The Influence of Workforce Planning and Subcontractor Company's Labor Compensation on Subcontractor Company's Performance

Human Resource Management (HRM) serves a vital role as a structured and sustainable function not only in achieving organizational goals and enhancing performance but also in building a workforce system that adapts to evolving industry demands. In subcontractor companies, managing workforce planning and compensation presents notable challenges, especially given the prevalence of contract-based or freelance workers. This situation requires strategic HR practices to ensure business continuity and sustained performance. This study aims to examine the influence of Workforce Planning and Workforce Compensation on the performance of subcontractor companies in Jakarta, both individually and jointly. Using a quantitative approach with descriptive and causal analysis, data were collected from 78 subcontractor employees through a census method. Analysis was conducted using Structural Equation Modeling with Partial Least Squares (SEM-PLS) via SmartPLS version 4. The results show that: (1) Workforce Planning has a significant positive effect on company performance (T-statistic = 2.205; P-value = 0.0028); (2) Workforce Compensation also has a strong positive influence (T-statistic = 10.286; P-value = 0.000); and (3) both variables combined significantly impact performance (T-statistic = 8.587; P-value = 0.000). These findings emphasize the importance of well-planned staffing strategies and effective compensation systems in enhancing subcontractor firm performance.