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). 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 high-quality human resources (HRM). 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.


Around 80%-92% of Asian corporate enterprises have begun to exhibit evidence of expanding trends in outsource HRM operations.



Key Elements

1. Payroll management, benefits, recruiting, selection, and training & development are all examples of human resource management practices that are outsourced.


2. Employee recruiting and onboarding  tasks are frequently outsourced by human resource departments.


3. Outsourcing HR allows a firm to complete tasks at a lower cost and in a more effective manner.


 HRM Outsourcing Study


In the early 1990s, HRM outsourcing gained widespread acceptance in the United States and Western Europe, with 90 percent of companies outsourcing certain HRM performance operations. In a survey conducted by the American Association between 1994 and 1996, it was discovered that 77 percent of companies outsourced part of their HR functions, up from 60 percent in 1994. In 1997, it was stated that 700 businesses (or 53% of all businesses) expected to outsource HR further in the future (Charles et al. 2012). As a result, HRM 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 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.



Note: The number of HR consulting businesses in Bangladesh has risen. Despite the lack of a precise database, the number of HR consultancy businesses increased to 20 from 2005 to 2020. 


List Of Companies That Provide HRM 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. Only the relevant outsourcing functions performed by enterprises within the research field are listed in the appendix section, which includes the names of firms and services.



Name of HRM functions 

Number of firms

Total Firms

Percentage

Recruitment & Selections 

32

30

88%

Training & Development

34

30

95%

Performance Management

18

30

65%

HR Services & Payroll Management 

16

30

76%

 

 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 onboarding service provider businesses exclusively manage the database, calculate the salary for each kind of employment (permanent, daily, contractual), and submit the statement to the sourcing company's accounts department to certify the disbursement.



Types Of Services

Organization

Frequency 

Percentage

Recruitment & Selections 

120

70

65%

Training & Development

125

60

60%

Performance Management

125

60

60%

HR Services & Payroll Management 

105

95

85%


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 attendance figures as part of these services.

Salary is paid in two ways: client businesses pay the compensation and service providers pay the salary. 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 well-organized. As a result, corporate Bangladesh should focus on strengthening its core business while outsourcing non-essential operations to a third party to ensure increased productivity at lower costs (S Alam, 2021). HR outsourcing is becoming increasingly popular in Bangladesh. We have the top class payroll management and HR management services within 14th years experience. 


Reasons

Strongly Disagree

Neutral

Strongly Agree

Quick Response

13%

7%

55%

Cost Optimization

15%

5%

65%

Ensure Confidentiality

9%

9%

75%

Free from Hassle

16%

11%

55%

Improved Compliance

14%

7%

68%

Technological advancement

8%

10%

50%

Improve functional accuracy

10%

14%

76%

Free From bias 

14%

8%

825


Table: 3- Reason for HRM performance


Table 3 shows that the sample firms had a variety of reasons for outsourcing HRM performance, which varied by type, size, operational volume, and 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 increasing functional correctness.



Future Research Directions


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 HRM 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 outsourcing may be a smart option for improving corporate HRM performance. Outsourcing is touted as among the most significant trends in human resource management.


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


References:


1. Human resource management Charles R. Greer, Stuart A. Youngblood and David A Giay (2012).

Human resource management The make or purchase decision in human resource management outsourcing, Institute of Management Executive, 13 (3).


2. Noor H.A., Hasliza Abdul-Halim, Elaine Ee, T. Ramayah, and Hasliza Abdul-Halim (2014). Partnerships and Service Quality are Key to Human Resource Outsourcing Success.


3. M. A. Akkas (2016). HRM Practices in Bangladesh, A.S Publishing, A.S Publishing, A.S Publishing, A.S Publishing, A.S Publishing, A.S Publishing, A.S Publishing, A.S


4. H. A. Halim and N. Che-Ha (2011a). Does organizational size and emotional maturity influence when it comes to HR outsourcing? Article In the journal of Business and Finance is a publication dedicated to the study of business and finance