Research Of Human Resources Management Issues In Indonesian Small Medium Enterprises

Indonesia is one of the Southeast Asian countries that is continuing to rebuild its economy following the Asian Economic Crisis of 1997. More than a decade after the crisis, the recovery process still continues, however this crisis has hit almost all Indonesian companies including small and medium-sized enterprises. The key to dealing successfully with such a crisis lies in the strategic models and the empowerment model, change is needed not only to business strategies but also to HRM policy and practices. Furthermore, HR managers need to apply strategic HRM as a means of strengthening company effectiveness and competitiveness. Prior studies of HRM practices in Indonesia focus on large companies and pay little attention to Indonesian SMEs. Therefore, there is limited information available on the development of HRM practices in Indonesian SMEs. In fact, small and medium-sized enterprises (SMEs) play an important role in Indonesian economic development. They contribute the greatest part of national Gross Domestic Product (GDP), they are support export growth and help the development of entrepreneurship, industry and the rural economy. However, due to many SMEs there is a lack of funds, several aspects of employee quality is not high, culture with the characteristics of family management, effective talent management has become the important problem restricting the development of SMEs. Therefore, based on the theory of modern human resource management, analysis of Indonesian SMEs human resources management and the main problem factors, is a valuable research topic.This paper is divided into five parts. First, this paper analyzes the background and significance of Indonesia’s human resource management issues for SMEs; secondly at home and abroad on SME human resource management and related research is reviewed and summarized the theory, the theoretical basis for the study of the article; the third analysis Chinese Human resource management experience and Western human resource management experience; fourth analysis Indonesia SME human resource management practices, identify existing major problems in Indonesian SME human resource management. Fifth, according to the results of the survey on how to improve human resource management in Indonesia proposed a series of measures that improve the leadership of the importance of human resource management knowledge, solve labor problems and improve the strategic human resource management planning, improve the training system, an increase in pay and management, and human resource management for SMEs in Indonesia made recommendations accordingly. If Indonesia can improve the human resource management of Indonesian SME, it also can improve the competitiveness of Indonesian SMEs in the face of ASEAN Free Trade Area.