Human Resources Outsourcing in Bangladesh: An Extensive Survey

Why Is HRM Performance Increasing Day By Day In Bangladesh?

Bangladesh has a workforce of 60.80 million people working in various fields.Bangladeshi Labor Force Survey (Bangladesh Workforce Survey, 2019). Afterward there has been a scarcity of human resources with the required skill set for the position. Human resource management requires the provision of appropriate and later high-quality human resources (HRM). As well as a support staff role, the owner’s initial goal is to lower total administrative and operational costs by optimizing the costs connected with it. As a result, HRM outsourcing is originally viewed as a cost-cutting strategy.

HRM Outsourcing Study

In the early 1990s, HRM outsourcing gained widespread acceptance in the United States and Western Europe, with 90 percent of companies HR outsourcing certain HRM performance operations. In a survey conducted by the American Association between 1994 and 1996, similarly it was discovered that 77 percent of companies outsourced part of their HR functions, up from 60 percent in 1994. According to Charles et al. (2012), 700 enterprises (or 53% of all businesses) intended to outsource HR further in the future.. As a result, HR outsourcing has been a popular notion in several nations during the previous few decades. The majority of South Asian nations have already begun to use human resource management so HR outsourcing services to meet specific needs and expectations (Talent2011).In Malaysia, HRM performance is outsourced by 40% of service and manufacturing enterprises, with major corporations focusing more on it.

List Of Companies That Provide HR Outsourcing Services In Bangladesh

There were just five (5) HR consulting businesses in 2005, but that number expanded to twenty (20) by 2020, when this study was completed. Moreover the relevant HR outsourcing functions performed by enterprises within the research field are listed in the appendix section. Which includes the names of firms and even so services.

Table 1: HRM functions are outsourced by company

Table 1 shows the companies that provide human resource management services in each category.The HR employee recruiting and also onboarding service provider businesses exclusively manage the database, calculate the salary for each kind of employment (permanent, daily, contractual). Further submit the statement to the sourcing company’s accounts department to certify the disbursement.

Table 2: Types of Services taken by the organizations

Table 2 shows that the majority of businesses outsource HR and Payroll management. The client company provides the service provider with salary and payroll databases, allowances, deductions, and leave and also attendance figures as part of these services.

Salary is paid in two ways: client businesses pay the compensation and also service providers pay the salary. Generally, the sourcing organization used the inside human resources department or the CEO of the business to set an interim or annual requirement on the service providers in the recruiting and selection function. Job posting, CV screening, and interviewing, as well as background checks, are all part of the recruitment and selection process.

The Reasons For Outsourcing HRM Functions

Bangladesh’s economy is gradually becoming more connected with the global economy as a result of trade liberalization. As a result, the corporate sector in the country is experiencing stiff competition. To survive in a highly competitive world, domestic businesses must become more cost-effective and at least well-organized. As a result, corporate Bangladesh should focus on strengthening its core business while HR outsourcing non-essential operations to a third party to ensure increased productivity at lower costs (S Alam, 2021). Accordingly HR outsourcing is becoming increasingly popular in Bangladesh. Especially, we have the top class payroll management and HR management services within 14th years experience. 

Table: 3- Reason for HRM performance

Table 3 shows that the sample firms had a variety of reasons for HR outsourcing HRM performance, which varied by type, size, operational volume, and also the number of HR staff. There are several causes for this: A main focus is on lowering overhead costs, relieving the organization of the burden of manual labor, enhancing policy and procedure compliance, and also increasing functional correctness.

Future Research Directions

Therefore, this research is not without limitations. Because of the volume and years of work experience of the examined businesses, the conclusions should not be generalized. As a result, it would be preferable if future study was undertaken on organizations of all sizes and years of creation. Furthermore, organizational features and environmental variables may be examined to see how they influence companies’ decisions to outsource HR operations. The reasons for HR outsourcing in this study can be investigated further to determine the most important reason(s) for HRO.

Conclusion

Due to differences in philosophy and cultural approach, HRM functions really aren’t comparable in Bangladesh yet the developing trends and popularity of human resource management practices is commendable. To some extent, HRM performance HR outsourcing may be a smart option for improving corporate HRM performance. HR Outsourcing is touted as among the most significant trends in human resource management.

Professionalism is required of both the outsourced recipient and the HR outsourcing provider. We have the most professional team which is ready to manage you Hr and payroll problems.