Will the UMP 2025 Increase? Explore 6 Things Companies Should Prepare Here! 

The certainty regarding whether the provincial minimum wage (Upah Minimum Provinsi/UMP) for 2025 will increase is soon to be revealed. The government will announce this news on November 21, 2024. 

Based on trends from previous years, the UMP for 2025 is most likely to rise. In the last three years, the UMP in DKI Jakarta has experienced consistent increases: a 3.44% hike in 2022, a 5.6% increase in 2023, and a further 3.6% rise in 2024. 

This increase affects not only workers but also companies across various sectors, particularly in their operational and business strategies. 

Therefore, companies need to anticipate the impact of UMP 2025 on their operations. To summarize, here are 6 essential preparations companies should make: 

1. Budget Planning 

The first step is to plan the budget for employee salaries. This involves assessing the potential impact of the UMP 2025 increase. 

It’s important to account for salary increase early on, allowing companies to allocate funds appropriately based on positions and employee performance. 

Additionally, companies might consider adjusting overall compensation packages, including non-cash benefits that are less impacted by the UMP increase. This can help maintain competitiveness without significantly increasing expenses. 

2. Optimizing Organizational Structure 

To achieve effective and efficient organizational structure, companies could try reviewing job descriptions for specific positions. 

The Organization Development (OD) team plays a crucial role in ensuring there is no overlap in tasks and responsibilities among positions or departments. 

By evaluating job descriptions, companies can also reduce the risk of excess spending. The OD team can conduct talent mapping to identify critical roles that support business growth. This would make it easier to adjust salary budgets for productive positions. 

3. Collaboration Across Teams 

A good collaboration within the organizational structure is key to effectively managing the UMP increase. 

For instance, the Human Resources (HR) team can oversee payroll and recruitment processes in line with the company’s needs, while coordinating with the OD team to ensure structural efficiency. 

Meanwhile, the Finance team must ensure that any wage increases, and budget adjustments align with the company’s stability and capability.

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4. Recruitment and Resource Efficiency 

With the rise in UMP, companies need to be more strategic in their recruitment processes.  

Filling positions strategically is key to effective budget management. This approach helps companies stay competitive in the job market while still addressing their essential needs. By prioritizing key roles, organizations can ensure they are investing wisely in their workforce. 

5. Payroll Services Role in Salary Management 

The payroll team is vital for accurate calculations of salaries, taxes, and benefits. 

When a company faces a rise in employees or regulatory changes like the UMP 2025 increase, the payroll team may encounter challenges in maintaining accuracy and efficiency. 

In such cases, utilizing third-party payroll services or recruitment agencies like RecruitFirst can be an excellent solution. They can help reduce administrative burdens and minimize risks in the payroll process.  

6. Optimizing Recruitment through Outsourcing 

Limited resources when managing the recruitment process can slow down filling critical positions. 

Using outsourcing for recruitment can be a smart move. This allows your company to focus on core business activities while a third-party team handles the entire recruitment process. 

In facing the challenges of the UMP rise, RecruitFirst Indonesia is ready to partner with companies to manage the administrative and operational burdens related to the workforce. 

From complex payroll management to outsourcing and administrative processes—RecruitFirst can provide solutions that enable your company to concentrate on growth and core activities. 

If you want to minimize risks and maximize business efficiency considering the UMP 2025 increase, consider collaborating with RecruitFirst Indonesia. We are here to help you maintain business stability and manage resources amid changing regulations. Contact us today!

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