The implication of human resource outsourcing in the Banking industry.

In today’s global business environment, firms are increasingly confronted with competition, uptake of trendy technologies and corporate restructuring. These factors requirethem to seek and sustain competitive advantage over their markets by emphasizing on profitability and productivity. Firms embrace outsourcing either wholly or part of their businesses, to reduce cost or increase productivity. Ultimately, which form, shape or scope any business outsourcing will take, it must result in greater benefit to the organization in the short-to-medium term. Althoughdifferent studies have attempted to assess and understand the various reasons for different forms of outsourcing in the banking sectors, no or little study is available in Ghana, which attempt to establish the implication of human resource outsourcing in the banking sector. The researcher sought to determine the level of HR Outsourcing in the banking sector, to determine the organizational strategies behind HR outsourcing in the banking sector and to determine the impact of human resource outsourcing on employee attitudes and performance in the banking sector.An exploratory research designed was adopted for the studywith the population from five outsourced banks operating in Ghana namely, Access Bank, prudential Bank, UT bank, fidelity bank and United Bank of Africa. The management and human resource staff were the focused of the study.A total of one hundred and fifty (150) respondents comprising of senior management and human resource staff from the 5 selected banks that outsource their HR functions formed the sample size; with thirty (30) respondents from each bankthe research tool used for data collection was questionnaires. They were grouped into two sections (A and B): Section A focused on the demographic characteristics of the respondents. Data collected from the banks was captured with codes into statistical software; Statistical Package for Social Sciences (SPSS). The SPSS was used to generate frequency on the set of responses on each question item and presented into tables and charts. This enabled the researcher to arrive at conclusions that moderate level of HR outsourcing being practiced in the banking sector of Ghana. Alsoasorganizations strive to implement outsourcing, most managers have the improvement in customer service as a key strategy for outsourcing. HR outsourcing was recorded as having a positive and significant correlation with productivity. However a negative correlation was found between HR outsourcing and Affective commitment and Job satisfaction in the banking sector.It was identified that the level of productivity is positively affected by the use of HR outsourcing. This means that as organizations outsource some of the HR duties the level of productivity is increased. Hence a thorough benefit analysis should be done to help organizations outsource most of their activitiesthe implementation of HR outsourcing will lead to reduced levels affective commitment and job satisfaction. These may be due to the way the outsourcing was implemented. Therefore. Strategies measures should be put in place before deciding on outsourcing some HR functions in the organizations.in other to minimize the negative effects of outsourcing

Source: KNUST