Advances in Economics, Business and Management Research, volume 207

Proceedings of the International Conference on Economics, Management and Accounting (ICEMAC 2021)

Human Resources Management Review on Netflix

Nanda Hidayati
1
STIE IPWIJA, Jakarta, Indonesia
*
Corresponding author. E-mail: nanda.assalaam@gmail.com

ABSTRACT
Human capital is one of an organization's most crucial assets. In other words, an organization's success is directly
related to its workers' performance. As a result, managers, and specialists attempt to ascertain the most significant
aspects of employee motivation. The effects of working circumstances, job content, and career advancement on
job motivation and performance are examined in this study. The management system offered by Netflix may be a
little contrary to the standards usually set by human resources (HR) practitioners. Being in a competitive climate
and technological development, the previous practices that might have been effective now look outdated and not
applicable in the current and future business environment. So, the role of HR in the future seems no longer as a
Business Partner. It should become an 'Enabling Business.' Netflix has proven that HR can be an enabling business.

Keywords: Human Resources, Netflix, Working Conditions, Job Content, Work Motivation.

1. INTRODUCTION Netflix enables customers to watch their

favorite episodes from virtually any location, at any
Netflix is a media company for movie lovers. time, and on practically any device (smartphones,
Netflix has successfully transformed into one of the smart TVs, tablets, PCs, and laptops). One of
Video on Demand (VoD) providers with the most Netflix's added values is that it is content free of
operational areas worldwide. They made a advertisements, so viewers do not have to wait for
significant transformation to get the best team in television series broadcasting schedules and can
their organization. There is no hesitation. The decide for themselves the content they want to enjoy.
company will only hire players (grade) "A" to get the Along with improving the user experience, Netflix
best practices. Regardless of how much an employee continuously attempts to strengthen its reputation as
contributed to the prior organization, the employer a quality corporation wanted by individuals,
will discharge them if their abilities are no longer particularly those in their twenties and thirties. As a
required. Letting go of people whose talents are no result, they are now well known for their culture.
longer necessary for the firm's evolution (as Netflix's
technology advancements demonstrate) is a win-win
situation for both the company and the employees.
2. LITERATURE REVIEW
In addition to companies experiencing losses. 2.1. Human Resource Management
It is not just the company that suffers, and The value of human resources in a company is
employees will also experience a phase of frustration increasingly recognized, to the point that individuals
when forced to try to achieve performance beyond are viewed as the organization's most vital resource.
their reach. For example, companies face challenges [1]. Humans are the foundation for an organization
transitioning from DVD delivery content via because that makes the organization more
cyberspace to VoD. Companies need to find people developed. Human resource management includes
who are very experienced with cloud services that the management of workforce, personnel,
will enable them to operate on a massive scale. employees, employees, or members so that it can
Netflix's best practice is to strive to put together a more easily identify the source from which the
great team of employees dedicated to the company's person was obtained, determine or calculate how
benefit. many employees are needed, plan and analyze the
fulfillment of needs to evaluate the work results [2].

Copyright © 2022 The Authors. Published by Atlantis Press International B.V.

This is an open access article distributed under the CC BY-NC 4.0 license -http://creativecommons.org/licenses/by-nc/4.0/. 391
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Human resource management (HRM) In the current digital era, Internet users in
implements procurement, training, and development Indonesia use it more to watch movies/videos, and
activities and compensation and other human one of the companies that provides video streaming
resources (HR)-related operations to develop services is Netflix [6]. Netflix is one of the most
productive individuals [3]. Human resource popular video-on-demand subscription services,
management encompasses all management choices with over 151 million paid customers in over 190
and activities that directly impact human capital. countries and a diverse selection of television shows,
HRM is required to maximize the effectiveness of an documentaries, and feature films in various genres
organization's human resources. The objective is to and languages [7]. Since first entering Indonesia in
establish a functional work unit inside the company 2016, Netflix has attracted a lot of media attention
[4]. because of the blocking from the Telkom Group,
which incidentally is the largest telecommunications
Human resource management is a process
and network service provider in Indonesia [8].
related to implementing management functions
ranging from planning, organizing, directing to Netflix itself is a form of a business entity
supervising, which plays a vital role effectively and located and proliferating abroad, expanding its
efficiently in supporting the achievement of services in every country, including Indonesia.
individual and organizational goals. For an Throughout 2019, the number of Netflix users
organization, human resource management concerns increased to 8.8 million. Which previously
the overall human affairs in the organization to take numbered 7.6 million subscribers. Meanwhile, the
an active role in achieving the goals that have been number of paid users of the Netflix application
set. Therefore, if the human resources in the worldwide is 167 million. The total number is 100
organization are managed and utilized correctly, the million, not from the United States. Revenue from
organization will be able to run its business Netflix alone in 2019 reached 5.47 billion US
optimally. dollars, and EPS was only estimated at 1.30 US
dollars. From this achievement, we can see the
2.2. Netflix Company soaring revenue from Netflix itself, which even
Netflix, according to Nugroho, is a exceeded previous expectations where the analysis
subscription-based movie streaming service that predicts that Netflix's revenue will reach US$5.45
offers the newest films and television episodes billion [9].
daily. Netflix is a service based in the United States,
2.3. HR Management at Netflix
namely in California. It began as a DVD rental store
before expanding into the internet market. Netflix 2.3.1. Talent Management Strategy: No
has just recently been available to internet users in Compromise
various Asian nations. Indonesia is no different.
Netflix arrived and officially launched its service in Most organizations sometimes overlook talent
Indonesia on Friday, February 5, 2016. Netflix management as a strategic endeavor. This issue is
subscriptions start at Rp. 109,000 for the basic particularly prevalent in media firms, an industry
package and go up to Rp. 169,000 for the premium with a low rate of new hires. Netflix is different from
plan [5]. other companies, and they are emphatically against
the idea. In 2001 they laid off a third of the
In 1999, Netflix started its business activities by company's employees. When a company is on the
providing DVD rental services. Unlike the DVD verge of bankruptcy, all the remaining employees
rental business, Netflix does not have a physical come together to build the awareness that those
store. DVD orders are made via email, followed by remaining are high-performing employees. It tells us
sending physical DVDs to customers. By paying a that the best thing we can do for the business is
predetermined subscription fee every month, recruiting just the finest performers. Please take
customers are given the freedom to rent any number advantage of the complex economic environment to
of movie titles. In 2007, Netflix began providing a their advantage.
streaming service to reduce the cost of shipping
DVDs. It started with 2,000 titles which then showed Thus, what makes workers exceptional? The
a good response from customers so that it rose majority of firms are unaware that exceptional
rapidly to reach 20,000 titles within three years. The workers are subjective. Its regular recruiting
trend of the "home entertainment" market continues procedure evaluates a candidate's qualities only
to be in demand, so that Netflix is starting to become based on their CV and educational credentials and, if
the leading choice for digital entertainment relevant, recommendations. Few employers actively
connoisseurs. strive to match employees' talents (which are not
necessarily represented in academic credentials)

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with job requirements. The descriptions are written premium restaurant, it is reasonable for the sales
information outlining duties and responsibilities, marketing staff to interact with customers. However,
working conditions, job relationships, and job it is inappropriate for Netflix workers to interact
aspects in a particular position in the organization alone or with colleagues. Act in the Best Interest of
[10]. A terrific employee who advances to the level Netflix –Apply in the best interest of Netflix.
of player A in one firm is likely to advance to the
Working conditions influence work motivation
level of player B in another, and vice versa. The
with a positive regression direction. This can be
effect of hiring the right talent is multiplicative. If
interpreted if working conditions are getting better,
the team is filled with the right people and is kept
then work motivation will increase. This finding
motivated about developing their talents and
supports the opinion of [11], [12], [13], [14] states
challenges, everyone will be great at facing tough
that an essential factor that drives work motivation
challenges. Thus, once you have identified the most
is working conditions. If the working conditions
incredible talent, you must empower them to address
provided are good enough, it will influence work
the organization's challenges.
motivation.
2.3.2. Forming High Performance
2.3.4. Compensation philosophy on Top
At Netflix, a great workplace is not defined as Market
a workplace with great benefits, a beautiful office, or
a delicious cafeteria. However, the great workplace At Netflix, there are no performance bonuses
at Netflix is what if every employee could efficiently or annual bonuses. They believe that it is not
attract and retain amazing coworkers. There is a necessary if you hire the right employees. The
phrase that is always emphasized by the CEO that philosophy at Netflix is, if you hire employees who
the Netflix leader must be able to achieve, maintain are mature and put the company's interests first, then
or 'reduce' intelligently so that Netflix will have a an annual bonus will not make the employee work
star employee in every position. The test given by harder or be more intelligent. At Netflix, they let
the leaders/managers at Netflix was: "Which of my employees take interviews with competing and
employees, if they were going to leave this company similar companies to determine the market pay for
for a similar type of job at another company, would the job. Even Netflix's HR department asked them to
I keep them at Netflix?" share what competitors are offering because that is a
valuable source of information. HR practitioners of
2.3.3. Giving freedom and responsibility other companies usually avoid this, but on Netflix, it
(Freedom & Responsibility) is allowed. At Netflix, they trust the wage market
more.
If the company gets bigger, then the complexity
tends to increase. Netflix initially provided an annual
leave/off/vacation policy for employees. However, 3. RESEARCH METHODS
this policy was later abolished. Why? Because The following section details the methods used
employees at Netflix used to work online every to ensure that this study is conducted systematically,
night, sometimes on holidays, serving email, directed, and transparently. The following diagram
occasionally taking breaks. So, Netflix does not depicts the course of this study:
track the number of hours its employees work but
gives employees the freedom to take their number of 1) Search for news articles and journal articles.
days off. For example, employees can take an Journal searches were conducted using a
extended vacation and return to work with fresh variety of sources. The following keywords
were used to locate relevant journals: profiles,
ideas or inspiration for the company. The bottom line
human resource management at Netflix and
is that Netflix does not have a dress code for
other firms, and related publications.
employees to wear, but that does not mean you can
be naked in the office. 2) Selecting articles. Following that, relevant
news items and journals are picked from the
So, what are the rules for official travel, results of the search phase.
relationships with vendors/suppliers, or others that 3) Conduct a review of the selected article. The
the company generally gives strict rules/standards? articles that were discovered and selected are
This is the exciting part Netflix's general regulations then analyzed to create a corporate profile and
on spending, entertainment, gifts, and travel are highlight the human resource management
available here. When employees travel on business, practices employed since the industry began.
they must feel like spending their own money. The 4) Gaps analysis. The next step is to analyze the
expenses incurred are required and essential for the review results to search for gaps to expand
business's operations. For instance, if you are at a Netflix's business.

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5) Improvements. The final stage is to make connections were added. It does not end there.
recommendations based on gaps at HRM in Netflix became accessible on the Apple iPad,
Netflix to achieve its business goals and iPhone, and iPod Touch, as well as the Nintendo
direction in its business processes. Wii, in 2010. Netflix has opened offices in Canada,
Latin America and the Caribbean, the United
4. RESULTS AND DISCUSSION Kingdom, and Ireland since the same year.
Additionally, there is the Nintendo Wii. Netflix has
4.1. Exciting things in HR Management opened offices in Canada, Latin America and the
Netflix Caribbean, the United Kingdom, and Ireland since
the same year. Netflix had topped 30 million users
Netflix has good management because it can globally in 2012 [16].
penetrate almost all mass media, especially in
subscription tv and video streaming. The number of 4.3. Similarities and Differences with Other
consumers who subscribe to Netflix streaming Film Industries
access in Indonesia, Netflix content that has a high
Netflix and Viu are the most popular paid
rating, Netflix has the availability of qualified
video-on-demand service platforms, with iFlix,
technology so that it can penetrate almost all mass
Google Play Movies & TV, iTunes, Viki, Tribe, and
media, especially in visual form, can reduce
Catchplay following behind [17]. There are several
unemployment in Indonesia due to the expansion
differences between Catchplay and other similar
carried out by Netflix [5]. Netflix has very
features in IndiHome, such as Iflix and Netflix.
interesting profiled, my list, and continue features
However, the critical difference is in the service.
that can make it easier for users to set customized
Iflix and Netflix are more focused on TV series,
profiles such as profiles for children and adults and
while Catchplay focuses on streaming Blockbuster
manage a list of movies or movies series they want
movies [18]. It can be seen in this study that Video
to watch. Netflix's ideas and efforts have elevated the
on Demand both broadcasts tv series in priority. The
company to the top spot in the Indonesian SVOD
difference with Catchplay is that it focuses more on
(Subscription video-on-demand) industry. This is
streaming Blockbuster movies. According to
due to Netflix's hegemony, particularly original
Khafid, the similarities with other film industries are
programming. By refining its strategy, Netflix may
streaming services and similar things, namely a).
continue to internationalize its product and service
Subtitles in English and the language of each country
offerings in Indonesia [15].
of service. b). Ad-free. c). I can watch offline. d).
Netflix's strength lies in its original content Can use 4K resolution (there is an extra charge for
continuously produced and has good quality. Netflix Netflix). e). Child mode (to control the child to
is a diverse application because it presents a range watch according to his age). The styles are the same
from the West and films from Asia (including in terms of the type and amount of content, except
Indonesia) [9]. that Netflix has 47 thousand series and four thousand
films, and Disney+ has 7,500 serial episodes and 500
According to merdeka.com's Netflix page,
movies. Netflix is available in several countries and
Netflix was founded on April 14, 1998, with 30
territories, totaling 190. Netflix is unavailable in
personnel. At the time, around 925 films were
only four countries: China, North Korea, Crimea,
available for internet rental at the cost of
and Syria. The United States, Canada, the
approximately Rp. 40,000 per rental and
Netherlands, Australia, New Zealand, the United
approximately Rp. 20,000 for delivery. In September
Kingdom, Ireland, Germany, Italy, Spain, Austria,
1999, the notion of a monthly subscription was
Switzerland, India, France, Japan, Belgium,
established. Netflix then sold 5.5 million shares in its
Portugal, Luxembourg, and the Nordic nations are
initial public offering (IPO) on May 29, 2002. The
among the countries that may access Disney+ [19].
general public has embraced Netflix. This is seen by
the cumulative [16]. 4.4. Similarities and Differences with Other
4.2. Netflix subscribers recorded in 2005, Industries
reaching 4.2 million. Netflix and Digital TV have something in
common. Namely, both services are in the form of
Since 2008, Netflix has also partnered with
shows to be watched. According to [20], Streaming
electronics manufacturers to provide its users with
services require internet access so that they require
streaming programs. Netflix collaborates with the
internet data to enter the network, and in subscribing,
Xbox 360, Blu-ray disc players, set-top boxes for
they have a predetermined bill while TV broadcasts.
televisions, and the Apple Macintosh computer. A
This digital is free of charge and does not require
year later, the PS3 and various additional internet

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Internet access or requires a smart TV with an expand in Netflix subscription registration so that
internet connection and using satellite or satellite registration is not done using only a credit card [22].
dishes. According to CNN Indonesia (2021), Digital
Netflix has offered several packages where
TV and Video Streaming Both use the latest
users can choose according to their purchasing
technology. Many people find it difficult to
power so that, in terms of Perceived Price, the
distinguish between digital TV and video streaming
company can make improvements in terms of price
services. Some even consider the two the same. One
so that the price offered is more affordable than its
of the differences between digital TV and video
competitors because many competitors have similar
streaming services lies in the subscription system.
services to Netflix, for example, the company can
Streaming services generally charge a fee to
offer family packages. The package can be accessed
subscribe, but not with digital TV [21].
by several users at once so that the subscription price
The second difference lies in the use of the paid by each customer becomes cheaper. Netflix can
internet needed to access streaming services. Digital carry out promotional activities in advertisements in
TV does not require internet access or must use an several media such as newspapers, magazines, and
intelligent television connected to the internet. billboards to make Netflix better known by the
Digital TV broadcasts are terrestrial broadcasts Indonesian people [23].
commonly seen every day using digital frequencies.
Netflix must comply with the laws and
Older model televisions can still be used to capture
regulations owned by the Indonesian government to
digital TV broadcasts if they are connected to a set-
expand into the Indonesian market. There need to be
top box. The set-top package combines the television
clear regulations between Netflix and the Indonesian
set with the UHF antenna. The set-top box is
government and private parties to avoid disputes in
changing the transmission from analog to digital
its implementation. Netflix itself must sort out
broadcasts. Digital TV does not require internet
content and shows that will be marketed to Indonesia
access or must use an intelligent television
to have no complaints about its performance.
connected to the internet. Digital TV broadcasts are
Establish cooperation with companies and related
terrestrial broadcasts commonly seen every day
parties in Indonesia, helping to develop the economy
using digital frequencies. If linked to a set-top box,
in Indonesia [5].
older model televisions can still be used to record
digital television broadcasts. The set-top box is the 4.6. What to learn from Netflix for Other
component that links the television set to the UHF Industries
antenna. The set-top box is changing the
transmission from analog to digital broadcasts. Netflix is a streaming service that offers Netflix
Digital TV does not require internet access or must original films and shows, material produced by
use an intelligent television connected to the Netflix, and collaborations with worldwide
internet. Digital TV broadcasts are terrestrial filmmakers (Global Film Maker) to differentiate
broadcasts commonly seen every day using digital itself from other streaming services. Netflix's
frequencies. Older model televisions can still be original films introduce audiences to a worldwide
used to capture digital TV broadcasts if they are culture. In Indonesia, Netflix premiered a Netflix
connected to a set-top box. The set-top package original film named "The Night Comes for Us" for
combines the television set with the UHF antenna. the first time [24]. Other studies concur: Netflix's
The set-top box is changing the transmission from edge over other streaming services is that it produces
analog to digital broadcasts. Netflix original films and series and partners with
worldwide producers. Netflix's original films
4.5. Improvements for Netflix introduce audiences to a worldwide culture. Netflix
Previous research has several suggestions officially and for the first time in Indonesia launched
regarding Netflix services, including 1). Seeing the a Netflix original film titled "The Night Comes for
many competitors who offer similar services, such as Us" [25]. One strategy to increase value and
Netflix, Netflix should improve prices to provide competitive advantage is to apply brand equity [26].
more competitive prices than its competitors. 2). Nathaniel's research said respondents agree that after
Regarding the offline mode feature that was just seeing Netflix ads on Youtube Ads, respondents pay
launched in December 2016, it would be better if this attention to the business of marketers, the
feature was improved in extending video storage advantages of the services offered by Netflix, the
time and not limiting content that can be watched characteristics of the Netflix service, and have
offline so that Netflix users will be more flexible in started to pay attention to the price of the service
accessing downloaded content. 3). It is advisable to [27].

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