Improving the Rehiring Process and Employee Retention at KC Coal Mining Company

Abstract

In Indonesia, the rehiring of retirement and new contract employees is governed by various labor laws and regulations. The primary legislation that covers employment matters in Indonesia is the Labor Law (Law No. 13 of 2003 concerning Manpower) and its implementing regulations. Article 35, paragraph (1) Retirement in Indonesia generally occurs when an employee reaches the mandatory retirement age, which is typically set at 55 years old. However, this age may vary based on certain circumstances and job positions. Employers are expected to provide retirement benefits to employees who are eligible for retirement. These benefits might include severance pay, pension plans, or other retirement-related benefits. The rehiring of retired employees and new employees has gained prominence as organizations seek innovative strategies to address workforce challenges. This study investigates the motivations behind and advantages associated with retirees and new employees on a contract basis, focusing on a case study conducted within a coal mining company in Indonesia. The objective is to illuminate the drivers and benefits of rehiring retired personnel, shedding light on their impact on organizational performance and employee dynamics. Through qualitative and quantitative research methods, including questioner, interviews, and surveys, this study explores the reasons that prompt the reemployment of retirees and reemploying contract employees for a period of up to 5 years, examining factors such as their domain expertise, institutional knowledge, and the evolving nature of work. Moreover, the study assesses the tangible and intangible benefits of such rehiring practices, encompassing enhanced productivity, cost-effectiveness, mentorship opportunities, and knowledge transfer. The case study approach provides contextual insights into the unique challenges and opportunities within the coal mining industry in Indonesia while also contributing to the broader discourse on talent management strategies. The findings contribute to a deeper understanding of the potential advantages and considerations associated with engaging retirees in the workforce, offering implications for human resource practices, organizational strategies, and the future of work dynamics.