Indonesia’s HR Double Life: How Talent Heads Profit from Their Own Companies
In Indonesia, some top HR leaders manage recruitment by day and run agencies by night. Where’s the line between leadership and self-dealing?
In Indonesia, a wonderfully awkward contradiction is hiding in broad daylight: full-time Heads of Talent Acquisition and CHROs are sometimes also running their own recruitment agencies. Not after hours. Not in some quietly distant sector. But in the very industry they are employed to regulate, influence, and supposedly professionalize.
Yes, your friendly neighbourhood CHRO might also be your company’s preferred vendor, just under a different logo. On Monday morning they’re in the exec meeting reviewing headcount budgets, and by Tuesday, they’re submitting candidates via their boutique agency that “just happens” to win every brief. It’s a loop of self-justifying invoices.
This is a system that allows conflict of interest to exist openly; not a clerical oversight or a fluke in someone’s career journey. And still, many act surprised, as if they’ve stumbled upon a moral dilemma no one could have predicted.
HR: Head of Recruitment… and Revenue?
Imagine you’re the Head of Talent Acquisition at a well-known Indonesian company. You’re responsible for hiring strategy, vendor relationships, and safeguarding the integrity of the recruitment process. You have full access to compensation data, requisitions, hiring timelines, and all that confidential candidate information. In short, you’re the gatekeeper.
Now imagine you also happen to be the founder, or the “advisor,” to an external recruitment agency. A firm that just happens to be one of the vendors regularly tapped to fill roles inside your company. If you’re really bold, you’ll even pop that second job right on your LinkedIn under the title “Founder | Strategist | Disrupting Talent.”
So when that agency invoices your employer for a placement, you’re technically paying yourself. Not with a brown envelope, but with an approved PO and a “thank you” email from your own team. It’s not corruption. At least that’s the story.
If you’re thinking, “This seems like a conflict of interest,” your moral compass is still functioning. However, in Indonesia, you’ll likely hear the resigned chuckle of “Yah, namanya juga Indonesia...” before the subject is changed. The practice survives not because it’s invisible, but because it’s visible and accepted.
This is the corporate side hustle rebranded as strategic leadership. And if nobody’s stopping you, why not keep it going?
PDP, POJK, and Other Laws We’re Pretending Not to Know
Let’s pretend for a moment that laws mean something in the world of corporate hiring. That they’re actual, enforceable rules that HR leaders and company directors are supposed to follow.
Personal Data Protection Law (UU 27/2022) states that candidate data is personal data. You can’t just grab it from your internal ATS and slide it into your agency’s CRM without explicit lawful basis and purpose. But who needs that when the pipeline is “warm,” right?
POJK 42/2020 governs conflict-of-interest transactions for public companies. If a director, commissioner, or executive holds a stake in a vendor (say, a recruitment agency), and that vendor earns money from the company, you need a fairness opinion, an independent board sign-off, and a few other things. Way easier to just, you know, not tell anyone and pretend “the agency just won the bid fairly.”
Trade Secret Law protects non-public, economically valuable information, like candidate shortlists, internal feedback, and compensation discussions. Uploading it to your own agency’s systems is misappropriation. If done overseas, this would trigger lawyers. Here…
GR 35/2021 governs terminations. You can’t just fire someone for self-dealing unless your policies clearly define that behavior as a pelanggaran mendesak. If not, expect a visit to the Industrial Relations Court and some extra legal bills.
Still, no panic. Most people don’t read policy manuals. And when the house of cards does fall, there’s always the reliable “mutually agreed resignation” and a heartfelt LinkedIn post about pursuing one’s passion.
But Isn’t This… Normal?
When you point out the obvious conflict of interest, say, a Head of TA who moonlights as a recruitment vendor to their own employer, the response is rarely shock or denial.
“It’s not a conflict if everyone agrees.”
A comforting mantra, usually delivered with the tone of someone explaining how traffic lights are just a suggestion after 10 p.m. in Jakarta. The implication? Consensus overrides ethics. As if collusion, once mutual, becomes strategy.
You’ll hear a few standard rationalizations, repeated in HR prayer rooms:
“The agency performs well.”
“Leadership knows.”
“Everyone does it.”
“This is how business works here.”
All of which roughly translate to the same thing: We know it’s dodgy, but it’s efficient and profitable, so let’s not make it weird.
This is the magic of Indonesia’s corporate gaslight: wrongdoing simply rebrands itself as local context.
Conflict of interest? No, that’s collaboration.
Kickbacks? That’s just “relationship-based procurement.”
And the really crazy part? No one believes they’re the problem. Even those in the thick of it will happily repost thought leadership on LinkedIn about corporate integrity, often sandwiched between photos of client dinners and “welcome onboard” candidate selfies.
This is not ignorance. Everyone sees the elephant, but since the elephant’s handing out vendor rebates, we all nod and call it a team player. In this setting, corruption isn’t denied. It’s normalized.
Kickbacks, Brown Envelopes & the HR Hustle Economy
Let’s talk about the worst-kept secret in recruitment: the quiet, persistent flow of kickbacks sanitized by shared benefit. It’s not new. It’s just better disguised now.
The classic “brown envelope” is passé. We’re in the age of invoice line-item laundering.
It’s not a bribe, it’s a coordination fee.
It’s not a favor, but a performance incentive.
It’s corruption rebranded with corporate-friendly euphemisms and processed through official vendor systems. No more shady meetings in hotel lobbies. Just a quick note in the remarks section of an agency invoice, cc’d to Finance.
What does this look like in practice?
An agency consistently wins every search, even while sending in candidates that make hiring managers question the existence of screening.
Competing vendors stop receiving briefs altogether, despite months of prior performance.
The chosen firm is always “preferred,” and often coincidentally linked to someone in HR leadership or their extended family’s PT.
When asked why, the response is always the same:
“We value strong relationships and long-term partnerships.”
So does every cartel.
Even in multinationals, this behavior quietly thrives. Why?
HQ is oceans away, and the rot is rarely loud.
The invoices are clean, the hires technically happen,
Local management continues to deliver on headcount goals.
Internal audits rarely question procurement that ends in a hire.
As long as no one’s stealing staplers or leaking IP, it’s easy to look away.
This is a carefully maintained side economy. A quiet agreement among insiders that “as long as everyone eats,” no one will ask where the food came from. Everyone’s just playing the game.
The issue isn’t complex, but the collective refusal to deal with it is.
Is it legal? Often not, depending on how data is handled, vendors are appointed, and disclosures are skipped.
Is it ethical? Let’s not kid ourselves. When the same person controls both the recruitment budget and owns the agency receiving it, we’re no longer in “grey area” territory.
Enforcement? Sporadic at best. Occasionally, someone becomes the unlucky example. But most glide through unbothered.
The tragedy is how well the system functions for those who break it.
Candidates lose transparency,
Companies overpay,
Hiring decisions become less about fit and more about margins.
Meanwhile, the orchestrators of this dysfunction share articles about “ethical leadership” with a straight face.
Yes, this is a problem. And no, the presence of a motivational LinkedIn post with hashtags like #PeopleFirst doesn’t make it any less shady.
But that’s fine. Because it’s on LinkedIn. And in Indonesia, that counts as transparency.
At StratEx - Indonesia Business Advisory we partner with leadership to identify risks, create boundaries, and restore credibility in HR operations. Contact us to design clean, accountable talent acquisition processes rooted in Indonesian realities.