Business Process Outsourcing Industry
Discuss about the Managing Human Resources in BPO.
The recruitment procedure of a corporation includes different parts such as attracting talented applicants, selecting the right candidate and appointing them according to their qualification.The achievement of a recruitment process depends upon the turnover of employees. In various industries, corporations face different recruitment challenges. Modern organisations face challenges regarding diversity, age gap, employee’s attitude, high expenses, retention and demand of labour. These problems affect the recruitment procedure of a company which adversely influence its development. This report will focus on Business Process Outsourcing (BPO) industry, and the challenges faced by BPO organisations. Further, the report will provide various human resource management strategies to address these issues. The report will also include various theories given by different experts.
Business process outsourcing is a corporate strategy implemented by various organisations; it includes contracting or outsourcing the non-primary corporate actions to third-party corporations. According to Kuruvilla & Ranganathan (2010), the non-primary activities include various secondary tasks such as human resource management, IT department, customer support, payrolls or call center facilities. International organisations outsource their business to countries such as India, Thailand, China or Philippines. There are various reasons for which a corporation outsources their business such as it reduces the cost of operations, professional workforce, better productivity and low-cost employees. As per Caniglia, Ramachandran & Khanna (2005), the BPO industry faces various challenges such as a change in government regulations, the attitude of employees, security breaches, underestimating the expenses or bad reputation.
The companies which provide BPO services face various problems while recruiting new employees. Following are few of the aspects which affect the hiring process of a corporation.
In BPO industry, the rate of development is significantly high, which require firms to hire talented employees. As per Liu & Nagurney (2013), due to the globalisation, the demand for talented employees has raised considerably in past few decades. Every human resource department prefers to hire only the talented employee, but the number of talented employees is low in BPO industry. Most of the BPO organisations are situated in developing countries such as India, Malaysia or Thailand.
The corporations choose these countries because they have a high number of employees who work at lower rates than compared to developed countries. But, most of those employees do not have proper knowledge of working in a BPO industry, due to lack of literacy rates, under development in technology and low economy. To fulfill the demand for skilled employees the supply is not sufficient, therefore, companies are required to pay high salaries to attract talented employees. While recruiting the employees, human resource department faces difficulty in the situation (Whitaker, Mithas & Krishnan 2010).
Challenges in Recruitment Procedure
The reputation of BPO corporations is low in countries such as India because the working hours are high and the pay grade is low. To attract potential talented candidates for recruitment, the companies are requiring maintaining a positive image in between public. Most of the people who are working in BPO industry did not prefer to work in them. Therefore, the number of employee turnover is significantly high in BPO sector (Ghodeswar & Vaidyanathan 2008).
While recruiting new employees, human resource department faces issues regarding diversity and age of candidates. Farndale, Scullion, & Sparrow (2010) provided that the BPO organisation did not prefer to hire elder employees because they did not have the technical knowledge and their productivity is also low. The maximum number of employees in BPO sector is young or adults which reduces the options for HR department because people do not prefer to work for a BPO. In case of gender, the discrimination between male and females is considerably high in BPO sector. There is just 35 percent of women workers in BPO industry and companies. Most of the company did not hire female employees because they have a problem regarding night shift and other family issues.
Most of the BPO companies are present in Asian countries such as India, China, and Malaysia. According to Mehta, Armenakis, Mehta & Irani (2006), these countries are facing issues relating to illiteracy and poor quality of education. A worker who works in BPO companies does not possess basic skills such as operating a computer or speaking English. The degrees provided by candidates are usually not authentic, their skills do not match with their qualifications, and they failed to understand most of the tactics and strategies made by top level management. Unskilled labour creates various kinds of problems for an organisation and their human resource department. Human resource department has to put more efforts in hiring an appropriate candidate; they have to make a lengthy selection prices in order to hire a correct candidate.
BPO industry has seen remarkable in past few decades and growth opportunity for an employee is significantly high in this sector. Lacity, Solomon, Yan & Willcocks (2011) provided that growth opportunity for an employee is considerably high therefore employees prefer to switch to other companies for better benefits. Manu domestic firms are incorporating every day in countries like India. They have the capability to poach employees from successful enterprises that create continuous challenges for human resource department of an enterprise.
Recommendations
In BPO industry, there is the significantly high rate of employee’s turnover. As per Schweyer (2010), most of the organisations failed to retain their employees due to several reasons and every month BPO corporation’s faces absenteeism of workers around 10 percent. The employees usually change their companies to get better incentives or salaries, most of the talented employees get high salary offers from competitive companies. Organisations are required to provide better benefits and salary packages to their employees for retaining them in the company. The success of recruitment procedure depends upon the retention of employees which is difficult to achieve by the human resource department (Nadkarni & Hermann 2010).
There are various human resource management policies that can implement by the BPO corporations to address the challenges faced by their human resource department in recruitment procedure. Following are few of such strategies which assist the organisations in improving their recruitment procedure.
To address the issues regarding fulfillment of talented employees’ demands, corporations can implement organisational training strategy. As per Halvey & Melby (2007), training in the organisational environment is a business strategy that is adopted by companies to face the challenge of lack of talented employees. BPO companies have the option of providing on the job or off job training to their employees. Training strategy can also assist in filling up the age gab in BPO sector. By providing proper training, BPO corporations can hire employees of old age as well.
Williamson (2008) provided that before providing training to their employees, the company should prepare a contract between the employee and the corporation which forces an employee to work for a certain time in the organisation after receiving the training. This strategy will assist corporations in reducing their employee’s turnover rates. The BPO enterprises can improve their organisational image in public by providing training facility to their employees.
Diversity issues and negative culture is one of the main reasons for bad recruitment procedure of a BPO company. As per Handley & Benton (2009), the corporations should implement strict regulations regarding a cooperative work culture which makes diversity an integral part of the business. The top-level management should promote a diverse culture in the organisation by establishing various policies regarding employee’s behaviour. The company should provide cab facility, accommodations, and security services to female workers to increase the number of female employees in BPO sector.
The corporations should establish different programs to appoint older employees in the company. The organisational environment should be positive which will attract talented employees in the enterprise. After recruiting similarly qualified employees, both employees should receive similar growth opportunities. The management should punish workers for discriminating the employees based on their caste, religion, age or gender. After implementing such strategies, human resource management can leverage them to attract talented employees (Mani, Barua & Whinston 2006).
BPO sector mostly consists of low or medium level employees which can be attracted by efficient incentive schemes. Bhatnager (2007) provided that the pay grade in BPO industry is considerably low which causes problems for human resource management in recruitment procedure. Most people do not prefer to work for BPO sector due to its low pay grade and minimum incentive. For attracting talented and skilled employees, the companies should provide better benefit packages their employees. The corporations should also provide better growth opportunities to candidates who will motivate them in joining the corporations. High salary packages and better incentive schemes can improve the retention rate of employees in the organisation (Budhwar, Luthar, & Bhatnagar 2006).
Conclusion
In conclusion, there are various factors in BPO industry which adversely affects the recruitment procedure of an organisation. The human resource department faces challenges such as the low supply of talented employees, negative image of BPO sector, diversity challenges, completion between companies and unqualified workers. A poor recruitment process can adversely influence the development of a corporation. To address such changes, businesses can implement various human resource managers’ policies. The organisation can provide training to their employees who will improve their skill and productivity. The diversity issues can be addressed by establishing strict regulations regarding discrimination against female workers. By proving better salary packages and incentives, a corporation can improve their retention rates. BPO enterprises should implement these strategies to improve their recruitment process and sustain their future growth.
References
Bhatnagar, J. (2007). Talent management strategy of employee engagement in Indian ITES employees: key to retention. Employee relations, 29(6), 640-663.
Budhwar, P. S., Luthar, H. K., & Bhatnagar, J. (2006). The dynamics of HRM systems in Indian BPO firms. Journal of Labor Research, 27(3), 339.
Caniglia, J., Ramachandran, K., & Khanna, V. (2005). U.S. Patent Application No. 11/159,819.
Farndale, E., Scullion, H., & Sparrow, P. (2010). The role of the corporate HR function in global talent management. Journal of world business, 45(2), 161-168.
Ghodeswar, B., & Vaidyanathan, J. (2008). Business process outsourcing: an approach to gain access to world-class capabilities. Business process management journal, 14(1), 23-38.
Halvey, J. K., & Melby, B. M. (2007). Business process outsourcing: Process, strategies, and contracts. John Wiley & Sons.
Handley, S. M., & Benton, W. C. (2009). Unlocking the business outsourcing process model. Journal of operations management, 27(5), 344-361.
Kuruvilla, S., & Ranganathan, A. (2010). Globalisation and outsourcing: confronting new human resource challenges in India’s business process outsourcing industry. Industrial Relations Journal, 41(2), 136-153.
Lacity, M. C., Solomon, S., Yan, A., & Willcocks, L. P. (2011). Business process outsourcing studies: a critical review and research directions. Journal of information technology, 26(4), 221-258.
Liu, Z., & Nagurney, A. (2013). Supply chain networks with global outsourcing and quick-response production under demand and cost uncertainty. Annals of Operations Research, 208(1), 251-289.
Mani, D., Barua, A., & Whinston, A. B. (2006). Successfully governing business process outsourcing relationships. MIS Quarterly Executive, 5(1).
Mehta, A., Armenakis, A., Mehta, N., & Irani, F. (2006). Challenges and opportunities of business process outsourcing in India. Journal of Labor Research, 27(3), 323-338.
Nadkarni, S., & Herrmann, P. O. L. (2010). CEO personality, strategic flexibility, and firm performance: The case of the Indian business process outsourcing industry. Academy of Management Journal, 53(5), 1050-1073.
Schweyer, A. (2010). Talent management systems: Best practices in technology solutions for recruitment, retention and workforce planning. John Wiley & Sons.
Whitaker, J., Mithas, S., & Krishnan, M. S. (2010). Organizational learning and capabilities for onshore and offshore business process outsourcing. Journal of Management Information Systems, 27(3), 11-42.
Williamson, O. E. (2008). Outsourcing: Transaction cost economics and supply chain management. Journal of supply chain management, 44(2), 5-16.
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