Mastering Management
HR outsourcing for a competitive edge
The Bangladesh economy is increasingly being integrated with the global economy because of trade liberalisation. Hence, the country’s corporate sector is facing cut-throat competition. They need to be more cost-effective and efficient to survive in a highly competitive world.
Corporate Bangladesh, therefore, should emphasise developing its core business and outsource its non-core activities to a third party, as it will ensure better productivity at minimum costs, say management experts.
“In today’s competitive world, the objective of any company is to give better and innovative products and services to customers at competitive prices,” says Asif Zaman, director of human resources of Huawei Technologies (Bangladesh) Ltd, a leading telecommunications vendor in Bangladesh.
If companies focus and invest in its core business and outsource its non-core activities to a third party, they can leverage the expertise of the third party, who can give better services at cost effective rates, says Zaman.
He says this will result in increased overall efficiency and profitability of the company. These will create a win-win situation for both the company and its customers and stakeholders.
Dilruba Sharmin Khan, head of organisational development at United Commercial Bank Ltd, says, “Usually an organisation wants to avoid distractions from its non-core activities. So they go for outsourcing to reduce costs and enhance efficiency.”
HR outsourcing can be classified into partial or full scales. In partial outsourcing, a client’s selected HR functions, such as employee customer service, compensation and benefits, recruitment, learning, payroll, and HR administration, are managed by an outsourced company. In end-to-end or full scale outsourcing, all of a client’s HR functions are managed by an outsourced company.
M Zulfiquar Hussain, chief executive officer of Grow n Excel, a leading human resources and management consulting firm in Bangladesh, says, “Large organisations usually prefer partial outsourcing by handing over one or a number of tasks under each function to a capable outsourced company, as they want to retain control over HR strategy.”
However, the areas of outsourcing can be extended to other functions based on experience and progress, he adds.
Hussain, who is also the lead consultant of the organisation, says, “In recent times, a good number of call centres, IT companies, medium-sized financial organisations and local corporates have flourished in the country.”
These small- and medium-sized companies can take on end-to-end HR outsourcing services to ensure the right focus on business growth and manage and develop human resources effectively, says Hussain.
The director of Huawei, who worked for Paxar (Bangladesh) Ltd, ACME Group and DHL Bangladesh, says, “In 2011, in most countries all over the world, an HR outsourcing strategy is widely used and it is now an established business norm.”
Dilruba, who has over 15 years of experience in HR, says, “HR outsourcing is somewhat like Hebrew to us, as we are still fighting to establish HR after erasing the personnel department. For some, these are still trial and error based project initiatives.”
She says the “routine admin functions” may be outsourced to third parties with “service contracts”.
For example, ‘Payroll Management’ can be outsourced to a third party in the form of regional shared service centres for multinationals. And for a local group of companies, it may be outsourced to third party. In both cases, it would result in saving HR costs and increasing HR efficiency, she adds.
Whether an organisation will outsource its HR non-core activities or not, will typically depend on the necessity of the organisation. The decision to outsource or to continue in-house should be based on logic. Otherwise, HR outsourcing can work as a windfall or a curse, says Dilruba.
She says both the receiver and supplier of outsourcing need to be professional. The outsource service provider has to adopt the most advantageous steps to create brand image, long term visions about their business and compliance issues.
Courtesy of The Daily Star
