2005 Mercer All Industries Survey Overview (ne)

INDONESIA 2005 All Industries Survey – Non Executive

Overview

About the Survey

About the Report

Mercer Human Resource Consulting is pleased to present the 2005 Indonesia All Industries Survey.

The report is divided into sections, described below.

All Industries Survey Profile Organizations Participating in Survey Incumbents Represented

213 100,933

If You Have Questions

Overview – Provides information on the following: • List of participating organizations • Participant Profile • Economic Trends and Indicators • Salary Movement Trends • Staffing Trends • Starting Salaries Trends

If you have questions regarding the survey or the report, please contact the Survey Manager, Abdul Hafizh at (+62-21) 5790 5566 or email [email protected]

Confidentiality To ensure the confidentiality of all data, a minimum number of observations are required in order for statistics to be displayed. Three organizations must report at least three observations for a variable in order for the mean to be displayed. Four organizations and four observations are required for display of the median. Five organizations reporting at least five observations is required to display 25th and 75th percentiles. In order for the 10th and 90th percentiles to display, five organizations reporting at least 10 observations are required. Where there has been insufficient data for analysis, this has been indicated with "-". Human resource professionals who deal regularly with surveys are aware of the variance that may exist in survey data. Data may fluctuate slightly from year to year due to changes in the participant base. It is also important to note that within a sample, a significant amount of data may be reported by one organization. It is possible for data to change drastically from year to year due to industry-related factors and economic conditions. Numerous layoffs and changes in pay policies may significantly influence fluctuations in salary survey data.

©Mercer Human Resource Consulting, LLC.

Incentives and Benefits Prevalence - Provides an overview of the prevalence and practices and policies regarding short- and long-term incentives and benefits plans. Regression Analysis - Provides the regression analysis based on actual market data and Mercer's International Position Evaluation (IPE) classifications. Regressed Market Table-Displays regressed statistics. Regression lines are based on individual incumbent data following Mercer’s standard process. A process has been implemented that reduces the influence of organizations reporting a large sample size relative to other participants. This differs from the data in the “Actual Market Data by Position Class” report which represents all data. Pre-established Actual Market Data Reports - Provides the statistical analysis of actual market data for the survey positions. Survey Methodology - Provides a description of the methodology used in analyzing the data collected and definitions of all variables and statistics included in the survey report. The valuation methodology for determining benefit values and the values for long-term incentives are also described.

Overview - 1

INDONESIA 2005 All Industries Survey – Non Executive List of Participating Organizations

Overview Chemical Survey (Continued) 20. Chandra Asri

Automotive Survey * (10 participants)

21. Ciba Specialty Chemicals Indonesia 22. Clariant Indonesia

1.

Astra Honda Motor

23. Cognis Indonesia

2.

Astra International

24. DIC Astra Chemicals

3.

BMW Indonesia

25. Dow Chemical Indonesia

4.

DaimlerChrysler Indonesia

26. Dupont Indonesia

5.

Delphi Automotive Systems

27. DyStar Colours Indonesia

6.

Ford Motor Indonesia

28. EAC Indonesia

7.

General Motors Indonesia

29. Essence Indonesia

8.

Indomobil Suzuki International

30. Hercules Chemicals Indonesia

9.

Nissan Motor Indonesia

31. Huntsman Indonesia

10. Yamaha Indonesia Motor Manufacturing

32. Lautan Luas 33. Lautan Otsuka Chemical

Chemical Survey (34 participants)

34. Mitsubishi Chemical Indonesia 35. Monsanto Indonesia

11. Air Products Indonesia

36. Nalco Indonesia

12. Akzo Nobel Car Refinishes

37. National Starch And Chemical

13. Amoco Mitsui PTA Indonesia

38. Nuplex Raung Resins

14. Asahimas Chemical

39. Petrokimia Nusantara Interindo

15. BASF Indonesia

40. Quest International Indonesia

16. Bayer Indonesia

41. Rohm and Haas Indonesia

17. BOC Gases Indonesia

42. Sorini Corporation

18. Cabot Indonesia

43. Syngenta Indonesia

19. Celanese Rep Office ©Mercer Human Resource Consulting, LLC.

44. Tri Polyta Indonesia Overview - 2

INDONESIA 2005 All Industries Survey – Non Executive Consumer Goods Survey * (41 participants)

Overview

Consumer Goods Survey (Continued) 67. L'oreal Indonesia

45. AB Food & Beverages

68. Mayora Group

46. Adidas-Salomon International Sourcing Limited - Indonesia

69. Mead Johnson Indonesia

Representative Office

70. Nestle Indonesia

47. Amerta Indah Otsuka

71. New Zealand Milk

48. Arnott's Indonesia

72. Nutricia Indonesia

49. Avon Indonesia

73. Nutrifood

50. BAT Indonesia

74. PepsiCo

51. Cadbury Indonesia

75. Perfetti Van Melle Indonesia

52. Coca Cola Distribusi Indonesia

76. Philip Morris Indonesia

53. Coca Cola Indonesia

77. Procter & Gamble Indonesia

54. Danone Biscuits Indonesia

78. Reckitt Benckiser Indonesia

55. Danone Dairy

79. Reebok Worldwide Trading Co..

56. Effem Indonesia

80. SanMiguelPureFoods

57. Frisian Flag Indonesia

81. Sara Lee

58. Handjaya Mandala Sampoerna

82. Tirta Investama (AQUA)

59. Heinz ABC Indonesia

83. Trigaris Sportindo

60. IKEA Trading (Hongkong) Ltd - Indonesia Rep Office

84. Tupperware Indonesia

61. ISM Bogasari Flour Mills

85. Unilever Indonesia

62. Johnson & Johnson Indonesia 63. Johnson Home Hygiene Products 64. Kao Indonesia 65. Kimberly-Lever Indonesia 66. Kraft Foods ©Mercer Human Resource Consulting, LLC.

Hi-Tech Survey (22 participants) 86. Accenture Indonesia 87. Acer Indonesia Overview - 3

INDONESIA 2005 All Industries Survey – Non Executive Hi-Tech Survey (Continued) #

Overview Life Insurance Survey (11 participants)

88. Alcatel Indonesia

89. SCS Astra Graphia

108. Astra CMG Life

90. AT & T Global Network Services Indonesia

109. Asuransi AIA Indonesia

91. Cisco System Indonesia

110. Asuransi AIG Lippo Life

92. Convergys Indonesia

111. Asuransi Allianz Life Indonesia

93. Dell Computer Indonesia

112. Asuransi Cigna

94. Ericsson Indonesia

#

113. Asuransi Jiwa Sequis Life

95. HP Indonesia

114. AXA Services Indonesia

96. Intel Indonesia

115. Manulife Indonesia

97. Metrodata Electronics

116. MLC Indonesia

98. Metso Automation Indonesia

117. Prudential Life Assurance

99. Microsoft Indonesia

118. Sun Life Financial Indonesia

100. Mincom Indoservices #

101. Motorola Indonesia

102. Multipolar Corporation

119. Arutmin Indonesia

103. NCR Indonesia #

#

Oil & Mining Survey (15 participants)

104. Nokia Indonesia

120. Baker Hughes Indonesia

105. SAP Indonesia

121. Berau Coal

106. SAS International Indonesia

122. BHP Billiton

107. Sun Microsystems Indonesia

123. BP Upstream Indonesia

Included in Telecommunication Survey

124. Caltex Oil Indonesia 125. Castrol Indonesia 126. Freeport Indonesia 127. International Nickel 128. Kaltim Prima Coal

©Mercer Human Resource Consulting, LLC.

Overview - 4

INDONESIA 2005 All Industries Survey – Non Executive Oil & Mining Survey (Continued)

Overview Pharmaceutical Survey (Continued)

129. Kridapetra Graha (Shell)

150. Merck Indonesia

130. Newmont Nusa Tenggara

151. Merck Sharp & Dohme (Asia) Representative Office

131. Rio Tinto Indonesia

152. Novartis Biochemie

132. Tambang Batubara Bukit Asam

153. Novo Nordisk Indonesia

133. Unocal Indonesia

154. Organon Indonesia 155. Otsuka Indonesia

Pharmaceutical Survey (34 participants)

156. Pfizer Indonesia 157. Medifarma Laboratories, Inc.

134. Abbott Indonesia

158. Roche Indonesia

135. Alpharma

159. Sanofi-Synthelabo Combiphar

136. Astellas Pharma Indonesia

160. Schering Indonesia

137. Astrazeneca Pharmaceuticals Indonesia

161. Schering Plough Indonesia

138. Aventis Pasteur

162. Sterling Products Indonesia

139. Aventis Pharma

163. Takeda Indonesia

140. Bayer Indonesia (Pharma)

164. Tanabe-Abadi

141. Boehringer Ingelheim Indonesia

165. Transfarma Medica Indah

142. Bristol-Myers Squibb

166. Union Chemical Belgium (UCB)

143. Eisai Indonesia

167. Wyeth Indonesia

144. Eli Lilly 145. GlaxoSmithKline Indonesia 146. Janssen Pharmaceutica

Sales & Manufacturing Survey (Continued) (71 participants) (* Includes Automotive and Consumer Goods Survey)

147. Laboratoires Fournier 148. Les Laboratories Servier Indonesia 149. Meiji Indonesian Pharmaceutical Industries

168. 3M Indonesia, PT 169. ABB Sakti Industri 170. Argha Karya Prima Industry

©Mercer Human Resource Consulting, LLC.

Overview - 5

INDONESIA 2005 All Industries Survey – Non Executive Sales & Manufacturing Survey (Continued) (* Includes Automotive and Consumer Goods Survey) 171. Asahimas Flat Glass 172. Atlas Copco Indonesia 173. Caterpillar Asia (Indonesia) 174. Doulton

Overview Telecommunication Survey (Continued) 192. Siemens Indonesia 193. Telekomunikasi Indonesia 194. Telekomunikasi Selular

Others Survey (19 participants)

175. Frigorex Indonesia

195. AC Nielsen Indonesia

176. General Electric Indonesia

196. Alcon Laboratories - Indonesia

177. Husky Injection Molding Systems Indonesia

197. Austindo Nusantara Jaya

178. Komatsu Indonesia

198. Becton Dickinson Indonesia

179. Mattel Indonesia

199. Cargill Indonesia

180. Mecoindo

200. Cikarang Listrindo

181. NatSteel Electronics Indonesia (Solectron)

201. Dexa Medica

182. Philips Indonesia

202. DHL Express (Birotika Semesta)

183. Raja Garuda Mas International Corp.

203. Exel Indonesia

184. Schneider Indonesia

204. Johnson & Johnson Indonesia, Medical Division

185. Sony Indonesia

205. Keppel Land

186. Tetra Pak Indonesia

206. Maersk Indonesia

187. YKK Indonesia

207. Panalpina World Transport (Indonesia) 208. Primus Financial Services

Telecommunication Survey (11 participants)

209. Skypak International (TNT) 210. Sumitomo Indonesia

188. Aplikanusa Lintasarta

211. United Parcel Services Indonesia

189. Excelcomindo Pratama

212. UPS SCS Indonesia

190. Indosat

213. YTL Jawa Timur

191. Mobile-8 ©Mercer Human Resource Consulting, LLC.

Overview - 6

INDONESIA 2005 All Industries Survey – Non Executive

Overview

Participants Profile Industry Sector Breakdown Activity Analysis Survey participants were categorized by industry types as shown in the table below. *Percentage may not equal 100% due to rounding

Industry Automotive Chemical Computer/IT Electronics Manufacturing Food & Beverages Insurance Logistics Manufacturing Mining Oil & Mining Personal care Pharmaceutical Power Property Management Software Telecommunications Tobacco Trading Utilities Others TOTAL

©Mercer Human Resource Consulting, LLC.

Org Count 10 34 8 1 22 11 7 15 4 11 11 37 1 1 5 13 3 4 4 11 213

Percent 4.69% 15.96% 3.76% 0.47% 10.33% 5.16% 3.29% 7.04% 1.88% 5.16% 5.16% 17.37% 0.47% 0.47% 2.35% 6.10% 1.41% 1.88% 1.88% 5.16% 100%

Survey participants were categorized by industry types as shown in the table below. *Percentage may not equal 100% due to rounding

Type of Activity Assembly & Sales Manufacturing Manufacturing & Sales Research & Development Sales Sales & Marketing Services Combination of above Others TOTAL

Org Count 3 19 77 1 1 63 28 17 4 213

Percent 1.41% 8.92% 36.15% 0.47% 0.47% 29.58% 13.15% 7.98% 1.88% 100%

Overview - 7

INDONESIA 2005 All Industries Survey – Non Executive

Overview

Organization Size The following tables provide information about the size of the organizations participating in the survey based on their reported annual gross revenue/sales (in USD) and total employment. *Percentage may not equal 100% due to rounding

Revenue/Sales in USD Less than $25 million $25 million to < $50 million $50 million to < $100 million $100 million to < $250 million $250 million to < $500 million $500 million to < $1000 million $1000 million to < $3000 million $3000 million & more Total

*Org Count 80 33 37 20 22 6 12 3 213

*Percent 37.56% 15.49% 17.37% 9.39% 10.33% 2.82% 5.63% 1.41% 100%

* Percentage may not equal 100% due to rounding

Total Employment Less than 50 50 to 99 100 to 249 250 to 499 500 to 999 1000 to 2999 3000 to 4999 5000 to 9999 10,000 & more Total

*Org Count 27 27 39 52 33 18 7 7 3 213

©Mercer Human Resource Consulting, LLC.

*Percent 12.68% 12.68% 18.31% 24.41% 15.49% 8.45% 3.29% 3.29% 1.41% 100%

Overview - 8

INDONESIA 2005 All Industries Survey – Non Executive

Economic Developments and Trends

Political Developments and Trends Beginning August 2005 Indonesia experienced significant economic turbulence which tested the political leadership and crisis management ability of President Susilo Bambang Yudhoyono’s (SBY) government. The recent economic woes seem to have raised renewed public concern on the ability of the government to steer Indonesia towards a more sustainable economic and social development. Interestingly, given the current political climate where the President’s governing coalition controls the parliament, SBY’s challenge resides not with the mechanism of the political elite but rather with the populace who are beginning to feel the heavy burden of the current economic hardships triggered by rising global oil prices. Therefore, the issue of fuel price increases will continue to be at the center of policy debate until a more decisive judgment is taken. Much of the current economic situation resulted from the fuel subsidies which create a larger bill for the government as it imports fuel that is trending more expensive by the day. Many economic analysts, both domestic and international, see significant reduction of the subsidies, coupled with a tighter monetary policy, in order to increase financial market confidence in the economy. The risk remains that SBY succumbs to populist pressures and fails to address the subsidy issue in a significant manner and further risks erosion of confidence in his government. Another potential political development in the near future reshuffling of the ministerial cabinet. The current problems with distribution and energy shortages, and lack of progress in corruption may trigger a cabinet reshuffle consistent with SBY’s to evaluate his ministers after a year in office.

Overview

may involve the the economy, fuel the fight against inaugural promise

2004

2005

2006

(Actual)

(Estimate)

(Forecast)

GDP Growth (%)

5.1

6.0

7.0

Inflation Rate (%)

6.4

9.0

7.0

9,355

10,300

10,400

Rp/US$ - Year End

Source: Castle Asia – Indonesia Program Report (September 2005)

Indonesia’s recent economic volatility demonstrates that the relative macro economic stability experienced in the past 3 years (dating back to President Megawati’s administration) was actually built on still shaky foundations. In order to get on sustained economic development, Indonesia needs to be able to tackle deep rooted structural issues. One most urgent among these issues focuses on the eradication of corruption as well as improvement of the investment climate. Economic outlook for the rest of the year consists of further monetary tightening to increase confidence in the Rupiah and control inflationary pressures. The latest move by BI to raise the benchmark rate to 10% reflects this trend and some analysts see the benchmark rate would go as high as 11% by year end. The labor market will directly be impacted by expected rising inflation (mainly caused by the weakening of the Rupiah and higher expected fuel prices) and generally projected slow down in the growth of the economy as a result of a higher interest rate situation. Sources: Indonesia Country Program of August & September 2005, Castle Asia; Consensus Economy of September 2005.

©Mercer Human Resource Consulting, LLC.

Overview - 9

INDONESIA 2005 All Industries Survey – Non Executive

Labour Development and Trends

Unemployment (%)

The contribution rates applied to base salary are as follows:

2004

2005

2006

(Actual)

(Estimate)

(Forecast)

9.6

Overview

9.4

9.5

Unemployment is still an unsolved problem. More investments are needed to create new businesses and jobs opportunity. The increase in investment in Q1 has given a good sign but this has been slow. The country still needs more and more investment to reduce the unemployment problem.

Tax and Social Security Developments and Trends

•

0.24% - 1.74% of monthly wage for occupational accidents plan (depending on the nature of business);

•

5.7% of monthly wage for old age pension plan, and employees contribute 2.0% while company contribute 3.7%;

•

0.30% of monthly wage for death benefits plan;

•

3% (single) and 6% (married) for health benefit plan;

Sources: The Jakarta Post; Mercer Global Compensation Planning Report; Worldwide Benefits & Employment Guidelines, 2004-2005 Edition and other print media

Social Security The Social Security system JAMSOSTEK was implemented in 1993 as a replacement for ASTEK that had been in place since 1978. It covers personal accident, life, and health and old age security benefits. JAMSOSTEK is compulsory for companies with over 10 employees or with a monthly payroll of at least IDR 1 million. JAMSOSTEK policies for personal accident, life insurance and old age security benefits are compulsory. However, companies may opt out of JAMSOSTEK’s health benefits, as long as they provide a better programme than that offered by JAMSOSTEK. Currently, employers contribute to the four elements of JAMSOSTEK (Occupational Accident, Death, Health Maintenance and Old Age). The employer’s contribution rate for occupational accident varies depending on the company’s industrial risk classification.

©Mercer Human Resource Consulting, LLC.

Overview - 10

INDONESIA 2005 All Industries Survey – Non Executive

Overview

Salary Movement Trends The most common salary review dates are January (40.19% of the organizations surveyed) and April (33.49% of the organizations surveyed), while some organizations conduct salary review on March (10.05% of the organizations surveyed).

Base Salary Increases

2004 (Actual) Management Professional (Sales) Professional (Non Sales) Staff

th

25 Percentile 8.01 8.93 9.00 9.00

Base Salary Increases (%) Median 75th Percentile 10.00 12.45 10.00 12.38 10.00 12.00 10.00 12.00

Average 10.51 11.01 10.79 10.54

2005 (Estimated) Management Professional (Sales) Professional (Non Sales) Staff

9.00 9.50 9.00 9.00

10.00 10.87 10.00 10.05

12.00 13.00 12.00 12.60

10.89 11.36 10.80 11.03

10.00 10.00 10.00 10.00

10.21 11.00 10.50 11.00

12.38 12.23 12.50 13.00

11.21 11.47 11.38 11.68

2006 (Projected) Management Professional (Sales) Professional (Non Sales) Staff #No company reported wage freeze

©Mercer Human Resource Consulting, LLC.

Overview - 11

INDONESIA 2005 All Industries Survey – Non Executive

Overview

Variable Bonus (excluding companies with no bonus) *Variable Bonus is expressed as a percentage of Annual Base Salary, excluding profit sharing and commission.

Variable Bonus (% of Annual Base Salary) 2004 (Actual) Management Professional (Sales) Professional (Non Sales) Staff

25th Percentile 10.94 10.68 7.70 7.70

Median 15.38 15.38 13.90 13.00

75th Percentile 23.08 26.24 20.00 18.63

Average 19.60 21.10 16.56 15.79

11.54 11.15 8.35 7.69

15.38 15.38 15.00 14.19

23.08 24.04 21.43 19.23

19.22 21.14 16.93 15.73

11.65 9.74 7.70 7.69

15.38 15.38 15.00 13.92

23.08 23.08 20.00 17.78

19.06 19.03 16.17 14.99

2005 (Estimated) Management Professional (Sales) Professional (Non Sales) Staff

2006 (Projected) Management Professional (Sales) Professional (Non Sales) Staff

2004: 3 companies reported no bonus across the board, 1 company reported no bonus for Professional Sales and Staff categories, and 2 companies reported no bonus for Professional Sales category. 2005: 2 companies reported no bonus across the board, 1 company reported no bonus for Professional Sales and Staff categories and 1 company reported no bonus for Professional Sales category. 2006: 2 companies reported no bonus across the board, 1 company reported no bonus for Professional Sales and Staff categories and 1 company reported no bonus for Professional Sales category.

©Mercer Human Resource Consulting, LLC.

Overview - 12

INDONESIA 2005 All Industries Survey – Non Executive

Overview

Staffing Trends Hiring intention* Companies indicated the following changes to their staffing over the next 3 months.

*Org Count

*Percent

Reducing

12

6.32%

No Change

72

37.89%

Recruiting / Adding

106

55.79%

TOTAL

190

100%

Hiring intentions

*Note: Not all companies were able to provide the requested information

Headcount Growth Headcount Growth % headcount growth in last calendar year

Average (%) 2.83

*Note: Not all companies were able to provide the requested information. Data presented above is from 129 companies

©Mercer Human Resource Consulting, LLC.

Overview - 13

INDONESIA 2005 All Industries Survey – Non Executive

Overview

Turnover (Voluntary & Involuntary) The summary of Voluntary and Involuntary Turnover among the surveyed participants is shown below: •

2 companies streamlined their organization across position levels.

Voluntary Staff Turnover (Resignation)

Average (%)

Management

4.51

Professional (Sales)

5.59

Professional (Non Sales) Staff

4.45 4.98

Overall

6.11

Note: Not all companies were able to provide the requested information. Data presented above is from 144 companies

Involuntary Staff Turnover (Retrenchment)

Average (%)

Management

1.73

Professional (Sales)

4.85

Professional (Non Sales)

4.61

Staff

6.06

Overall

6.81

Note: Not all companies were able to provide the requested information. Data presented above is from 81 companies

©Mercer Human Resource Consulting, LLC.

Overview - 14

INDONESIA 2005 All Industries Survey – Non Executive

Overview

Starting Salary Trends - Graduates Annual Base Salaries – Graduates Starting salary information based on company policy. In practice, the rate may be deviated from policy, depending on company discretionary.

Master & PHD Master (BA) Master (Science) PHD Fresh University Graduates Electronic Engineering Mechanical Engineering Chemical Engineering Accountancy Law Computer Science Sciences Business Administration Arts / Sciences Fresh Diploma Holders Engineering Chemical Engineering Chemical Process Technology Biomedical Science Biotechnology Computer Science Accountancy Business Studies Mass Communication Fresh School Leavers Private Secretarial Certificates High School (SMU,SMK,STM) Junior High School (SMP)

2004 IDR

2005 IDR

51,950,000 51,950,000 65,000,000

51,950,000 51,950,000 65,000,000

32,500,000 32,500,000 32,500,000 26,000,000 29,200,000 27,600,000 27,600,000 26,800,000 26,000,000

32,500,000 32,500,000 32,500,000 28,152,150 31,200,000 32,500,000 29,625,000 29,625,000 30,000,000

19,500,000 19,500,000 19,500,000 19,500,000 19,500,000 18,700,000 19,110,000 19,100,000 19,310,000

19,500,000 19,500,000 19,500,000 19,500,000 19,500,000 19,500,000 19,500,000 19,100,000 19,500,000

13,000,000 10,200,000 9,300,000

16,900,000 10,241,000 9,300,000

Note: The figure is based on the actual median salary paid. ©Mercer Human Resource Consulting, LLC.

Overview - 15