Human Resource Management Assistance to Improve Msme Performance in Diaspora Communities in Kuala Lumpur

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FORMOSA NEWS -  Malaysia - HRM Training and Green Practices Boost MSME Performance in Indonesian Diaspora Communities. A 2026 study by Indah Wahyu Utami, Saryadi, and Ihsan Kandung Adirangga from Universitas Duta Bangsa Surakarta, in collaboration with Sharina Osman from Universiti Kuala Lumpur, shows that structured human resource management (HRM) training significantly improves the performance of micro, smSall, and medium enterprises (MSMEs) within Indonesian diaspora communities in Malaysia. Published in the Asian Journal of Community Services, the research highlights how combining HRM systems, digital tools, and sustainability practices strengthens business competitiveness in a globalized economy. The study focuses on MSME entrepreneurs affiliated with the Muhammadiyah Special Branch (PCIM) in Kuala Lumpur and Selangor. These businesses play a critical role in supporting the economic stability of Indonesian diaspora communities. However, many operate informally, without structured management systems, limiting their ability to grow and compete in increasingly digital and sustainability-driven markets.

Addressing Structural Gaps in Diaspora MSMEs
Across Southeast Asia, MSMEs are widely recognized as economic drivers. Within diaspora communities, their role is even more strategic, serving as both income sources and social anchors. Yet, many diaspora-based MSMEs face layered challenges: limited managerial skills, low digital literacy, restricted access to capital, and minimal exposure to structured business models. In Malaysia, Indonesian diaspora entrepreneurs must also navigate cross-border regulatory systems and cultural differences. These complexities make effective human resource management not just beneficial, but essential. “Structured HRM practices are critical for improving organizational performance and employee productivity, especially in complex business environments,” note Indah Wahyu Utami and colleagues from Universitas Duta Bangsa Surakarta.

Practical, Community-Based Research Approach
The research was conducted through an international community service program jointly organized by Universitas Duta Bangsa Surakarta (Indonesia) and UniKL Business School (Malaysia). The program targeted MSME owners who had been running their businesses for at least two years, primarily in the culinary and retail sectors.

Instead of relying on purely theoretical instruction, the researchers used a participatory and action-based approach. Data were collected through:

• Focus group discussions (FGDs).
• In-depth interviews.
• Direct observation of business practices.
• Pre-test and post-test evaluations.
• Documentation of training and mentoring activities.

The intervention included structured training sessions, hands-on mentoring, and the implementation of practical tools such as job descriptions, performance evaluation systems, and Business Model Canvas (BMC). The program also introduced Green HRM, integrating environmental sustainability into daily business operations.

Key Findings: From Informal to Structured Businesses

The study reports clear improvements in both managerial capacity and business performance among participants.

Major outcomes include:

• Improved HRM knowledge - Participants gained a stronger understanding of job design, employee coordination, and performance management.
• Structured organizational systems - Businesses that previously operated informally began implementing clear job descriptions and defined roles.

Adoption of digital tools

MSMEs started using:

• Google Forms for performance evaluation.
• Trello for task and project management.
• Spreadsheets for attendance and reporting.

Integration of Green HRM practices

Entrepreneurs adopted:

• Energy-saving measures.
• Waste reduction strategies such as “Zero Waste Kitchen”.
• Eco-friendly packaging solutions.

Enhanced business performance

Improvements were recorded in:

• Service quality.
• Customer satisfaction.
• Digital marketing engagement.
• Product diversification.

Before the program, around 60% of participating MSMEs experienced stagnant turnover. After the intervention, many reported increased customer engagement and more dynamic business strategies, including the launch of new product variants.

Key implications include:

• Governments can adopt HRM-based empowerment models to strengthen MSME competitiveness.
• Universities can design community service programs with long-term, sustainable impact.
• MSME owners can use structured HRM and digital tools to scale their businesses.

The study also underscores the importance of international collaboration. The partnership between Universitas Duta Bangsa Surakarta and Universiti Kuala Lumpur facilitated cross-cultural knowledge exchange and introduced global business perspectives to local entrepreneurs.

Author Profiles

Indah Wahyu Utami, S.E., M.M. – Lecturer at Universitas Duta Bangsa Surakarta, specializing in human resource management and MSME development

Saryadi, S.E., M.M. – Academic at Universitas Duta Bangsa Surakarta with expertise in business management and entrepreneurship

Sharina Osman, Ph.D. – Lecturer at Universiti Kuala Lumpur, specializing in international business and management

Ihsan Kandung Adirangga, S.E., M.M. – Researcher at Universitas Duta Bangsa Surakarta focusing on organizational development

Source

Utami, I. W., Saryadi, Osman, S., & Adirangga, I. K. (2026). Human Resource Management Assistance to Improve MSME Performance in Diaspora Communities in Kuala Lumpur. Asian Journal of Community Services, Vol. 5 No. 3, hlm. 123–134.
DOI: https://doi.org/10.55927/ajcs.v5i3.7
URL:https://journalajcs.my.id/index.php/ajcs