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

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

In today's rapidly changing business competitive climate, which is influenced by globalization, human resource professionals are put to the test. There have been massive and comprehensive changes in global organizations as a result of growing companies (Wokoma and Iheriohanma, 2010). According to Nwokocha and Iheriohanma (2012), recent demands in worldwide competitiveness, advancements in information and communication technologies (ICT), and changing patterns in consumer needs for products and services have forced businesses to adopt new methods of production and work organization. Recruiting and keeping a big workforce has grown more complex and expensive. This has necessitated companies deliberately reducing the number of their staff and outsourcing the majority of their non-core business activities. According to Adecco (2009), worker assurance, efficiency, and retention problems are emerging as the most pressing challenge for labor management in the near future. This is particularly true in light of current economic uncertainty and the consequences of business downsizing, as shown in outsourcing. In today's world, where financial institutions compete fiercely, outsourcing is one of the tools that will allow businesses to get access to almost every asset available. Outsourcing, according to Aalders (2006), is "the transfer of services, tasks, and potentially their associated assets and personnel to a specialized service provider." Outsourcing, according to Bragg (2011), is the contracting out of a business process to a third-party, either with or without involvement in a distinct organizational unit. Core operations, cost savings, access to expertise, improving performance, and flexibility are the most important focus areas of outsourcing, according to Greaver (2013). Because authorities may focus their efforts on particular areas of expertise, outsourcing can increase efficiency and save costs. As a result, the purpose of this study was to evaluate the benefits and drawbacks of outsourcing human resources in the banking sector using the example of First Bank Nigeria.

1.2 Statement of research problem

New entries into the banking sector have led in an increase in demand for banks to implement International Financial Reporting Standards, resulting in increased competitiveness in Ghana's banking industry (Bank of Ghana, 2005). The majority of banks provide the same goods under various names. PriceWaterhouseCoopers (2011) highlighted the importance of exploiting the competition's vulnerabilities and leveraging their strengths in the banking industry. Human resources is arguably an organization's most reliable manager of resistance. Recruiting and retaining a big human resource may have far-reaching consequences and, in the worst-case scenario, endanger corporate goals. Banking operations are fraught with security and privacy concerns. Financial service providers are obliged, according to Adler (2013), to keep information known to investment bankers away from traders, brokers, and other people who may try to misuse such insider knowledge. Some of Fidelity Bank's HR functions, such as security bank tellers, drivers, and cleaners, have been outsourced. Outsourcing is becoming more popular among banks as a way to save costs while still accomplishing strategic objectives. It also aids in the enhancement of operational performance, as well as the reduction of overhead and operating expenses. The bank may also benefit from lower personnel and training expenses, as well as improved speed, service, and efficiency. The issue is how the bank manages the risks connected with a third-party provider of outsourced services, since outsourcing risk manifests itself in a loss of control over certain critical activities. This is why the purpose of this study was to evaluate the benefits and drawbacks of outsourcing human resources in First Bank Nigeria's operations.

1.3 Objectives of the study

The primary objective of the study is as follows

1. To find out the strategies adopted by First Bank Nigeria in outsourcing its human resource activities.

2. To assess the prospects of outsourcing of human resource to First Bank Nigeria

3. To assess the risks and /or challenges associated with outsourcing of human resource to First Bank Nigeria

4. To assess the role outsourcing plays in the performance of First Bank Nigeria

1.4 Research Questions

1.     What are the strategies adopted by First Bank Nigeria in outsourcing its human resource activities?

2.     What are the prospects of outsourcing of human resource to First Bank Nigeria?

3.     What are the risks and /or challenges associated with outsourcing of human resource to First Bank Nigeria

4.     What are the roles of outsourcing plays in the performance of First Bank Nigeria?

1.5 Significance of the study

The significance of this study cannot be underestimated as:

l  This study will examine the prospect and challenges of outsourcing human resources in the banking industry

l  The findings of this research work will undoubtedly provide the much needed information to government organizations,  education board and academia.

1.6 Scope of the study

This study examines the prospect and challenges of outsourcing human resources in the banking industry. hence, this study will be delimited to first bank Nigeria  state Abuja

1.7 Limitations of the study

This study was constrained by a number of factors which are as follows:

 just like any other research, ranging from unavailability of needed accurate materials on the topic under study, inability to get data

Financial constraint , was faced by  the researcher ,in getting relevant materials  and  in printing and collation of questionnaires

Time factor: time factor pose another constraint since having to shuttle between writing of the research and also engaging in other academic work making it uneasy for the researcher

1.8 Operational definition of terms

Challenges: a call to someone to participate in a competitive situation or fight to decide who is superior in terms of ability or strength.

Human resource: the personnel of a business or organization, regarded as a significant asset in terms of skills and abilities.