Emerald Emerging Markets Case Studies

BCA’s employer branding – the challenge ahead

Ningky Sasanti Munir Eva Hotnaidah Saragih Martinus Sulistio Rusli
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Ningky Sasanti Munir Eva Hotnaidah Saragih Martinus Sulistio Rusli , (2016),"BCA’s employer branding – the challenge
ahead", Emerald Emerging Markets Case Studies, Vol. 6 Iss 3 pp. 1 - 22
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 BCA’s employer branding – the challenge
ahead
Ningky Sasanti Munir, Eva Hotnaidah Saragih and Martinus Sulistio Rusli
Ningky Sasanti Munir is
based at the Department
of Strategy, PPM School
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of Management, Jakarta,
Indonesia.
Eva Hotnaidah Saragih is
based at the Department
of Human Resources,
Research Center and
Case Clearing House,
PPM School of
Management, Jakarta,
Indonesia.
Martinus Sulistio Rusli is
based at the Department
of Marketing, PPM School
of Management, Jakarta,
Indonesia.
Disclaimer: This case is written
solely for educational
purposes and is not intended
to represent successful or
unsuccessful managerial
decision-making. The author/s
may have disguised names;
financial and other
recognizable information to
protect confidentiality.
DOI 10.1108/EEMCS-08-2015-0177
Introduction
On July 17, 2014, PT. Bank Central Asia, Tbk. (BCA) won an award for the Best Bank in
Indonesia in the Euromoney Awards for Excellence (Asia) 2014. The award was received
directly by BCA’s President Director Jahja Setiaatmadja in Hong Kong. Back in 2010, at the
same event, BCA was also recognized as the Best Local Private bank in Indonesia.
Previously in the contact center competition organized by The Global Association for
Contact Center & Customer Engagement Best Practices (contactcenterworld.com) in June
2014 in Singapore, BCA, represented by haloBCATM was awarded as The Best Mega
Contact Center in Asia Pacific region. This is not the first award, and certainly not the only
international award won by BCA. During the same event, in several categories, haloBCATM
and BCA employees also won several awards. In fact, BCA became the world champion in
2012 and 2013. This is the title that will be defended in the upcoming competition in
November 2014. “In the service industry, service is top priority”, said Armand Wahyudi
Hartono, Managing Director, BCA. “Every employee must be prepared to joyfully and
sincerely assist the customers”, Armand added while smiling politely.
As the largest national private bank, BCA is a well-known bank in Indonesia sporting their
bright blue logo (Exhibit 1). BCA Automatic Teller Machines (ATMs) are located at virtually
all strategic corners and BCA’s Electronic Data Capture (EDC) machines are available with
many merchants both in big cities or small towns across Indonesia’s archipelago. However,
for a nation with a population of more than 240 million spread out over 34 provinces, the
presence of BCA is still deemed unevenly distributed. “We are not thinking of expanding
outside of Indonesia, at least there is no plan in the next 10 years”, said Armand
unequivocally. “Eastern Indonesia such as Sulawesi still needs to be developed”, Armand
said further.
Funding sources, which usually becomes an issue for expanding companies, is not a
source of concern for BCA. Lena Setiawati, the Head of Learning and Development
Division, conveyed that BCA is currently facing a problem of an aging population. This fact
is more clearly explained by Houda Muljanti, the Head of Human Strategy and Solution
Division, by conveying that since the economic crisis facing the country in 1998, BCA has
recruited fewer employees. The company resumed recruiting in 2010. BCA’s human
resource (HR) profile in 2013 showed that nearly half of BCA’s permanent employees were
aged 45 years or older, 40 per cent of whom have been working for more than 20 years
(2013 Annual Report). When the time comes for them to retire, the Bank faces the potential
of losing a significant number of employees from three different generations!
Currently, BCA has raised its efforts to recruit new talents. However, recruitment is not easy
for BCA because – like other well-known companies in Indonesia – the Bank only recruits
the best people based on the prospective employees’ hard and soft competencies. “Those
VOL. 6 NO. 3 2016, pp. 1-22, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
 suitable to work at BCA are those with roso (passion)”, said Armand, using a polite
Javanese term. BCA’s aim to project a positive perception toward its employees as “a fun
workplace with family-oriented atmosphere, and commitment about employees’
development” has yet to strongly resonate in Indonesia’s labor market.
In his comfortable office at the 19th floor of BCA tower in Central Jakarta, Armand was in
a discussion with Lena, Houda and Gerardus Alrianto, the Head of Quality and Knowledge
Development Bureau. In the meeting, Armand asserted that BCA wants its new employees
to continue maintaining BCA’s heritage, building the Bank to become an Indonesian
company that they can be proud of. How have these values, which have been a common
belief, a foundation to work passionately, and the glue that bonds the Bank’s employees,
executives and owners, been communicated outside of the BCA and have been used to
attract the future successors of BCA in Indonesia?

BCA: the largest private bank in Indonesia

BCA is a private national bank in Indonesia which was established in 1957. When the
monetary crisis hit Indonesia in 1997, most banks in Indonesia had to face a very difficult
time and BCA was no exception. Unlike state-owned banks, private national banks like BCA
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had to face a harsher crisis: the public’s loss of confidence with the spread of negative
rumors, leading to customers rushing to withdraw their savings from these banks, triggering
severe liquidity crisis. Consequently, like many banks, BCA became a “patient” of the
Indonesian Bank Restructuring Agency (BPPN), a national agency established by the
Indonesian Government to rescue the Indonesian banking industry. The rescue program
caused BPPN to control 92.8 per cent of BCA’s stocks.
In the year 2000, BPPN divested 22.5 per cent of BCA’s stocks through an Initial Public
Offering (IPO) and in 2001, another 10 per cent of BCA’s stocks through Secondary Public
Offering. In 2002, Robert Budi Hartono and Bambang Hartono through Farindo Investments
(Mauritius) Limited, took over 51 per cent of the total BCA’s stocks through a strategic
private placement tender process. Eventually, in 2004 and 2005, the Government of the
Republic of Indonesia through PT Perusahaan Pengelola Aset (PPA) divested its remaining
5.02 per cent shares in BCA.
Crisis and experience have shaped BCA to become a resilient fighter. BCA is now the
largest transactional bank in Indonesia with vast electronic network spread across the
country. At the end of 2013, the overall number of transactions grew significantly through
its 1,062 branch offices and 14,048 ATMs, as well as mobile and internet banking services,
reaching more than 2.9 billion transactions as compared to 2.6 billion transactions in 2012.
Transaction value also continues to grow significantly across the service network, even
higher than the growth of the Indonesian economy, which is 5.6 per cent.
With the support of a strong information technology capability, BCA continues to build its
e-commerce presence, most recently with BCA KlikPayTM (www.klikbca.com/
KlikPay/klikpay.html). In 2013, there were 121.9 thousand customer accounts which are
connected to e-commerce as well as 116 Web-based merchants, as compared to 34.6
thousand total customer accounts and 33 merchants in 2012. BCA has also been
successful in building a cashless habit in Indonesia. Even though several banks have also
done the same thing, eventually FlazzTM BCA card (Exhibit 2) became the most popular
solution, thanks to its ease of use, vast merchant network and intensive promotion viewed
to benefit the cardholders. FlazzTM BCA card is the first and fastest multifunctional prepaid
card in Indonesia that also includes state-of-the-art technology.
BCA has five subsidiaries, namely, PT. BCA Finance, BCA Finance Limited, PT. Bank BCA
Syariah, PT. BCA Sekuritas and PT. Asuransi Umum BCA. Specifically, for the Bank, it
employed 21.013 permanent workforces. BCA is managing more than 12 million customer
accounts, processing hundreds of millions of financial transactions and fulfilling the needs

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 of individual and corporate customers through various products and services. BCA’s
financial performance is available in Exhibit 3.
BCA believes that continuous development of human resources is the key to success in
building relationship with customers. Hence, BCA designed The BCA Way which can be
understood and implemented by the entire line of BCA’s human resources. The vision and
mission of BCA is available in Exhibit 4.

Recruiting future leaders

Since the beginning, business groups of Chinese ethnicity dominate the economy in
Indonesia. Thus, in the past, non-Chinese university graduates do not consider business
enterprises – as banking – as a place to work and build a career. However, currently, the
workforce demographic has changed dramatically. Chinese ethnic’s talents no longer
dominate major positions. Top management positions are now occupied by employees
with excellent track records, regardless of their ethnic and religious backgrounds.
A more matter of concern for Lena is BCA’s employee demography, indicating that a
majority of employees are over 45 years of age. The 2013 Annual Report showed that the
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number of employees aged 45 years and over was 10,481, representing approximately
49.8 per cent of BCA’s total 21,013 employees (Exhibit 5). In the past four years, BCA has
recruited a relatively large number of young talent, averaging 1,500 people per year. In line
with BCA’s philosophy to promote from within, the total number of fresh graduates recruited
is, by far, greater than that of experienced talent recruited from the industry (pro-hire) which
mostly recruited to fill in managerial or specific positions.
Employee regeneration process starts with the recruitment of the best graduate from
leading domestic and international universities. Before employee placement, new recruits
receive intensive and thorough training through BCA Development Program (BDP).
The BDP adopts a highly selective admission policy where only a limited number of
candidates are accepted. It is difficult to obtain the required input, but because of its
selectiveness, the failure rate is also low (1-3 per 30 people). Strict selection requirements
are kept with the rationale that “rather than having the difficulty to expel at a later time, it is
better to have difficulty in entering it”, said Lena. The required characters a BDP participant
must possess refer to the four values of BCA. There are various selection instruments used
such as psychometrics test, simulation, group discussion and interview. The BDP
graduation rate averages at 90-100 per cent. Employees passing BDP are entitled to
supervisor-level positions. Even then, participation in the BDP does not guarantee that an
employee’s career will be flawless. Performance and attitude remain the key in determining
success.
The recruitment process at BCA is mostly performed centrally; however, in the Eastern part
of Indonesia such as Makassar, Manado, Kendari, Pare-pare, Ambon and Papua, there are
HR business partners that actively visit campuses in the region. These HR business
partners have been previously provided with knowledge and comprehension regarding
BCA and material that must be delivered during the visits. Campus visits are included in
their performance indicator. The purpose of the visit is not only to obtain workforce from the
campus being visited but also to maintain relationships with the campus.
In seeking new recruits, BCA actively performs socialization programs in state and private
universities. The purpose is to raise awareness of opportunities offered by BCA as one of
the best employers in Indonesia. In addition to collaborating with colleges, BCA also uses
job fairs, Web recruitment, internships and employee referrals, job opportunity
advertisements posted at BCA branch offices located near universities and in the leading
mass media. One of the job opportunity advertisements at BCA can be seen in Exhibit 6.
BCA also uses recruitment consultant services, especially to find candidates with specific
qualifications. The communication media used by BCA are prints (poster, flyer, booklet,

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

 banners) and electronic media (jobstreet website, karir.bca.co.id, Twitter and video about
BCA and its values).
Of the many sources of recruitment, campus hiring is the most effective mechanism
conducted through presentations and direct selections at campuses. BCA conducts
around 20-30 campus hiring per year. The selection process is performed by adhering to
a rigorous standard. From every campus hiring process, an average of 5 per cent of the
total eligible applicants is recruited. Specifically, for BDP, BCA searches from the best
universities, given that this program requires employees with strong thinking abilities. For
specific positions such as front-liners, BCA recruits from universities whose alumni are
proven to be loyal to the Bank and showed persistence. For other positions, BCA does not
put any restrictions. From any campus, both domestically and abroad, applicants who fulfill
the requirements will be processed/accepted.
One of BCA’s strategies to recruit quality candidates is by involving its alumni, especially
those with outstanding performance in BCA. During campus visits, BCA typically takes its
employees who are the alumni of the university to interact with the students. After the
interaction occurs, BCA explains the company’s professionalism in its HR development
process.
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To support expansion outside of Java and Sumatera Island, BCA initially used direct
recruitments from local colleges. However, this process could only recruit a few numbers
of qualified candidates, given that the majority of qualified talents choose to further their
education at universities in Java, which generally offer better quality, provide more financial
assistance and more job offerings from various leading national and international
organizations. Moreover, many graduates from universities in Java coming from outside of
Java are reluctant to return to their homes.
One of BCA’s strategies to recruit talents from outside of Java and Sumatera is through
provision of scholarships to high school graduates with excellent academic records but
facing financial difficulties to attend the Bank’s Accountant Education Non-Degree Program
(PPA). Initially, this program was part of BCA’s corporate social responsibility (CSR)
activities. Today, it is not only a part of CSR but also an important element to prepare
candidates to work for BCA. Upon graduation from PPA, scholarship recipients are not
required to work for BCA; however, the majority choose to join as BCA’s employees.
Within the banking circles, BCA’s main competitors in recruiting talent for staff positions
and management trainee level are Bank Indonesia, Financial Services Authority (OJK), PT
Bank Mandiri, Tbk. and PT Bank BNI, Tbk., as well as foreign banks such as Citibank,
HSBC and others. Whereas outside the banking sector, companies of choice for
Indonesian fresh graduates are leading state-owned enterprises such as PT.
Telekomunikasi Indonesia, Tbk., PT. Pertamina (Persero), followed by national private
companies in mining and oil industries, as well as foreign companies such as PT. Astra
International, Tbk., Unilever Indonesia and others.

BCA learning center: fostering future leaders

To ensure the quality of employee’s competency, BCA Learning Center consistently
develops various training programs to increase, develop and update insight, knowledge
and expertise for all levels within the Bank. Training programs are designed to support
BCA’s strategies and the achievement of its business targets. BCA Learning Center also
actively develops programs and campaigns to promote and ensure internalization of “The
BCA WAY”.
As a reflection of BCA’s commitment to people development and growth, every employee
needs to attend at least one learning day per year. In 2013, BCA allocated not less than
Rp. 300bn for learning and development. Training and development activities are
conducted using various methods, from the conventional method to the latest, face-to-face

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 and on-line methods, conducted in Indonesia and abroad using BCA’s internal capability
and external institutions’ experts in their respective fields.
As the driver behind the Bank’s knowledge management initiatives, BCA Learning Center
has initiated Community of Practice (CoP), an independent learning and knowledge-
sharing activities. Through CoP, employees are encouraged to share business topics and
experience, thus facilitating the dissemination of knowledge, and at the same time allowing
social interactions among CoP members. BCA also encourages its employees to acquire
accurate and current product knowledge through various refreshing training sessions,
ensuring that they are able to provide the best service for customers.
As mentioned previously, to develop its talent, BCA has two specific programs, namely,
BDP and Apprentice Account Officer (AAO). BDP is intended for prospective staff that will
handle larger credit coverage and more complex customers. They are mostly assigned at
different branches to accelerate their development, because these BDP alumni are
expected to be leaders in their respective work units. Whereas AAO is intended for staff that
handles smaller coverage credit.
BDP and AAO evolved from the latest management trainee (MT) program at BCA. Until
2008, the MT program was still a generalist program. All participants received the same
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training; afterward, they were placed in one of the unit. Since 2009, the program has
changed its name to become BDP, a more specialist-oriented program: participants learn
about basic banking knowledge for the first four months, before being divided into separate
groups with different majors. Participants who pass the program will be posted in work units
based on their respective majors. Both BDP and AAO class have a maximum capacity of
25 persons.
Successful candidates who become BDP participants basically possess good potential
based on the BCA standard. However, because of their relatively tender age, failures are
often caused by soft competence issues. Hence, in this one-year program, candidates are
trained to develop their leadership. Every class has a “guardian” who has some knowledge
about the participants. In addition, there is also a counselor who observes participants with
evaluation issues, discusses the cause of it and aids in finding the solution. After an in-class
lesson, participants apprentice in the workplace coached by mentors. Upon graduation
from BDP, candidates are then subject to two-year contracts.
BCA has mentoring activities for mentees to obtain comprehensive guidance from officers
during project implementation. Hence, mentors must be technically proficient, and
non-technical aspects are also considered based on performance record. During the study
and contract period, BDP participants are given several explanations about values for the
formation of mature attitudes. Once a month, BDP participants meet with their mentors to
discuss BCA values and its implementation. For example, a discussion about one of BCA’s
values: what is the explanation how is it practiced, testimonial by a long-time employee,
discussion with one of the leaders, storytelling and others. BCA values can be seen in
Exhibit 7.
In addition to mentors, leaders (regional office, branch, work unit) also play important and
active roles in ensuring the implementations of company policies and nurturing BCA value
and culture. The BCA Learning Center provides feedback periodically regarding the
involvement of leaders at the regional, branch and work unit levels in the development of
the Bank’s learning culture.

Career development
In the case of career development, BCA provides equal opportunity for employees to
develop their potential and career according to their competency and capability, as well as
opportunities at the company. For potential employees who will be promoted, BCA
provides Career Development Program that are mandatory for those employees. The
program is also a medium for developing and sharing knowledge creation and innovation

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5

 strategy, where program participants are required to create a final project in the form of
recommendations for business development, improvement of work system, improvement of
procedure or solution to issues faced by a work unit. The best papers are posted on
MyBCA website and can be accessed by all BCA employees.
Career Development Program is consistently offered to employees as an effort to prepare
them to achieve a career at a higher level and to meet staffing needs at strategic positions.
BCA uses a panel evaluation system to identify key talents, which are then rotated through
the Career Development Program. The program prepares employees to be able to accept
greater responsibility and ready to fill strategic positions.
BCA provides specific training for newly promoted managers so that they have the required
knowledge to manage team members effectively. BCA also performs employee
development in a talent pool through a series of training activities and mentoring program,
including awarding scholarships for a master’s degree in domestic universities or a
comprehensive training in the form of executive education at leading universities in
Singapore, Europe and the USA.

Performance and compensation management

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BCA offers competitive remuneration package comparable to those offered by state-owned

banks and several foreign banks operating in Indonesia. BCA implements an attractive
remuneration system to maintain and encourage good performance and to develop a
sense of ownership and pride among employees. Based on survey results conducted by
Gallup, competitive remuneration is one of the most significant factors affecting BCA’s
workforce satisfaction and engagement.
Employee targets and performance are determined and assessed every year. Since 2012,
5/6 of the bonus are paid in cash, while the remaining 1/6 of the annual bonus is paid as
BCA shares obtained through stock purchase at Indonesia Stock Exchange. This initiative
was retained in 2013. Bonus shares must be kept for three years, and afterward employees
have the right to exercise their shares.
BCA also introduces several programs to ensure employees’ work–life balance and to
provide employees with a comfortable working environment that encourages productivity
increase. BCA provides a positive working environment based on the standard of the
Ministry of Manpower. One of the activities offered to promote employees work–life balance
is joint sport activities as part of BCA’s “Healthy Along with BCA” initiative. BCA is the first
leading company in Indonesia to collaborate with UNICEF to provide support for woman
employees after maternity leave. During Eid Celebration, BCA provides day-care facilities
at several regional offices and the head office to help reducing the stress level of workers
with children.
BCA believes that training and development must also be accompanied by a strong people
engagement culture. This is important to ensure the best service for customers and to
support effective interaction between team members. In 2013, BCA implemented a number
of Team Engagement initiatives, ensuring that managers do not merely function as
business managers but also as managers for their employees. Team Engagement
Activities, along with coaching and learning culture activities at BCA, have become part of
performance indicator for managerial positions. These programs have one main goal,
which is to maximize employee satisfaction and ultimately increase employee retention.
Team Engagement has become an important element of BCA work culture aim to optimize
productivity, as well as develop and stimulate daily customer focus activities, which
ultimately will improve BCA customer relations.

“BCA – always by your side”

Starting 2012, in the moment of celebrating 55th years anniversary, BCA launched a
corporate campaign that focused at “BCA Always by Your Side” as a value and promise to

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 BCA’s customer. This value was claimed as a result that BCA is always by customer side.
BCA is not only just a bank, but as a best friend that walks side by side with the customer,
neither in front nor behind the customer, but always by the customer’s side as a best friend
that will always accompany and support the customer.
“To maintain and to increase our brand value, BCA tries to always fulfill the customer’s
needs by launching Corporate Campaign focusing on providing solution for BCA’s
customers”, explained Esther Meliana, the Head of Marketing Communication. BCA
launched a series of Corporate Campaign, starting with Solusi Individu (Individual Solution)
in 2012 to help individual customers find solutions for their individual banking needs like
savings, transaction and funding. In 2013, BCA launched another corporate campaign
focusing on business customers with Solusi Bisnis (Business Solution) that provides various
solutions from BCA products to help business customers grow their businesses.
To fulfill the brand promise “Always by Your Side”, BCA also continued to innovate their
products, providing the customers with more advanced technology and services that fit
with the needs of the emerging market. In reality, everywhere and anywhere customers will
feel BCA’s presence. By their mobile phone through BCA mobile, in every street corner with
ATM BCA, in their business need, BCA is providing solutions at the hand of the customer,
helping them grow with BCA.
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The internalization of “Always by Your Side” value is also felt by the employees. In
socializing that branding, BCA employees feel that they are part of one big family. This
socialization is highly supported by the Board of Directors; hence, the result is impressive.
To review the result of the socialization initiative, BCA has conducted an engagement
survey regarding employee happiness. The survey proofed that BCA employees have a
high level of happiness.

BCA innovation
To fulfill its “Always by Your Side” brand promise, BCA also continues to innovate new
products, providing customers with more advanced technology and services that fit the
needs of the emerging market. In reality, everywhere and anywhere customers will feel
BCA’s presence. By their mobile phone through BCA mobile, in every street corner with
ATM BCA, in their business need, BCA is providing solutions at the hand of the customer,
helping them grow with BCA.
Currently, BCA products are divided into nine categories, namely, savings, credit card,
credit facilities, transactional banking service, cash management, bank assurance, bank
guarantee, export–import facilities and foreign exchange facilities. Many of BCA products
are well known by Indonesian people. The developments of these products were not done
within a short period. Since its establishment, the BCA management focuses on developing
the best product. At that time, BCA believes that good products will increase awareness
and give a big name to BCA. In 1997, BCA tried to develop debit BCA and mobile banking.
Both of these products were developed aligning with positive expectations of the
increasing customer awareness of BCA’s name.
After going through several periods, questions regarding brand image expectations started
to come into consideration. This consideration brings BCA priority to pay more attention
toward corporate campaign in 2012. BCA brought a new mission to grow together with
customers in 2012. BCA believes that product development must also be accompanied
with attention to the expected image of BCA in the eyes of customers.
The new mission is agreed upon by the entire line of BCA. Extraction of information and
inspiration are conducted internally at BCA starting with the board of directors, head of
division and also those lines closer to customers. A common thread from extraction of
information reveals that the real strength of BCA lies with its customers. According to
customers, BCA always accompanies them. Customers feel a close relationship with BCA
because they grow together from small position to large position.

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7

 BCA feels that its corporate relationship marketing process in 2012 can be performed
without abandoning BCA’s product development. As one of the best banks in Indonesia,
BCA has an advantage as a leading transactional bank. If a person wants to conduct a
transaction with another person, they will surely provide their BCA bank account, rarely will
they provide another bank account other than BCA. As a leading transactional banking,
BCA believes that strong relationship is a top priority.
BCA does not have special segmentation. As a strong transactional banking, BCA is
chasing the mass market. BCA tries to explore untapped market using the latest
innovations. As one form of market development activities, BCA collaborates with
KidzaniaTM, a play area for children in the form of a world. This collaboration aimed to
educate children by giving them ATM card that functions for saving and withdrawing
money.
Other form of BCA innovation is Electronic Banking Center initiated solely by Armand as
Director of BCA. Customers no longer need to go to a BCA branch to open an account.
Customers can perform the task themselves with assistance from a banking tutorial video.
This innovation facilitates consumers until the creation of their ATM card. Customers can
scan their own Kartu Tanda Pengenal (KTP; residence identification card) and then obtain
the ATM card through cash deposit machine (CDM). This innovation can be found at
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leading malls in Jakarta and Surabaya, followed by other cities.

BCA is the first bank in Southeast Asia to have video banking. Video banking is very user
friendly. Customers only need to scan their KTP (ID card), go face-to-face with video
banking, get their picture taken and then take the card that is already made. BCA won this
innovation at an Asia Pacific banking event on November 10-14, 2013.

Education and economic growth in Indonesia

Publication from Badan Pusat Statistik (BPS-Statistics Indonesia, www.bps.go.id) shows
that in the year 2000, there were 206.264.595 people in Indonesia increasing to
248.818.100 in 2014. In 2020, the number of people in Indonesia is predicted to surpass
255 million people. From 34 provinces in Indonesia, only six provinces with a population of
more than 10 million, namely, North Sumatera, Banten, DKI Jakarta, West Java, Central
Java and East Java. The number of people is not spread equally among the 13,000 islands
in Indonesia. Almost 58 per cent of Indonesians live on one island, which is Java, followed
by Sumatera (21 per cent), Kalimantan (7 per cent) and Sulawesi (6 per cent).
In the past 15 years (1998-2013), Indonesia’s economic growth experienced a significant
progress. In the later part of the 30-year rule of the New Order in 1998, Indonesia’s
economic growth was minus 13.1 per cent. In 2002, economic growth rose to 3.66 per cent,
up to 5.1 per cent in 2004, continued growing to 6.4 per cent in 2008 and slightly lower at
6.02 per cent in 2013, mainly because of the rise in subsidized gasoline price in May 2013.
Report from Business Monitor International (www.businessmonitor.com) predicted that
Indonesia’s economic growth average will be 6.2 to 6.5 per cent until the year 2020.
In 2012, Indonesia has a nominal gross domestic product (GDP) of US$928,274bn and a
nominal per capita GDP of US$3,797. This places Indonesia as a nation with a GDP that
ranked 16th in the world and a G-20 member with the largest GDP in the world. Indonesia’s
economic growth is supported by all sectors. The smallest growth was experienced by the
mining and excavation sector, with recorded growth of 0.48 per cent. Sectors that
experience greater growth than GDP are transportation sector and communication sector
with a growth of 9.63 per cent; trade sector and hotel and restaurant sectors with a growth
of 7.80 per cent; construction sector and manufacturing sector with a growth of 7.79 per
cent; real estate sector and corporate service sector with a growth of 7.66 per cent; and
electric, gas and clean water sector with a growth of 7.25 per cent.
Economic growth in Indonesia is still dominated by provinces in Java and Sumatera
Islands. Provincial group in Java provides the largest contribution to GDP at 57.79 per cent,

PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 followed by Sumatera at 23.99 per cent, Kalimantan at 8.89 per cent, Sulawesi at 4.7
per cent, Bali and Nusa Tenggara at 2.49 per cent. The smallest contribution comes from
Maluku and Papua at 2.14 per cent. Ten provinces with the highest GDP in Indonesia
according to BPS-Statistics Indonesia in 2012 consecutively from West to East are, North
Sumatra, Riau, South Sumatra, Banten, DKI Jakarta, West Java, Central Java, East Java,
East Kalimantan and South Sulawesi.
Result of analysis by Boston Consulting Group (www.bcg.com) in March 2013 shows that
Indonesia is a nation with the highest growth of middle class in the world. The population
of upper middle class with the assumption of expenditure in excess of US$304 per month
soared from 23.2 million people to 49.3 million people. Overall the population of middle
class to elite class in Indonesia reached 141 million people, much higher than current
position at 74 million people.
Indonesia’s economy is growing rapidly, and the growth of the middle-to-upper class will
give rise to a wave of growing consumer spending. Analysis by the Boston Consulting
Group also states that the growth of middle-class consumers is Indonesia’s big attraction
because their consumption has shifted from basic needs to comfort and convenience
products. Half of the population of the middle-to-upper class consumers is still
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concentrated in Java Island. In the coming years, population concentration of middle-class

consumer on other islands is expected to grow more rapidly in the period of 2012-2020.
Companies that want to reach the middle-to-upper class consumers must double their
existence in that area.
The encouraging growth of Indonesia’s economy is not supported with the quality of its
human resources. For a nation with the third largest population after China, India and the
USA, Indonesia has approximately 90 state universities and more than 3,000 private
universities. However, the quality of those universities is uneven, in fact it can be like night
and day. There are universities which simply act as “scholar factory” that accept as many
students as possible, but the quality of the education is worrying. State universities are not
always of better quality than private universities. Data from Dikti (Directorate General of
Higher Education) in 2010 concerning quantity distribution of universities in Indonesia show
that from 3,098 universities in Indonesia, 1,504 or almost 50 per cent are located in Java
Island. The number that is dominant is DKI Jakarta, West Java and East Java Province.
To ensure the quality of higher education in Indonesia, in 1996 to 2007, National
Accreditation Agency (BAN-PT) performs accreditation to 45.6 per cent from the 17,844
registered study programs. From the perspective of quality imbalance, it is also
proportional with what happens to quantity distribution, which is mentioned previously.
Accreditation results show that the average accreditation program in Java is higher than
outside of Java. In fact, many study programs at universities in Java have international
accreditation, world-class quality and are partners with several leading universities in the
world.
Higher educations in Indonesia, especially those of quality, are not cheap. This is one of the
reasons people choose universities with lower cost, even though they know it is lacking in
quality. Among all levels of education, university gross enrollment rate is lower than other
level of education. In 2004, university gross enrollment rate is still below 14 per cent.
Meaning, 86 per cent of children aged 19-23 years have not had the chance to study at a
university. University gross enrollment rate in Java is also higher than outside of Java, which
is 18 per cent as compared to an average of 7.8 per cent in Sumatera, Kalimantan, and
Sulawesi. Until 2012, university gross enrollment rate increased twofold to 28 per cent from
gross enrollment rate in 2004. The target, by 2015 gross enrollment rate will reach 35 per
cent, and when Indonesia reached its 100th anniversary, university gross enrollment rate
should reach 60 per cent. To support this strategic goal, the Indonesian Government
issued various financing facilities for student and for university.

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9

 A survey launched by Universum (universumglobal.com) at the end of last June and
entitled Indonesia Top 100 IDEAL Employers Universum involving 12,435 students in
Indonesia as respondents. Universum divides its survey into four industrial sectors, namely,
business, humanities, engineering and IT. Interestingly, fresh graduates in Indonesia still
consider working at government institutions as their dream. This is directly proportional with
the interest of many fresh graduates who want to join the Ministry of Finance. Ministry of
Finance is ranked third in the Top 100 survey by Universum, followed by Ministry of Foreign
Affairs and Ministry of Tourism and Creative Economy that ranked eighth and tenth,
respectively. The banking sector is also considered as an ideal sector to start a career for
fresh graduates. Bank Mandiri is the most desirable banking company followed by BCA
and BNI. Fresh graduates with technical background chose Pertamina as the most
desirable company in Engineering sector followed by Chevron Indonesia and
Schlumberger. Graduates with IT background chose Google and Microsoft as their dream
company. Exhibit 8 shows a list of 30 companies that are most attractive for fresh graduates
in Indonesia according to the Universum survey in June 2014. In addition to the above
survey, entrepreneurial movement among young people, which is a trend in the past five
years, is also quite influential for fresh graduates from a business family who tend to choose
to become entrepreneurs rather than working at a company.
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Landscape of Indonesia’s banking industry

As many as 248.8 million Indonesian people are served by 120 non-Syariah commercial
banks. Non-Syariah commercial banks in Indonesia consists of six types, namely, state-
owned banks, foreign exchange commercial banks, non-foreign exchange commercial
banks, regional development banks, joint venture banks and foreign-owned banks. The
number of banks according to the type and amount of assets is shown in Exhibit 9.
Based on banking statistical data published by Bank Indonesia in February 2014, ten of the
top banks control 63.5 per cent market share of the national banking asset. Total assets of
the ten largest banks is Rp. 3.13 trillion. The latest data from Bank Indonesia have shown
BCA that was in the third place to almost overtake PT Bank Rakyat Indonesia, which ranked
second, based on the largest assets.
Top position is still held by PT Bank Mandiri Tbk which controls 13.76 per cent market share
of the total banking asset in Indonesia. This state-owned bank has an asset of Rp. 371.67
trillion. Up to December 2013, Bank Mandiri employed 24,282 employees with 1,180
branch offices and 7 overseas offices. Bank Rakyat Indonesia (BRI; the name of one
major state bank in Indonesia) holds the second position with an asset of
Rp. 306.7 trillion. BRI is known to focus on developing small business loan. The government
has 59.5 per cent of shares and 40.5 per cent public shares. BCA which holds the third
position has an asset of Rp. 305.16 trillion. The fourth position is held by PT BNI Tbk with
a total asset of Rp. 217.074 trillion. This bank is owned by the government with 59.5 per
cent and the public with 40.5 per cent. This bank is the oldest commercial bank which was
established on July 5, 1946. BNI has 1,242 outlets spread across Indonesia and 5 overseas
branch offices. The fifth place is held by CIMB Niaga Tbk with Rp. 126.969 trillion (4.7 per
cent). Bank Niaga is owned by CIMB Group Bhd with 56.1 per cent, Santubong Ventures
Sdn Bhd with 16.65 per cent, Greatville Pte Ltd. with 2.58 per cent and others with 23.59
per cent.

The challenge ahead

In collaboration with Gallup Polling Group, BCA has been collecting data on Team
Engagement condition in BCA. Starting off in 2011, the response level was already high,
reaching 98 per cent. The Bank, then, continues to invest in Team Engagement through
various programs. In 2013, the Team Engagement ACTION ACTION ACTION program is
initiated. In this program, the work unit leader and team member are challenged to create
a more enjoyable environment to establish closer relationship between team members and

PAGE 10 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 eventually achieve better performance. This activity involves assessing the action plans for
the implementation of team engagement from all branches and division in all of Indonesia,
and selecting the best ten action plans. These ten best action plans are then presented to
the Board of Directors. This would be an incentive for teams to consistently implement their
action plan and improve workplace atmosphere at the Bank’s entire branch office network.
From an interview with five young employees of BCA, three common answers were found
to be the reason why they choose to work and stay to work at BCA: comfortable working
environment, mutual respect and mutual support; the balance between work and family life;
and equal opportunities and full support of the company in terms of career and
development. However, the reality is not known to outsiders. An example of Nielsen 2013
survey results related to the respondent’s perceptions regarding BCA as a work place is as
follows:
 Don’t feel like working at BCA [. . .] it’s tiring.
 Look at the advertisement; it’s all about products. Try going to the bank, always queuing
[. . .] it seems like their mind are only concern about work, nothing else.
The perception above is actually the opposite of the actual BCA condition. There is an effort
to communicate, but it does not resonate strongly. Because of lack of recruitment activities
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by BCA in the past, what others say about BCA is not important. Humility is viewed as an
important thing. No need for hype, let the public know by themselves. The important thing
is internally BCA is an amazingly fun place to work, employees are satisfied and vibrant.
Externally, BCA is quite comfortable with its image as a professional modern bank with
world-class service. But now, that is not sufficient to make BCA as the main choice for
passionate high-quality workforces.
Only in the past two years BCA has thought of employer branding. The message has not
Keywords: widely reached the workforce market in Indonesia. One thing that has changed in BCA is
Recruitment, that it is now more open and communicative regarding its advantages. In the past, it never
Human resource communicated the awards it received, including an award in 2013 as one of the most
management, attractive company and empowering employee in banking industry category. Another
Strategy, equally intriguing question, how should BCA obtain a large number of qualified talent pools
Banks/banking through an effective employer branding strategy?

Exhibit 1. BCA logo

Figure E1

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 11

 Exhibit 2. BCA Flazz Card

Figure E2

Exhibit 3. Financial highlights 2012/2013

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Table EI
(Rp. billion) 2013 2012

Balance sheet
Total asset 496.305 442.994
Total productive asset 435.309 389.039
Credit loans – gross 312.290 256.778
Credit loans – net 306.679 252.761
Securities (including securities purchased under resale agreements) 90.211 82.388
Placement in Bank Indonesia and other Banks 12.254 28.802
Total liability 432.338 391.096
Third party funds 409.486 370.274
Current accounts 103.157 96.456
Savings 219.738 200.802
Deposits 86.591 73.016
Loans received 3.802 2.458
Debt Securities issued 3.133 2.522
Total equity 63.967 51.898
Total liability and equity 496.305 442.994
Comprehensive profit loss
Operating income 33.726 27.614
Net interest income 26.425 21.238
Operating income other than interest 7.301 6.376
Allowance for impairment losses of financial assets (2.016) (449)
Operating expenses (14.631) (12.859)
Net operating profits 17.079 14.256
Non-operating income 737 430
Profit before income tax 17.816 14.686
Net profit 14.256 11.718
Other comprehensive income/(expenses) (1.252) 180
Total comprehensive profit 13.004 11.898
Net profit attributable to
Owner of parent entity 14.254 11.721
Non-controlling interests 2 (3)
Comprehensive profit attributable to
Owner of parent entity 13.002 11.901
Non-controlling interest 2 (3)
Net profit per share (in full Rupiah) 579 480

PAGE 12 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 Exhibit 4. Vision and mission
Vision
 To be the bank of choice and a major pillar of the Indonesian economy
Mission
 To build centers of excellence in payment settlements and financial solutions for
businesses and individuals.
 To understand diverse customer needs and provide the right financial services to
optimize customer satisfaction.
 To enhance our corporate franchise and stakeholders value.

Exhibit 5. Number of employee

Table EII
Year
Years of service 2013 2012

Number of employees based on years of service

ⱕ1 year
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1.525 955
⬎1-5 years 1.890 1.512
⬎5-10 years 909 735
⬎10-15 years 1.913 2.140
⬎15-20 years 6.445 6.902
⬎20 years 8.331 8.041
Total 21.013 20.285
Number of employees based on age
ⱕ 25 years old 1.414 972
⬎25-30 years old 2.150 1.567
⬎30-35 years old 1.183 1.561
⬎35-40 years old 3.726 4.347
⬎40-45 years old 2.023 1.669
⬎45-50 years old 4.674 4.249
⬎50 years old 5.807 5.920
Total 21.013 20.285

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 13

 Exhibit 6. Job opportunity advertisement

Figure E3
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Exhibit 7. BCA values

 Customer focus;
 Integrity;
 Teamwork; and
 Continuous pursuit of excellence

PAGE 14 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 Exhibit 8. Companies that most attract fresh graduates in Indonesia

Table EIII
Sr. No Name of companies

1 Bank Indonesia (The Central Bank of Republic of Indonesia)

2 PT. Pertamina (Persero)
3 Kementerian Keuangan (Minisntry of Finance)
4 PT. Unilever Indonesia Tbk
5 Google
6 PT. Astra International Tbk
7 PT. Garuda Indonesia Tbk
8 Kementerian Luar Negeri (Ministry of Foreign Affairs)
9 Chevron Indonesia
10 Kementerian Pariwisata dan Ekonomi Kreatif (Ministry of Tourism and Creative Economy)
11 PT. Bank Mandiri Tbk
12 Nestlé
13 PricewaterhouseCoopers
14 Trans Corp
15 Microsoft
16 PT. Bank Central Asia Tbk (BCA)
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17 Indonesia Stock Exchange

18 Kompas Gramedia Group
19 PT. Bank Negara Indonesia Tbk (BNI)
20 Samsung
21 Ernst & Young
22 Deloitte
23 Indofood Group
24 PT. Telekomunikasi Indonesia Tbk (Telkom)
25 L’Oréal Group
Source: universumglobal.com

Exhibit 9. The numbers and the types of Banks in Indonesia

Table EIV
Total assets
Asset more than Asset more than Asset more than Asset below
Type of bank 50 T 10 T to 50 T 1 T to 10 T 1T

State-owned banks 4
Foreign exchange commercial banks 12 7 16 1
Non-foreign exchange commercial banks 1 2 19 7
Regional development banks 1 13 12
Joint venture banks 1 7 7
Foreign-owned banks 4 4 2
Total 23 33 56 8
Source: Bank Indonesia (bi.go.id)

Corresponding author
Eva Hotnaidah Saragih can be contacted at: evasaragih67@gmail.com

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 15