Figure 2 - uploaded by Syed Chowdhury
Content may be subject to copyright.
Source publication
The objective of the study is to represent the current state of outsourcing of Human Resource functions attelecommunication sector in Bangladesh. Specifically, the study addresses the issues of when and under whatcircumstances does HR outsourcing contribute value to the companies by attempting to identify environmentaland organizational characteris...
Context in source publication
Context 1
... questions 05 and 06 deal with findings whether the organization has any HR department. If yes, then how many employees are there in the department? The answers from these three questions will give us an understanding of correlation of having HRD with the number of total employees. When we add the answer from question 07, which answers whether the organization outsourcers any HR activities, will widen our understanding of the relations among these factors. c) The first part of question 08 has been designed to find the effect, in ordinal scale, of nine different HR activities on overall performance of the organization. Collected data has been converted into interval scale in analysing and further comparison. This data would later be used in collaboration of others found in questions afterwards. The second part simply is to know whether the organization outsource those functions or not. d) Question 09 inquires the reason(s) for outsourcing, if they do or why would they consider outsourcing, if they don't do that already. e) Question 10 is the continuation of question 08. If the answer of the second part is no, then this question inquires the reasons in ordinal scale, which later would be converted into interval scale assigning certain point in each order. f) In the last question (number 11), we will have a picture of the level of satisfaction connected to different expectations of the organizations who are currently outsourcing HR functions. This is actually a vital feedback for the HRM outsourcing firm, providing the service. Regardless of the number of employee, all the organizations we have surveyed have HR departments. The range of number of employee was 800 to 5000 with an average of 2100 people. The number of employees in HR department varies from 14 to 50 people with an average of 23 people. Total employees per person in HR department vary from 53 to 106. It appears, as the number of the people in an organization increases, the necessity of outsourcing emerges. To find whether there is any relationship between outsourcing and total number of employees in an organization, CHI SQUARE test was done. Result of the analysis: Table 1, 2 and 3 show the result of the analysis. The analysis shows that at 0.5 level of significance and 2 degree of freedom the calculated value of CHI square is 1.8333 which is less than the table value 5.99. So, at 5 percent level of significance, we can conclude that there is no significant relationship between outsourcing HR functions and total number of employees. Apparently, many people are under the impression that there is a negative correlation between the number of employees in the HR department and outsourcing HR functions. To find the relationship between number of people in HR department and outsourcing, again, CHI Square test was done. Result of the analysis: Table 4, 5 and 6 show the result of the analysis. The result shows that at 5 % level of significance and 2 degree of freedom the calculated value of chi square is 1.8333 which is less than the table value of 5.99. So, we can conclude that there is no significant relationship between outsourcing and number of employees in HR department. Not all HR functions are of equally needed to be outsourced. Clearly, in a country like us activities like recruiting and selection require greater sophistication than the functions like temporary staffing, apparently, therefore of much greater relevance for outsourcing. The relative importance of various HR function was done by converting ordinal ratings of the functions to numeric interval value. It was determined using the following scale: Then the numbers were averaged to find which function is more important to the organizations on average. Result of the analysis: Table 7 shows Relative importance of different HR functions. Figure 1 shows the histogram of ordinal response of relative importance of different HR functions. The analysis shows that Recruiting and Selection is ranked first according to the importance to the organization. Temporary staffing is considered to be of lowest importance among other HR functions by importance. The functions in order of importance are as follows: 1) Recruiting and Selection 2) Appraisal 3) Training and Development 4) Job Design 5) Compensation and Reward 6) Employee Benefits 7) Strategic HR planning 8) Employee Assistance /Counseling 9) Temporary Staffing The causes for outsourcing can be anything between desires to save money to compensate for lack of experience in handling HR related affairs. The most prominent of the reasons include desire to achieving special competence, improvements in quality, save time, save money, and lack of experience. Besides, there was also an attempt to see whether these motives that usually prompt people to outsource vary according to different functions of an organization. Method: Frequency analysis was done to identify the most frequent reason of outsourcing HR function. Result of the analysis: Table 8 and Figure 2 shows the causes of outsourcing. Among others, it was found that the most important cause of outsourcing HR function is the desire to special competence of the HR firms for 40% of the total, followed closely by improve quality and harnessing saving time, representing 25% and 20% respectively. Other significant causes of outsourcing include desire to save money and compensating for the lack of ...
Citations
... Outsourcing (HRO) has become an imperative phenomenon in today's business world and in Bangladesh (Mahmud, Billah, Chowdhury, & Mustafizur, 2012). For outsourcing human resource functions, organizations in Bangladesh are hiring one or more third parties or Professional Employers' Organization (PEO) and get their work done partially or wholly, according to their need (Mahmud et al., 2012). ...
... Outsourcing (HRO) has become an imperative phenomenon in today's business world and in Bangladesh (Mahmud, Billah, Chowdhury, & Mustafizur, 2012). For outsourcing human resource functions, organizations in Bangladesh are hiring one or more third parties or Professional Employers' Organization (PEO) and get their work done partially or wholly, according to their need (Mahmud et al., 2012). ...
... accumulation, facilitation, and utilization strategy (Itika, 2011 (Mahmud et al., 2012) also added that the govt utilized outsourcing services that were not core in nature, or any other services in which they had no expertise. ...
In the present business world, one of the trendy business words is ‘outsourcing’, which means using another source beyond the organization to complete various functions. Outsourcing has many branches: Information Technology (IT), Human Resource Management (HRM), Audit, Logistics, Business Process Outsourcing (BPO) etc. This thesis focused on the contribution of Human Resource Outsourcing (HRO) to Bangladesh business world. Generally, HRO means outsourcing of HR activities, like- recruitment, training, performance evaluation etc. on behalf of its clients with the intention to save time and avoid other hassles and focuses more on core activities. In spite of the fact that significance of HRO is expanding day by day in the nation, still many organizations are bearing misconception with outsourcing and unconscious of the issue. Moreover, academicians are not giving significance on this zone of HRM for their exploration. This is one of the reasons for undertaking the research. The research attempted to examine every single part of HRO practice in Bangladesh and discover its effect on organizational performance as well.
HRO in Bangladesh is still at the starting stage. Many outsourcing firms are entering in the business. However, there was no registered list of authorized service providers in the country. Online portals were the most important source to reach HRO vendors. The research used mixed method of study: both qualitative and quantitative analyses to ensure more validity of the study. As a part of triangulation, qualitative part was verified with the quantitative information in this research. In the qualitative part, in-depth method was used to interview the Human Resource (HR) head and senior HR managers using unstructured questionnaire. For quantitative analysis, purposive sampling was used to interview supervisors, team leaders, or managers with the help of Google form.
The focus of qualitative part was to explore the current situation of HRO in Bangladesh (BD). Besides measuring the organizational performance based on HRO practice in the country, other important issues like, nature of service takers, nature of service providers, motivation for utilizing HRO, challenges of HRO etc. were also explored to bring out the full picture of HRO in the country through the in-depth study. To measure the organization's performance based on the qualitative discussion of HR professionals, some assumptions were developed on (a) organizational growth, (b) time and cost-effectiveness, (c) adverse effect on employees, and (d) customers’ perspective. In the quantitative dimension, those assumptions were measured using correlation and regression models.
Though, qualitative part showed good relationship between dependent and all independent variables; but from the quantitative analysis only one independent variable ‘time and cost effectiveness’ showed significant positive relationship with dependent variable ‘organizational performance’.
As there was insufficient information regarding HRO in the country, in-depth interview was very helpful. Once the good number of information was collected through in-depth study, interview using Likert scale was appropriate to justify the same situation from another point of view. As qualitative study was uncomfortable and more time consuming than other methods, like questionnaire using Likert scale, and as there were chances of non-focus of some important areas; using mixed method for this investigation was much legitimized.
In Bangladesh, the absence of scholarly research in this field and lack of quantitative examination on it have had an incredible effect on future analysts. The investigators can pick another piece of HRO for research or can accomplish progressively broad examinations on this theme. For the policymakers, this exploration was an achievement. Policymakers can use these findings as a guideline for future policies. Again, vendors can use this paper to make their service more customer-oriented, as the paper also describes the inadequacy of HRO services in the country.
... Several studies unraveled that jobs are designed for fostering autonomous motivation (Hackman, & Oldham,1976) and sharing knowledge (Foss, Minbaeva, Pedersen, & Reinholt, 2009;Gagné, 2009). Precisely, job design has two significant dimensions in relation to autonomous motivation which are namely job variety and autonomy (Lado, & Wilson, 1994;Mahmud et al., 2012). When and how to carry out specific tasks depend on the degree of freedom to the extent a job has provided to an employee (Hackman and Oldham, 1976). ...
This paper aims to explore the effectiveness of social capital-based-on-the-job training practices behind developing managerial skills in organizations. Given the fact that there is paucity in prior research to use social capital as a crucial theoretical lens involving structural, relational and cognitive dimensions and show how they influence on the job training practices that enhance material skills in organizations. Hence, empirical data was collected using in-depth interviews with semi-structured questions from 12 managers of three telecommunication MNCs in Bangladesh. We found that relational and cognitive dimensions of social capital were the basis for enhancing managerial skills in organizations. We employed qualitative investigation with cross case analysis over homogeneous group structure at the upper and mid managerial echelons to identify level of effectiveness generated by social capital based on the job training that facilitate managerial skills development rather than structured training & development process. Therefore, the paper unveils the important theoretical findings and managerial implications. First, our findings revealed that on the job training was essentially designed for homogenous groups to develop managerial skills based upon the trust, obligations and identification of relational as well as shared narratives, codes & languages of cognitive dimensions. Second, social capital dimensions enormously engage on the job training for developing managerial skills set in terms of Up-skilling pro-activities, change handling skills, technology application skills, pressure management skills, oral & written communication and team player ability required for organizations to attain growth. From the managerial viewpoint, by facilitating social capital-based on the job training, organizations can obtain sustained competitive advantage and create value for themselves in the long run.
... It has 100 years of history of practices in rural areas among farmers, paddy and crops labour, household women worker, irrigations, carpenters, and masons. Now a days the scope is more explored in the area of security, cleaning, business consultancy, product packaging, labelling, event management, product delivery, transport, logistics services, food supplies; IT supports (Mahmud et al., 2012). Likewise, a good number of HR outsouring firms are functional in Bangladesh (Islam & Rahman, 2019). ...
... Research in Asian business firms shows that 80-90 per cent of firms outsourced HR function. For example, Bangladeshi private sector firms outsourcing in the last ten years (Hossain & Abdullah, 2017); the telecommunication industry outsourced recruitment and selection to save money and develop a quality process (Mahmud, Billah and Chowdhury., 2012); 13.64 per cent of firms outsourced training and development. The degree of outsourcing is gradually increasing (Hossain & Islam, 2015). ...
In the contemporary age of global business, human resources outsourcing has received enormous attention. The academic research on this area in the context of Bangladesh was scanty despite a good number of private sector organization are doing outsourcing. Following this lead, the prime thrust of this research was to evaluate the relationship between HR cost efficacy, innovative HRM practices and human resources outsourcing and impact under the lens of transactional cost of economy and RBV theory. The judgmental purposive sampling method was applied to set sample and close ended questionnaire was employed to collect primary data from 115 respondents of private sector of Bangladesh. The partial least square based structural equation modeling was used to attain the objectives and the SMART PLS 4.0 was used to analyse data. The exciting findings concluded that there was a strong association between HR cost efficacy, innovative HRM practices and human resources outsourcing and a significant impact between the latent variables. Finally, implications and future directions were articulated for the practitioners, readers, and stakeholders.
... The results of this study are supported by Kiiru (2015) who denoted that the HR needs of a commercial bank can vary over time, depending on factors such as business growth, mergers and acquisitions, or changes in workforce dynamics. Outsourcing employee relations services provides banks with the flexibility to scale their HR support up or down as needed (Mahmud, 2012). Service providers can adjust their resources and expertise to meet changing demands, allowing banks to adapt to organizational changes more effectively. ...
Kenyan commercial banks face significant challenges in terms of performance, particularly in relation to profitability, capital adequacy, asset quality and customer satisfaction. The Kenyan banking sector has experienced rapid growth over the past decade, but this has also led to increased competition and pressure on banks’ performance. This study established the effect of outsourcing human resource services and the organizational performance of commercial banks in Nakuru City, Kenya. The study was anchored on resource based view theory. The study used explanatory research design. Twenty eight (28) licensed commercial banks in Nakuru City were targeted. Purposive sampling was used to sample the branch managers, credit managers and operational managers in the twenty eight (28) licensed commercial banks in Nakuru City making a sample size of 84 respondents. Data was collected using structured questionnaires. Statistical Package for Social Sciences (SPSS) software aided in analysis of the quantitative data collected where analysis was conducted using both descriptive and inferential statistics. The results indicated that there was a positive and significant correlation between outsourcing human resource services (r=0.295, p=0.013) and performance of commercial banks. The regression results show a positive and significant effect of outsourcing human resource services (β = 0.041, Sig. = 0.046) on performance of commercial banks which implies that outsourcing HR services affects performance of commercial banks positively. The study concludes that the outsourcing HR services allows banks to tap into the expertise and specialized knowledge of HR service providers who have experience in managing these complex HR processes and recommends commercial banks in Nakuru City to outsource employee relations services since they can help maintain confidentiality and impartiality in sensitive employee-related matters.
... Hasliza and Norbani (2011b), Mahmud et al. (2012), Lepak et al. (2004) Foreign ownership A variable to indicate whether a firm is owned by foreign multi-national corporations or local domestic corporations. Chiang et al., (2010); Sheehan and Cooper (2011) Union ...
... , Butler et al. (2010) Degree of outsourcing The client's extent of outsourcing measured by the number of activities outsourced by the client. Delmotte and Sels (2008), Sheehan and Cooper (2011), Tremblay et al. (2008), Hasliza and Norbani (2011a), Hasliza and Norbani (2011b), Ordanini and Silvestri(2008),Mahmud et al. (2012) ...
... Mahmud et al. (2012), Klaas et al. (2001), Galanaki (2008), Chiang (2010), Delmotte and Sels (2008) Shih and Chiang (2011), Hasliza and Norbani (2011a), Lever (1997), Ordanini and Silvestri (2008) ...
... Hasliza and Norbani (2011b), Mahmud et al. (2012), Lepak et al. (2004) Foreign ownership A variable to indicate whether a firm is owned by foreign multi-national corporations or local domestic corporations. Chiang et al., (2010); Sheehan and Cooper (2011) Union ...
... , Butler et al. (2010) Degree of outsourcing The client's extent of outsourcing measured by the number of activities outsourced by the client. Delmotte and Sels (2008), Sheehan and Cooper (2011), Tremblay et al. (2008), Hasliza and Norbani (2011a), Hasliza and Norbani (2011b), Ordanini and Silvestri(2008),Mahmud et al. (2012) ...
... Mahmud et al. (2012), Klaas et al. (2001), Galanaki (2008), Chiang (2010), Delmotte and Sels (2008) Shih and Chiang (2011), Hasliza and Norbani (2011a), Lever (1997), Ordanini and Silvestri (2008) ...
... Since proper talent management has been perceived as a solution to Human Resource (HR) challenges (Beechler and Woodward, 2009), selection practices have become imperative functions of Human Resource Management (HRM) in the quest for talents to achieve person-organisation fit (Collins and Clark, 2003;Collins and Smith, 2006;Lado and Wilson, 1994;Mahmud et al., 2012;Van Maanen, 1977). Nowadays, this concern regarding HR Challenges is true when filling most positions in organisations (Dreikurs et al., 2013). ...
The purpose of this paper is to explore how social capital-based selection practices influence talent management (TM) in multinational companies (MNC). To date, little is known about how this relationship fulfills business priorities. The study collected empirical data through in-depth interviews with 12 managers from three telecommunication firms in Bangladesh. Our study found a significant influence of social capital-based selection practices on TM. We found that the relational and cognitive dimensions of social capital were the major drivers of selection practices that influenced a talent search process. Trust and cultural norms especially within networking relationships through shared narratives, codes and language, and vision affected TM involving selection practices. Therefore, the role of existing human resource management (HRM) system for selection practices was found inadequate without the integration of social capital. We report that upper-level managers have the capability to shape and implement a TM system that benefits candidates with network ties of informal social relationships, which consequently marginalized formal HRM practices. HRM system is only an administrative function alongside the dominant social capital-based TM selection practices. For practical implications, upper-level managers used social capital-based selection practices beyond HRM systems that were deemed pragmatic in selecting the right candidates for positions in organizations favoring intra-group homogeneity.
... Training and development of human resources are vital to bridge the gap between current and expected future performance. Training is one of the elements of development described as a kind of activity involved within social networks of people in a planned, systematic way that results in enhancing the level of skill, knowledge and competency to perform the task effectively (Lado & Wilson, 1994;Collins & Clark, 2003;Mahmud et al., 2012;Gordon,1992). Accordingly, Weil and Woodall (2005) argued that social capital to be aligned with HRM functions mainly training and development to make organizations work effectively. In this light, McCourt and Eldridge (2003) claimed that soft HRD functions are socially executed among network ties including training and development. ...
The purpose of this paper is to explore how social capital-based training and development (T&D)
practices enhance leadership competencies in telecommunication organizations. Social capital in the light of key role
as the theoretical lens, this paper has been analyzed and the empirical data was obtained from 12 managers of the
telecommunication organizations selected by purposive sampling technique and via in-depth interviews using semistructured
questions by qualitative design. Through in-depth interviews, we explored direct relationships between
structural, relational and cognitive social capital with training and development which were the basis for facilitating
leadership competencies. Thus, this study provides interesting theoretical findings and practical implication. First,
our findings revealed that social capital with networking relationships within heterogeneous managerial echelons of
organizations largely favours training and development, especially under relational & cognitive dimensions. Second,
social capital perspective immensely supports leadership competencies through the positive influence of training and
development. From a practical viewpoint, organizations by enhancing leadership competencies can create value and
ensure sustainable growth for the firms.
... However, findings regarding a moderating effect of firm size were inconclusive.Lahiri et al (2012)examined how offshore outsourcing service providers' internal and relational resources and capabilities jointly predict their economic performance. Analysis of data collected from a sample of 105 Indian service providers suggested that rent generation from firm specific, idiosyncratic resources is positively moderated by the level of management capability posed by such firms.KhaledMahmud et al (2012)investigated the circumstances where HR outsourcing contribute value to the companies by attempting to identify environmental and organizational characteristics that affect HR department performance and how HR outsourcing mediates that relationship in service organization. They found that companies show maximum satisfaction to improve on service quality due to outsourcing HR functions, but in some extent, it reduced HR effectiveness of human capital management.Halim and Che-Ha (2011) examined the consequence of the organization internalization on the practice of human resource (HR) outsourcing among manufacturing organizations. ...
This study examined the relationship between staff outsourcing and financial performance of Commercial Banks in Delta State. The specific objective was to determine the extent of relationship between staff Outsourcing and financial performance of Commercial Banks in Delta State, Nigeria. One Hundred and Twenty-five (125) employees (branch and operation managers) of Zenith bank, UBA Plc, Diamond Bank, First Bank and GTB were selected using complete enumeration method. Primary data were collected with the aid of structured questionnaire and oral interview while secondary data were collected from annual financial statement of the banks. Hypothesis was formulated to test relationship between independent and dependent variables. Simple Regression and Pearson Product Moment Correlation (using the Statistical Package of Social Sciences (SPSS ®) Version 21) were used to analyze the data. The result from the correlation indicated that two out of the seven indicators of staff outsourcing were significant. The significant variables were focused on core functions and number of sales. Although other factors were not significant but they have relationship with profit before tax. The study concluded that concentration on core function would lead to an increase in profit and vice versa. The researcher recommended that banks could not do every business. Therefore, non-core functions should be outsourced to vendors with good track records and revisit cost components of their business. This will minimize human resource associated cost that is due of scale inefficiency Keywords: Human Resource, Outsourcing, Performance and Delta State. INTRODUCTION 1.1 Background of the Study As competition rages on in the business environment, the demand for increased productivity, profitability with reduced cost and effective performance has forced organizations to scrutinize their operations, redirect and refocus their strategy towards enhancing the competencies of all business processes. The need to improve the competencies of all business process in the face of limited resources has compelled firms to focus on their core competencies and capabilities (Lee and Kim, 2010) and strategically use outside vendors who are specialist to perform service activities that traditionally have been internal functions (Bustinza, et. al. 2010). By outsourcing some of their non-core functions to third-party providers with superior expertise, firms can achieve greater efficiency and effectiveness of their infrastructure and business processes, thereby facilitating the achievement of their strategic operational goals (Gonzalez, Gasco&Llopis 2010). Outsourcing gives firms the opportunity to increase focus on core functions, access world class skills, talents and latest technology, increased speed, greater flexibility, quality improvement, cost savings and reduced capital expenditure. These enhance the competitive edge of a firm over its rivals.
... Although this has not been formally recognized with the mainstream HRM functions of contemporary days. In recent days, organizations have immensely outsourced the security, cleaning, business consultancy, product packaging, labeling, event management, product delivery, transport, logistics services, food supplies, IT supports (Mahmud et al., 2012). In the last two decades the number of headhunting, HR consulting firms in Bangladesh has increased. ...
... The Telecommunication sector of Bangladesh is highly attentive to outsource recruitment-selection functions and if not, they focus on a temporary appointment as minimum options. The similar study found that quality improvement, saving time and money to developing special competency is the root cause of growing outsourcing (Mahmud et al., 2012). ...
... The questionnaire consists of demographic information about organizations and response on uses of HRM outsourcing, reasons for using outsourcing functions, and the relationship of outsourcing functions with the performance of HRM as a whole. The items of questions were designed based on literature reviewed of many researches (Glaister, 2014;Abdul-Halim & Che-Ha, 2010;2011a;2011b;Seth & Sethi, 2011;Maiga & Jacobs, 2004;Chiang & Shih, 2011;Hossain & Islam, 2015;Charles et al., 1999;Mahmud et al., 2012;Lilly et al., 2005;Çiçek & Özer, 2011;Grover et al., 1996). Items are measured on a five-point Likert Scale technique ranging (1= Strongly Disagree, 5=Strongly Agree). ...
Outsourcing becomes a very prominent topic in the new dimension of business across the world. The private sector business in Bangladesh is putting more concentration towards human resources management outsourcing functions to achieve manifold objectives of managing human resources. This study is an attempt to exhibit the current scope of HRM outsourcing functions, reasons for outsourcing and examine the relationship of outsourcing functions with the overall HRM performance of organizations. This research has been conducted based on both primary and secondary sources of data. A total of 115 respondents holding the top and middle positions in the different private organizations in Dhaka city has been selected using purposively to conduct the study. The data have been collected through a structured questionnaire and different statistical techniques such as descriptive statistics, correlation, regression, and ANOVA have been used to analyze the data. The study reveals that human resource outsourcing functions are still at an infant stage in Bangladesh. The study also discloses that there is a strong positive relationship between human resources outsourcing and the overall HRM performance of the organizations.