THE PROSPECT AND CHALLENGES OF OUTSOURCING HUMAN RESOURCES IN THE BANKING INDUSTRY

THE PROSPECT AND CHALLENGES OF OUTSOURCING HUMAN RESOURCES IN THE BANKING INDUSTRY

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

Human resource experts are put to the test in the modern, globally affected, rapidly shifting company environment. Growing enterprises have caused profound and extensive changes in international organizations (Wokoma and Iheriohanma, 2010). Nwokocha and Iheriohanma (2012) claim that recent pressures to remain globally competitive, improvements in information and communication technologies (ICT), and shifting trends in consumer demand for goods and services have compelled companies to adopt new techniques for producing goods and organizing labor. The process of hiring and retaining a large workforce has become more difficult and expensive. Due to this, businesses have had to purposefully cut back on their workforce and outsource the majority of their non-core company functions. Worker assurance, efficiency, and retention issues are predicted to be the most important labor management concern in the near future, according to Adecco (2009). This is especially relevant in view of the current state of economic instability and the negative effects of company outsourcing. Outsourcing is one of the tools that will enable firms to access nearly every asset available in today’s world, where financial institutions fight aggressively. Aalders (2006) defines outsourcing as “the transfer of services, tasks, and maybe their related assets and persons to a specialized service provider.” Bragg (2011) defined outsourcing as the contracting out of a business process to a third party with or without participation in a separate organizational unit. According to Greaver, the most crucial outsourcing focus areas are core operations, cost reductions, access to knowledge, boosting performance, and flexibility (2013). Authorities may concentrate their attention on specific knowledge areas, therefore outsourcing can boost productivity and reduce expenses. So, the goal of this study was to assess the advantages and disadvantages of outsourcing human resources in the banking industry using First Bank Nigeria as an example

STATEMENT OF THE PROBLEM

The desire for banks to adopt International Financial Reporting Standards as a result of new players in the banking sector has intensified competition in Ghana’s banking sector (Bank of Ghana, 2005). Most banks offer the same services under different names. PriceWaterhouseCoopers (2011) emphasized the significance of capitalizing on the weaknesses and utilizing the strengths of the competition in the banking sector. The most dependable manager of opposition inside a corporation is likely human resources. The hiring and retention of a large human resource could have far-reaching effects and, in the worst case, jeopardize corporate objectives. Concerns about privacy and security are common in banking operations. According to Adler (2013), financial service providers are required to keep information that is only available to investment bankers out of the hands of traders, brokers, and other individuals who could try to abuse such insider knowledge. Security bank tellers, drivers, and cleaners are just a few of the HR tasks that Fidelity Bank has outsourced. Banks are increasingly turning to outsourcing as a method to reduce expenses while still achieving strategic goals. Along with lowering overhead and operating costs, it also helps to improve operational performance.Also, the bank might save money on hiring and training costs and experience better speed, service, and efficiency. When outsourcing risk presents itself in a loss of control over some crucial activities, the question is how the bank controls the risks associated with a third-party supplier of outsourced services. To assess the advantages and disadvantages of outsourcing human resources in First Bank Nigeria’s operations was the goal of this study.