IMPACT OF HUMAN RESOURCE OUTSOURCING (HRO) ON ORGANIZATIONAL PERFORMANCE

Abstract

In the present business world, one of the trendy business words is „outsourcing‟ that means using another source beyond the organization for completing 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. But 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 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 quantitative dimension, those assumptions were measured using correlation and regression model. 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 method, like questionnaire using Likert scale and as there would-be 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 made an incredible effect for the future analysts. The investigators can pick other piece of HRO for research or can accomplish progressively broad examinations on this theme. For the policy makers this exploration was an achievement. The policymakers can use these findings as a guideline for future policies. Again, vendors can use this paper to make their service more customers oriented as the paper also describe the inadequacy of HRO services in the country.