Identification Cost Efficiency Issue: Study Case Astra

Astra Building by JLL Property

As one of the largest publicly listed companies in Indonesia, **PT Astra International Tbk** manages more than 300 subsidiaries, joint ventures, and associated companies, supported by over 100,000 employees. With its diversified business model, Astra creates synergies and opportunities across various industrial sectors, including automotive, financial services, heavy equipment, mining, construction, energy, agribusiness, infrastructure, logistics, information technology, and property.

In its pursuit of sustainable growth, Astra has implemented a sustainability framework through the Astra 2030 Sustainability Aspirations, guiding the Group’s transformation towards more environmentally friendly, inclusive, and sustainable business practices. Additionally, Astra demonstrates strong social contributions through various empowerment programs such as the SATU Indonesia Awards, Kampung Berseri Astra, and Desa Sejahtera Astra initiatives.

With a broad business structure and high operational complexity, cost efficiency remains one of Astra’s key challenges. To address this, Astra consistently monitors key operational metrics, particularly the Revenue per Employee (RPE), as a basis for evaluating workforce productivity and cost effectiveness across its diverse sectors. This article will further examine the identification of cost efficiency issues at Astra based on analysis of data from its latest *annual report*, including measurements such as RPE and the potential for efficiency improvements through digitalization strategies and organizational structure optimization across its main business sectors.

Below is the overview of Astra’s workforce cost structure before and after efficiency initiatives:

Workforce Cost Structure Before Efficiency

Table of RPE Before Efficiency

Revenue Per Employee (RPE) Measurement

Based on Astra’s 2023 financial report:

Net Revenue 2023: Rp316,565 billion Total Employees 2023: Approximately 190,000 people Thus, the Revenue Per Employee (RPE) is calculated as: Rp316,565,000,000,000 ÷ 190,000 ≈ Rp1,665,079,000 per employee

Efficiency Improvement Assumptions

1. Employee salaries are assumed to represent 6.75% of total revenue (based on conglomerate industry benchmarks).
2. Focus on efficiency improvements in automotive, financial services, agribusiness, and logistics sectors.
3. Digitization accelerates the reduction of manual labor needs.
4. Strengthening the workforce in technology and property divisions to support digital transformation and sector growth.

Workforce Cost Structure After Efficiency

Table of RPE After Efficiency

Updated Revenue Per Employee (RPE)

After the efficiency improvement:

RPE = Rp350,000,000,000,000 ÷ 170,000 ≈ Rp2,058,823,529 per employee

Why Efficiency Improvement Was Needed

1. Astra targets 88% non-coal business contribution by 2030.
2. Despite solid net profit, labor cost burden remains significant and needs to be optimized.
3. Digital transformation initiatives (such as Equinix JV, OLX acquisition, Halodoc investment) drive the need for a leaner workforce.
4. Large workforce structure reduces margin efficiency.
5. Automotive and financial services sectors can be highly digitized to cut costs.
6. Technology and property sectors are growing and require more strategic focus.

How Efficiency Was Achieved

1. Showroom and dealer automation in the automotive sector.
2. Digitalization of financial services (e-payments, digital insurance claims).
3. Modernization of agribusiness and logistics supply chains.
4. Strengthening investments in information technology and property developments.