American business has chosen to ignore the social benefits. In Europe the Working Time Regulation with its ceiling on a 48-hour working week has been readily implemented, apart from Britain with its opt-out waiver. Many European countries have chosen to have much lower hours: The Netherlands has a 32 hour week for public sector workers; France tried to introduce a 35 hour week under Lionel Jospin and Finland experimented with a 30 hour week in 1996. The Finnish Experiment Between 1996 and 1998 the Finnish state experimented with a 30-hour week. Workers who participated said they enjoyed more time for other activities: 80% said they had more time for rest and relaxation; 75% for spending with family and children; 72% for fitness and exercise; and 68% for housework. Overall, employees who worked fewer hours reported less conflict between work and family responsibilities. Unlike the Scandinavian countries which pursued a ‘humanisation of work’ agenda with its emphasis on equal opportunity, child care, gender equality and the central role of the family, the UK, with its poor history of industrial relations, has often turned away from this consensual approach to the dubious merits of party political factionalism. The result is that the British worker lags behind his European counterpart in achieving a more viable work-life balance: His hours are longer: an average of 8 weeks more a year. There continues to be a marked reluctance to implement family friendly policies: proposals to improve maternity leave rights have met with fierce resistance (Times, 21.09.04). 46% of those working in even the best companies in the UK say that they are exhausted at the end of the day’s work (M. Bunting,). Family. Successful parenting, the culture of care and selflessness that are part of family life, requires energy, time, patience and a tolerance for mess and confusion… a tall order when the working day has proved stressful and long. The key question here is ‘who finds time to care for whom?’, for what often happens is that the time-consuming listening part of relationships gets ditched in favour of quick fixes, and then the unattended get to feel unloved and react accordingly. Families need nurturing, and our responses have to be sufficiently deep and elastic to accommodate the unexpected, not just the scheduled bits that fit in neatly with our jobs. Home. Home making is time-consuming. In the making of a home we create an atmosphere that reflects our sense of place in this world. Like a warm and familiar jumper, the home provides us with an extension of ourselves, a place where we can feel free in our emotions and content to be who we really are. The paradox is that the more we work, the more desperate we are to find such a home with its timeless associations and the less time we have to create it. Homes can so easily become houses, pit stops that provide briefly for sleep, rest and the bare essentials in the intervals between work. Friendships. It’s often been said that the art of friendship requires common skills to an uncommon degree: a combination of affection, tolerance and patience as well as a sense of constancy in times of struggle and difference. Yet when our work-life balance spirals out of control, often friendships along with exercise are the first things to suffer. In a report entitled ‘Social Trends; British Social Attitudes Survey 30 (HMSO 2000) a significant factor over the past two decades is that we are seeing less of our best friends. Yet, as the extended family gets to be geographically more and more challenged, our friendships become increasingly relevant to our circle of mutual nurture and support. Community. Like family, home and friendships, our local communities depend on our time and energy in order to function effectively, freely and spontaneously. It is in the reciprocal context of its activities that our communal identity can be experienced and enjoyed. Yet if we lose that vital life-work balance then the many activities through which neighbourhood and locality are expressed are marginalised and we are the poorer for that neglect. Hobbies, interests and sporting pursuits derive much of their meaning through our interaction with others. If we fail to address the issues of work-life balance as a society then one of the first casualties will be the richness and diversity of community life. Nick Halpin PhD © The Counseling Service, The University of Dundee.

The Yin and Yang of Change by Graham S. Lowe

The Yin and Yang of Change Graham S. Lowe

Abstract: The key to a better workplace is achieving balance between the structural and cultural forces at play.

One of the great truisms of 21st-century workplaces is that change is relentless. As management experts observe, in a world of heightened risk and uncertainty, the expectation of constant workplace change almost becomes comforting. The downsizing, restructuring, mergers and acquisitions that so many Canadian employees have experienced firsthand are proof enough that change has become the norm. But something's wrong with this popular image of workplaces being incessantly remoulded, like silly putty in the hands of a six-year-old. Why does research show that most major organizational change initiatives fail to achieve their intended goals? What stands in the way of the changes needed to foster innovation and productivity or create the kind of healthy and fulfilling work environment that engages and retains employees? These questions raise the basic paradox of workplace change. To help unravel this paradox, think of workplace change in terms of yin and yang, with complementary but opposing forces in constant tension. These forces are structures and cultures, the hard and soft sides of every workplace. Structures are visible in organization charts, head counts, job classifications, information technology and rules about how work should be done. Culture is the organization as a community -- the workplace's social glue created by shared meanings of how life in the office, at the service counter or on the production line ought to be lived. So the paradox comes down to this: The more that organizations change their structures, the greater the need for supporting change in elements of culture. In practice however, structural change goals usually trump cultural change goals. I often hear leaders belatedly acknowledging the need to 'fix the culture piece' in the wake of disruptive organizational restructuring or downsizing. I also hear managers describe their struggles to create better workplaces that deliver better results. Their goals vary but the big roadblock is figuring out a change process that resolves the yin and yang, balancing structures and cultures so they are truly complementary. Change ranges on a continuum from superficial to transformational, with the latter requiring significant adjustments in employees' behaviours and attitudes. Creating a healthy workplace is transformational change; introducing only a fitness program is superficial change. Change experts have a standard list of success factors for the kind of transformational change needed to improve work environments and organizational effectiveness. The list includes urgency, vision, leadership, coalition-building, communication and participation. Yet most transformational change initiatives are driven from the top and target the organization's structures and systems. Success in structural change may depend on building a new culture and new ways of working. This takes time, easily three to five years. Progress is seen in small steps. This makes it all the more critical that individuals championing a change agenda pay careful attention to the implementation process. The best way to avoid change traps is to align structural and cultural change by ensuring that the change process has integrity. Step 1: Remove barriers Effective implementation requires putting in place enabling conditions that help make the organization change-ready. Identifying and removing barriers is crucial. A big barrier to change is inertia: the dead weight of past practices that have gone unchallenged. In part, this stems from a lack of information about alternatives. Remarkably, when larger organizations put employee development, engagement and retention goals on their agendas, they often discover pockets of internal excellence. If this new information generates lessons that help other units improve, then inertia can be overcome. Time scarcity is one of the greatest change barriers. Overworked, stressed-out employees won't embrace a new change initiative, even one aimed at improving their work environment. So if executives want to champion changes to boost performance or improve workplace morale, they could start by freeing up time for employees to get involved in the process. Lack of support among front-line managers also short-circuits change. As early management consultant Frederick Taylor complained 100 years ago, the greatest opposition his scientific management techniques faced came not from workers -- some of whom protested through strikes -- but in the form of passive resistance among front-line supervisors. Today, supervisors fear the loss of what little power they have. They may also lack the skills needed to play an enabling role in change, so managers at all levels must be equipped to make positive contributions. Above all, aligning structural and cultural change is unlikely as long as leaders have the mindset that employees are costs rather than assets. Step 2: Design a process that fits the context There is no one best way to renew an organization and no shortlist of best practices. Imposing reorganization from the top often results in staff feeling demoralized, insecure and powerless. Goals won't be met. So the lesson from this top-down approach is to adopt a process that engages employees in actively renewing the workplace. This makes change a learning activity for the whole organization, allowing for continuing readjustment. That way, structures and cultures evolve together. And structural change won't deflect attention from people goals, which increasingly are strategic priorities. A case in point is health care, where regionalization of health services in some provinces wrought turmoil on the front lines. As one hospital administrator described a provincial government's decision to redraw regional boundaries, "they just blew us up again." No wonder the goal of creating better workplaces able to deliver better patient care gets sidelined when health care mangers are preoccupied with figuring out how the new regional structure will function. Mergers are the corporate world's shotgun weddings, intent on getting the parties under one roof in a hurry rather than building a thriving relationship. And the process may grate against the existing employee values. In the Hewlett-Packard-Compaq merger in the United States and the Telus-BC Tel and Air Canada-Canadian Airlines mergers in Canada, blending very different workplace cultures proved to be more arduous than creating the new corporate entities. In both Canadian examples, unions duked it out over seniority rights and representation, which divided the employee groups rather than bringing them together. Respecting local contexts also is important. A cautionary tale comes from a large telecom company that recently introduced the 'fish philosophy' to improve customer service in its call centres. It's based on the playful antics of fishmongers at Seattle's Pike Place Fish market. The fish philosophy says work should be fun, encouraging a total focus on customers to reduce turnover, foster team work and improve customer service. Research I took part in found stark differences in employee reactions to this new culture in Vancouver, Toronto and Montreal call centres. The Vancouver centre was newer and staffed by twentysomething workers who, as west coasters, thought fish were "cool" and knew about the Seattle fish market. However, the longer-established Montreal call centre had an older, more highly educated work force that reacted with cynicism. The lesson: take an organic approach to culture change by nurturing it from within. Tailor the changes to fit the setting, adapting off-the-shelf culture change programs accordingly. The key point is to align structures and cultures so they change together. One Canadian employer, MDS Nordion, did this by striving to create a healthy and high-performing workplace within a sweeping strategy for organizational transformation after it was spun off from Atomic Energy of Canada Ltd. in the 1990s. In structural language, this was privatization. But by giving equal priority to employees and performance, MDS Nordion went on to success. Step 3: Guide the change process by strong values Values-based change draws on the strengths of existing cultures in organizational renewal. EnCana Corp., a Calgary-based oil and gas company, took an interesting approach. Born in 2002 when Alberta Energy Co. Ltd. and PanCanadian Energy Corp. merged, EnCana set out to create a new high-performance culture. The centrepiece is a "corporate constitution," which, according to CEO Gwyn Morgan, will "foster complete, transparent accountability" for behaving according to the values as the means for achieving EnCana's vision. The new culture is rooted in a shared set of "moral principles," which define specific values that guide behaviour. These principles also define behaviours not tolerated, such as "avoiding accountability," "uncaring efforts" and "failure without learning." We don't have to look far for other successful companies that have taken a values-based approach to change. As Samppa Ruohtula, a manager at Nokia Corp.'s headquarters in Finland, explained to me, Nokia's values provide stability in a dynamic global business and technology environment. The Nokia way of working rests on four values: customer satisfaction, respect, achievement, and renewal. As Nokia emphasizes, "believing in these core values and living them every day is our common bond and shared philosophy." This is how the world's leading mobile communication company focuses the energies of more than 50,000 employees in 50 countries on its market goals. Global companies face the task of melding elements from local external cultures with corporate values in a positive way. Research on International Business Machines Corp. employees around the world found that, despite IBM's efforts to create a dominant corporate culture, workplace practices were also shaped by local customs. So the latest management models for changing organizational designs or people policies will get filtered through these local cultural lenses. The challenge is to draw on strengths of grass-roots cultural elements from inside and outside the workplace. For example, a recently acquired Houston energy company had a hard-driving entrepreneurial culture, which also valued employee recognition and fun. The day a big deal was signed, the president threw a party, complete with a mariachi band and margaritas. While the new multinational owner's head office recognized the need for overarching corporate values, it also realized that Houston's exuberant culture contributed to the company's growth -- a major reason for the acquisition. Ideally, change should provide opportunities for learning, improvement and talent development. These goals can only be reached if all dimensions of the organization are in sync. That's how rebalancing the yin of structure with the yang of culture will positively shape the future workplace. About the Author Graham Lowe is a workplace consultant, researcher and workshop leader. He is the author of The Quality of Work: A People-Centred Agenda. Acknowledgements © The Globe and Mail. Republished with permission. All Rights Reserved. No part of this article may be reproduced or republished or redistributed without the prior written consent of the copyright holder.

Human Resources in Indonesia By Ames Gross, Summer 1997, By Pacific Bridge, Inc.

Human Resources in Indonesia By Ames Gross Summer 1997 By Pacific Bridge, Inc.

Overview Over the past several years, Indonesia’s economy has experienced rapid growth. Indonesia increased its per capita GNP 1000% between 1967 and 1993 – from $70 to $700. (1) Indonesia ’s robust economic growth was initially stimulated by its government policies. In 1986, following a sharp decline in oil prices, the government initiated a structured deregulation package. The package allowed the government to stabilize and adjust the Indonesian economic structure through the use of strict fiscal policy, deregulation and institutional reform. As a result, Indonesia experienced a boom in both domestic and foreign investments that propelled the economy on a path of rapid export-oriented labor-intensive growth.(2) Employment Trend Rapid economic development has fundamentally altered the structure of Indonesia’s labor force over the past two decades. In 1971, less than 40% of Indonesian labor worked in the industrial and service sectors, while over 60% worked in the agricultural sector. However, as members of the Indonesian workforce moved away from agriculture and towards trade and manufacturing, this distribution changed dramatically. By 1990, only 54.8% were employed in the agricultural sector, showing a progressive decrease in agricultural workers. Of the remaining workers: 14.7% were working in trade, 13.1% were engaged in service industries, 11.4% were involved in manufacturing, and the remaining individuals were distributed in other industries.(3) The dramatic economic growth also altered the gender composition of the workforce, as the need to improve family economic conditions induced an increasing number of women to enter the workforce. The following table illustrates this trend: Table 1. Number of Workers Employed in Manufacturing in Indonesia by Gender, 1982-1990 Number of Employees 1982 (‘000) 1986 (‘000) 1990 (‘000) Total Increase 1982-1986 Total Increase 1986-1990 Male 1,852 2,113 2,779 14% 32% Female 879 992 1,517 13% 53% Source: Indonesia Labor Market Policies and International Competitiveness, The World Bank, Sept. 1995. Another impact of the foreign and domestic investment boom was an increase in working opportunities, which in turn led to an elevation of the employment rate.(4) Between 1971 and 1990, employment increased from 37.6 million to 71.6 million, while unemployment decreased by 1.3 million within the same period of time. (5) The size of the Indonesian labor force increased from 41.3 million in 1971 to 82.2 million in 1993.(6) In 1995, the US Commercial and Information Center in Jakarta estimated that 75% of the 83 million people in the labor force are between the ages of 15 and 34.(7) Furthermore, the center noted that the labor force is thought to be growing at about 2.8% per year despite the fact that population growth has declined to 1.7%.(8) At the current labor force growth rate, developing and creating adequate employment opportunities has become one of the most pressing priorities facing the Indonesian government. In addition, Indonesia is experiencing shortages of valuable managerial and professional personnel. Acquiring the Best Employees The existing skilled management personnel in Indonesia are well aware of the demand for their services and tend to charge accordingly. A number of companies cope with the shortage by importing staff, although the process can often be significantly more expensive. When a company hires an expatriate, it must consider a variety of costs – housing, schooling for dependent children and health insurance – as well as other benefits, such as a car with driver. In addition, the Indonesian government limits the number of work permits granted to expatriate staff. (9) Another tactic used by many multinational companies in order to overcome the shortage of skilled managerial employees is the development of qualified local staff through in-house or on-the-job training. However, this process can be expensive and there is always a possibility that competitors will lure away the trained employees. For growing local companies, pirating staff from multinational companies offers a quick and easy solution to the need for management and professional staff. Pirating has helped local companies to get the level of education they need from their candidates, as many multinational companies maintain a strong reputation for good in-house training. In addition, pirating may also occur among multinational companies themselves. Many of these cases arise when a professional asks for a higher salary than the initial company can afford to pay. Recruiting Indonesian students who study overseas is another option for companies to cope with the shortage of skilled personnel. In the United States, the recruitment is usually done through Home Country Placement – a program conducted by Northwestern University in Boston as part of its “Cooperative and Education Service.” This center receives requests from more than 400 major Indonesian and US companies daily; the inquiries are then matched with student profiles. The center also assists the US Indonesian Student Association (PERMIAS) by hosting an Indonesian Job Fair each year. Recruiting recent Indonesian graduates from overseas universities has provided employers the opportunity to recruit the best employees straight from university. The Indonesian government readily acknowledges that training a sufficient number of skilled workers to meet the growing demands of the rapidly moving economy is one of the greatest challenges facing Indonesia. The government further understands that the failure to develop the essential manpower skills to maintain economic growth could result in the loss of economic opportunities and an inability to compete internationally.(10) Human Resources Development Aware of the need for human resources development, the Indonesian government has made a concerted effort to make development a high priority and to improve the quality of human resources. In its Repelita VI five-year development plan, the primary goal of human resource development in Indonesia is “to increase the capabilities of each individual and thus all of Indonesian society as a whole.” Furthermore, “This will be reflected in religious beliefs, improvements in physical and mental health, development of knowledge and skills, increased adherence to a productive work ethic, a sense of national responsibility, and increased awareness and understanding of the importance of preserving natural resources and the ecosystem. Other goals include the development of a sense of self-reliance, development of leadership and entrepreneurial skills, and an increased number of national development cadres who have patriotism, perseverance, initiative, discipline, social awareness and awareness of their rights and duties.” (11) Indonesia’s policymakers are now redefining the role of the government, from being the sole provider of education to the catalyst for stimulating private-sector training programs, including employer-sponsored schools, vocational centers, and polytechnic schools. (12) According to the World Bank, the higher education system in Indonesia has grown rapidly during the past 20 years. General education gains, investment in a wide range of training facilities and various forms of on-the-job training has improved the skill level of Indonesia’s labor force. Skills training is provided either through senior vocational high schools, which account for 27% of upper secondary enrollments, or through public training centers that offer short specialized courses in targeted disciplines. (13) As part of the government’s effort to improve the quality of human resources, it implemented the “Nine Years Compulsory Education Program” in 1994. The program is an extension of the previous six-year compulsory education program that the government originally launched in 1984. In the new program, children between seven and 15 years of age are required to attend school for nine years, including six years of primary education and three years of intermediate education. Despite the existence of this program, 76% of the total workforce in 1994 only possessed a primary educational background. Beginning in January 1997, the Indonesian government will impose a US $100 levy on every expatriate in order to establish a skills development fund to help local professionals. In addition, companies in the financial and manufacturing sectors must pay compulsory training levies to equip Indonesians with the skills necessary to do the work currently performed by expatriates. In 1996, a US $20 million loan from the World Bank was used to finance a US $25 million Social Sectors Strategy and Capacity Building Project. The main objective of this project is to strengthen Indonesia’s efforts to sustain high income growth rates and poverty alleviation, improve the quality of social sector services, assist with the transition towards decentralization, and enhance the development impact of investment.(14) In the same year, the Asian Development Bank also gave a US $80 million loan to Indonesia to upgrade technology capabilities of Indonesian industries. (15) Building Working Relationships with Indonesians According to Bruce Gillespie, chief consultant of Wings of Eagles, a program that has conducted many in-house training programs in Indonesia, building positive relationships with Indonesians is easy as long as you are honest, open and sincerely interested in each person as an individual. Furthermore, Gillespie commented that consultants, experts and mentors must be adept at building relationships in the same way that Indonesians build relationships - with sincerity, warmth and commitment.(16) Indonesians love to learn. The company can stimulate its employees by giving sources of information for those employees who wish to further develop their expertise. Another useful technique is to provide numerous learning challenges in actual daily work. Follow-up action is important, since it demonstrates that the management staff cares about the ability level of their staff and lets the employees know that their work is important. (17) Indonesia is a country ingrained with strong cultural traditions. Therefore, it is crucial for a company to consider cultural values in order to be successful in Indonesia. For example, religion is an important part of Indonesians’ everyday life. Muslims need time for their everyday prayer, while Hindus (especially in Bali) have a specific daily schedule for religious rituals. In addition, when a company is planning to provide a cafeteria at employee’s facility, the company should be aware that meals must be prepared in a accordance with Islamic traditions.(18) Another cultural tradition that Indonesians value is harmony and consultation leading to consensus. Lastly, Indonesians tend to confront issues in an indirect manner as an adherence to Indonesian concepts of politeness and aversion to embarrassment. (19) Employees’ Wage Rate and Benefits Citibank advises foreign investors “it is unwise to see Indonesia as a nation which can provide profit merely by virtue of its cheap labor.” However, Citibank also noted that major foreign companies report that Indonesian workers’ quality and productivity can be as high as elsewhere as long as the company provides the workers with reasonable wages, a good working environment and a positive channel of communication between management and workers.(20) In Indonesia, the Ministry of Manpower regulates the minimum wage rate, or the lowest basic wage including permanent allowances. The minimum wages are fixed by calculating the level of “minimum physical need” (KPM), costs of living and labor market conditions. The minimum wage level is calculated for each region, and differs according to location. (21) Indonesia first introduced its minimum wage legislation in 1989. Since then, the government has continuously increased the minimum wage level to meet the changes in KPM figures. As a result, the minimum wage rate in several regions is now equal to the KPM.(22) In April 1996, the government increased the minimum wages by an average of 10.63% per region. The daily minimum wage for the Jakarta area was increased from Rp 4,600 to Rp 5,200 per day or Rp 156,000 per month.(23) The minimum wage rate does not include the overtime wage rate, which is 1.5 times the hourly wage rate for the first day and two times wages per hour for the following days. The overtime rates on public holidays differ from the overtime rate on regular days. Pregnant and young workers may not participate in overtime. In September 1994, the Ministry of Manpower issued a decree that requires all companies to pay a 13th month of salary – basic salary and fixed allowances – timed with major religious holidays. As of 1993, the monthly wage rate was Rp5 million (US$2,430) for managers, Rp2 million (US$971) for executive staff, Rp500,000 (US$243) for clerical staff, Rp400,000 (US$194) for skilled labor and Rp200,000 (US$97) for unskilled labor.(24) Nevertheless, The World Executive Digest reported that Indonesia’s executive salaries in 1995 were still lower than those in most other ASEAN countries. The aforementioned reported salaries do not account for various benefits paid by the company which may include taxes, car with driver, credit cards, executive club membership, transfer fees, etc. Overall, the difference in the total salary package might not be as great as it appears.(25) Table 2. Indonesian Executive Salaries (in millions of Rupiah per month after tax) by Industry Industry CEO/Director Vice President Senior Manager Banking 27.0 - 41.0 7.5 - 11.2 6.9 - 7.8 Security 10.0 - 19.0 6.0 - 9.0 4.5 - 5.75 Trade & Distribution 12.5 - 20.0 7.0 - 9.5 3.5 - 5.5 Multilevel Marketing 6.8 - 9.2 5.5 - 7.5 3.5 - 5.0 Telecommunication 18.0 - 35.0 9.0 - 11.0 6.5 - 9.0 Source: Executive Salaries, Indonesia Business Center Online, www.indobiz.com. In 1978, the government established the Manpower Insurance Program (ASTEK) for civil servant employees. The government broadened the scope of the program in 1992 so that it would also cover employees in private sectors.(26) The new program was enacted through Law Number 3 of 1992 that is known as JAMSOSTEK. Initially, companies that employ more than 10 persons or have a payroll of at least Rp1 million per month are obligated to participate. However, companies that already offer superior benefits may choose not to participate in the program. The law covers life insurance benefits, retirement funds, free health care for workers (including spouses and up to three children), and compensation for work-related accidents and illnesses. The employer’s contribution and 2 percent of employee’s wages provide funds for the program for the retirement fund. PT ASTEK, a state owned enterprise, is responsible for administering the program.(27) Regulations(28) Besides regulating the minimum wage and detailing the employee’s insurance program, the Indonesian labor law delineates the regulations for standards of working conditions, the formation and rights of unions, and rules in employing expatriate staff. The minimum age for employment in Indonesia is 15 years old, while the maximum workday is 7 working hours per day or 40 hours a week. Working hours may be extended to 9 hours a day, 54 hours a week with overtime pay. The regulation further stipulates that employees will receive at least a half-hour rest after 4 successive hours of work as well as 1 day of rest per week. The single rest day per week can be changed into 2 rest days per week given an agreement from workers regarding an 8-hour workday. Annual leave entitlement for all Indonesian workers is 12 days a year. After six years in the same organization, a worker is further entitled to three months leave. Female employees may not be obligated to work on the first and second days of their menstrual periods. Although the official length of maternity leave is 1.5-3 months before and 1.5 months after birth, the law allows for a maximum three-month extension before the expected date as long as a medical certificate accompanies the request. A trade union at any level must register with the Ministry of Manpower. Furthermore, unions must be registered in order to enter binding negotiation contracts at any level. Collective labor agreements by “independent” unions beyond the plant level are still effectively impossible. Although termination of employment on the basis of establishment of union membership is not permitted, the law allows a company to fire any worker who does not show up for work for 6 consecutive days without a valid explanation. The Ministry of Manpower may also require that an employer extend negotiated benefits to non-union employees in an establishment. Furthermore, the ministry can decide whether part or all of a collective labor agreement can be applied to other employers/employees in the same field of activity. The settlement of industrial relations disputes must go through several stages, such as bipartite negotiations, mediation by a Ministry of Manpower official and settlement by regional and central committees. Central committee decisions are binding unless nullified by the Ministry of Manpower. Workers may strike only if negotiations with an official fail or if the employer refuses to negotiate. They must notify the employer and the Chair of the Regional Committee of their intention to strike, and may only strike after the Chair has acknowledged the receipt of notification (usually within 7 days). A strike must be suspended if there is an official inquiry. The unionization process has been slow, due to Indonesian society’s lack of familiarity with trade union practices. Although approximately 40% of the labor force is unionized, the Hong Kong and Shanghai Bank estimates that active membership is only around 5-10%. Currently, Indonesia has only one recognized union, the All Indonesia Workers Union (Serikat Perburuhan Seluruh Indonesia - SPSI), an organization that is further differentiated into industry-based sections. The government has insisted that an SPSI branch should represent organizations with more than 25 employees. According to Citibank, the government took this action in response to outside pressure from overseas. Many critics question the effectiveness of SPSI as the employees’ representative, since factory managers often appoint branch union officials. In addition, since negotiations are typically based on Indonesia’s preferred consensus system, workers charge that the results are often biased against them. In the past, this has led to a large number of strikes occurring without prior notification to the Ministry of Manpower. Strikes usually relate to employers’ failure to pay the minimum wage, denial of benefits, poor working conditions, and the termination of employees without just cause. If a company elects to employ expatriate staff, it must conform to regulation number 4, which requires the company to submit a training plan for Indonesian nationals. The goal of this training plan is to educate and train Indonesian nationals to later take over positions currently performed by expatriates. In most manufacturing industries, blue collar and supervisory level positions are closed to foreign workers, while there is three-year limit for technical staff. In other sectors such as export marketing, tourism and consultancy, work permits are not difficult to obtain. For all positions, a sponsorship letter is required from the company or government agency. Foreign investors who are going to set up an office in Indonesia must submit a manpower plan to the Investment Coordinating Board. Foreign investors are allowed to fill director positions in capital investment companies in direct proportion to the foreign shareholding for such companies. Expatriate employees enter Indonesia on a business visa that can later be transferred to a one-year temporary residency visa (KIM-S). This visa must be renewed each year with a new letter of sponsorship. Dependents of the aforementioned expatriate employee may enter the country with a social and cultural visa. The process of obtaining the KIM-S (one-year temporary residence visa) is long and arduous. As a result, many companies prefer to employ an agency to handle the work permit application process. Currently, the Indonesian government is drafting a new labor law that will review the procedures relating to employment of expatriate staff. With unemployment at 7.24% in 1995 and as many as two-thirds of local graduates unable to find jobs, the new law will attempt to reduce the number of expatriates in the country. (29) Conclusion The rapid growth of Indonesia’s economy is expected to continue well into the next century. The government has been stimulating economic growth by deregulating previous laws in order to entice investors. New investments will mean new working opportunities that are badly needed to accommodate the growth of Indonesia’s labor force. Simultaneously, Indonesia is experiencing a shortage in managerial and professional personnel. Therefore, further investment in human resources is still needed to allow Indonesia to retain its international competitiveness. In answer to this challenge, the government has continuously improved the Indonesian educational system and human resources development as well as the labor law. End Notes “Economic Trends and Outlook Economic Development”. Indonesia Commercial Guide. US Commercial and Information Center. Jakarta. IndonesiaNet, Inc. Oct 1995. p. 1. Agrawal, Nisha. “ Indonesia Labor Market Policies and International Competitiveness”. Office of the Vice President of Development Economics. The World Bank. Sept 1995. p. 2. ”Human Resources Development”. http://www.bkkbn.go.id. Jun 20, 1997. p. 2. Ibid. p. 2-3. “ Indonesia - A Quarter Century of Progress 1968-1993”. Republic of Indonesia. 1993. p. 54. “Business Profile Series: Indonesia”. 7th Edition. Hong Kong & Shanghai Banking Corp. Ltd. Dec 1993. p. 28. “Economic Trends and Outlook Economic Development”. p. 7. Ibid. p. 7. ” Indonesia, an Investors guide”. Citibank - APEC Edition. 1994. p. 119-120. ” Indonesia, Lessons of Development”. National Development Information Office, Republic of Indonesia. 1992. p. 11. ”REPELITA VI, Indonesia Sixth Five Year Development Plan - 1994/95 - 1998/99”. Department of Information, Republic of Indonesia. 1995. p. 73. ”Indonesia, Lessons of Development”. p. 11. Ibid. p. 11. Versak, Kimberly. “ Indonesia Invests in Human Resources”. The World Bank Group Press Release. Jun 20, 1997. p. 1. ”ADB Approves $80 Million Loan to Indonesia for Industrial Technology and Human Resource Development Project”. Asian Development Bank Press Release. March 28, 1996. p. 1. Gillespie, Bruce. “Upgrading Training to Meet Future Needs”. Outlook/Indonesia. Vol. 9, No. 4. December 1994. p. 2. Ibid. p. 2. Ibid. p. 2. “Economic Trends and Outlook Economic Development”. p. 7. ” Indonesia, an Investors Guide”. p. 120. ” Indonesia Labor Market Policies and International Competitiveness”. p. 16. Ibid. p. 16-17. ”Minimal Wage Increased”. Indonesia Business Center Online. www.indobiz.com/news1.html. Jun 20,1997. p.11. “Business Profile Series: Indonesia”. p. 28. ”Executive Salaries”. Indonesia Business Center Online www.indobiz.com/news1.html. Jun 20, 1997. p. 11. “ Indonesia - A Quarter Century of Progress 1968-1993”. p. 55. “ Indonesia Labor Market Policies and International Competitiveness”. p. 21-22. “Business Profile Series: Indonesia”. p. 28. “ Indonesia Labor Market Policies and International Competitiveness”. p. 44 - 60. “ Indonesia, an Investors guide”. p. 120 -121. “Business Profile Series: Indonesia”. p. 28. “Economic Trends and Outlook Economic Development”. p. 7. Sim, Susan. “ Jakarta to Review Expatriate Workforce”. The Strait Times. Jun 18, 1997.