Business Process Outsourcing Analysis

This assignment delves into the multifaceted world of business process outsourcing (BPO). It explores the potential benefits and risks associated with BPO for organizations, examining its implications for international business strategies and management practices. The analysis draws upon a selection of scholarly articles that shed light on different facets of BPO, such as governance models, location decisions, and the impact on firm performance.

Running head: RECRUITMENT CHALLENGES
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Managing Human Resources

RECRUITMENT CHALLENGES 1
Executive Summary
Modern organisation prefers to outsource their work to BPO companies due to its
several benefits such as reduction in operating expenses, the expertise of workers,
improvement of customer services and better focus on the primary task. But, the growth of
BPO sectors has created various challenges for the companies, one of which includes
recruitment procedure. There are numerous internal and external causes which adversely
influence the hiring process of BPO corporations such as a negative image of BPO sector,
high demand of skilled workers, diversity and age gap issues, low salary packages, and
intense competition between companies. These factors reduce the quality of talented
employees and increase the employee’s turnover rate in the organisation.
To address these issues, the BPO enterprises can adopt various strategies of human
resource management. The companies can provide better salary and incentive packages to
attract talented candidates for the recruitment procedure. By providing organisational
training, the demand for recruiting talented employees can be solved by the corporation. The
policies regarding diversity and positive working environment can be established to avoid
any discrimination between employees. These strategies can benefit the human resource
department in recruitment procure and assist the company in retaining talented employees.

RECRUITMENT CHALLENGES 2
Contents
Introduction................................................................................................................................3
Business Process Outsourcing....................................................................................................4
Recruitment Procedure Challenges............................................................................................4
Negative Organisational Image..............................................................................................4
Diversity and Discrimination Issues......................................................................................4
Age Gap.................................................................................................................................5
Demand/Supply......................................................................................................................5
High Competition...................................................................................................................5
Unqualified Employees..........................................................................................................6
Recommendations......................................................................................................................6
Organisational Training Strategy...........................................................................................6
Better Salary and Incentive Packages....................................................................................7
Diversity Culture....................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

RECRUITMENT CHALLENGES 3
Introduction
The recruitment procedure is one the most critical process for an organisational
development. The process includes several steps such as attracting the candidates, analysing
their qualification and capabilities, selecting the right applicant and appointing them to the
right post. This process benefits the company by choosing the right candidate for the right job
which augments the growth of a company. In modern times, the human resource department
faces various challenges which negatively influence the recruitment procedure.
There are different factors which affect various aspects of a recruitment procedure
such as negative organisational image affect attracting process, and unqualified candidate
makes it difficult to select the right person for right job. This report will focus on the business
process outsourcing industry and its various factors that negatively influence their
recruitment procedure. Further, the report will analyse the situation and provide different
strategies based upon human resource principles that can improve the recruitment procedure
of a company.

RECRUITMENT CHALLENGES 4
Business Process Outsourcing
Many corporations contract with third-party companies to transfer or outsource their
business activities, which are known as business process outsourcing or BPO. As per
Caniglia, Ramachandran & Khanna (2005), the modernisation of technology and
globalisation assist in the growth of BPO industry. The BPO industry provides a large
number of employment to people. The growth of BPO industry in Asian countries is
remarkable due to a high number of populations in countries such as India, China, and
Thailand. The advantages of outsourcing a business activity include reduction of expenses,
skilled workforce, and better focus on primary activities. But, along with merits, there are
several drawbacks of outsourcing as well such as lack of information security, unpredictable
government policies, change in the attitude of employees, and underestimation of expenses
(Nadkarni & Herrmann 2010).
Recruitment Procedure Challenges
The human resource department of BPO enterprises faces different problems which
recurring new employees. Following are several factors in BPO industry which negatively
affects the recruitment process.
Negative Organisational Image
The first step of the recruitment process is attracting the talented candidates for the
recruitment procedure of the company. Ghodeswar & Vaidyanathan (2008) provided that the
human resource department faces different challenges in attracting talented employees
because of the negative organisational image of the enterprise. In most countries such as
China and India, BPO sectors did not have a positive reputation in between people. This
industry employs a large number of people, but mostly the employee’s work on low payrolls
and high working hours. The organisational environment in a BPO company usually includes
late working hours, low basic pay, sexism, and discrimination based on religion. The growth
opportunities in BPO sector are low for the employees. Many people quit their job as soon as
possible if they get a better opportunity in other companies.
Diversity and Discrimination Issues
Most of the BPO companies prefer to hire candidates from some locations because
they perform their job at a low salary package. According to Doh (2005), most of the BPO

RECRUITMENT CHALLENGES 5
companies did not have any regulations regarding discrimination conducted by employees
based on religion. The corporations face considerably high problems of diversity throughout
BPO industry. The rate of female employees in BPO industry is below 35 percent.
Organisations did not prefer to hire female employees because of late working shifts and
sexual harassment cases in the workplace. The company did not strictly implement the
policies regarding female employees which eventually force them to quit their jobs
(Mahmoodzadeh, Jalalinia & Nekui Yazdi 2009).
Age Gap
As per Mehta, Armenakis, Mehta & Irani (2006), the age gap between the employees
in BPO sector is significantly high. The maximum number of BPO works comes under the
age group of 23 to 40. The companies did not prefer to hire aged employees because they
lack technical knowledge. Most of the elder employees are not good with technologies, and
their productivity is considerably lower than young people. Therefore, BPO companies did
not prefer to hire them.
Demand/Supply
Modernisation and globalisation have positively influenced the growth of BPO
industry, in past few decades. Whitaker, Mithas & Krishnan (2010) provided that a large
number of organisations are using facilities of outsourcing to reduce their costs and improve
their quality of services. Due to this development, the demand for talented employees has
proliferated in BPO sector. Most of the employees in BPO industry do not possess proper
skills of operating a computer or English proficiency. This creates problems for human
resource department because it became tough for them to find the talented employees and
retain them in the organisation. The supply of talented employees is not enough to satisfy the
demand in BPO industry, and it is growing in at a fast pace (Narayanan, Jayaraman, Luo &
Swaminathan 2011).
High Competition
BPO industry has grown rapidity in past few decades and it still one of the fastest
growing industry. As per Lacity, Solomon, Yan & Willcocks (2011), daily new local
companies are starting their BPO business which increases the number of competitors in the
market. Along with the competition, the demand for talented employees has grown as well.
Organisations are competing with each other to attract and retain talented employees. Many
companies offer high salary packages and incentive to other corporations’ employees, in

RECRUITMENT CHALLENGES 6
order to employ them. Due to high competition, the talented employees have raised their
demands which make the procedure of recruitment difficult for the human resource
department.
Unqualified Employees
In BPO sector, the requirement for employees includes English proficiency, basic
computer knowledge, and service orientation. Most of the people in developing countries did
not possess these qualifications. The degrees provided by candidates did not prove their
qualifications because many applicants use fake degrees. Human resource department faces
difficulty in analysing the qualification of candidates, and it also takes a long time
(Bharadwaj, Saxena & Halemane 2010).
Recommendations
The human resource department of BPO corporations can adopt various strategies to
address the challenges faced by them in recruitment procedure. Following are few of the
examples of such strategies.
Organisational Training Strategy
BPO companies can adopt an organisational training strategy to improve their
recruitment and retention procedure. According to Halvey & Melby (2007), the demand for
talented and skillful employees is high in BPO sector, but the supply is considerably low. To
address this issue, corporations can provide training to their employees who can improve
their productivity and knowledge. The company can also provide training to new employees
to give them a better understanding of their work. The company can establish a lock-in period
for the employees who were given training by the organisation, so they did not leave the
corporation right after completing their training. Training can benefit human resource
department in fulfilling their demand of recruiting talented employees (Rai, Keil, Hornyak &
WuLlenweber 2012).
This strategy also benefits human resource department in filling up the age gap
between the employees. Most companies did not hire aged employees due to their lack of
technical knowledge and productivity. By providing them on the job training, human resource
department can employ them in the workplace. Trained employees are also easier to manage
which benefit the company by maintains a positive work environment (Graf & Mudambi
2005).

RECRUITMENT CHALLENGES 7
Better Salary and Incentive Packages
Most people did not prefer to work in BPO sector is because the companies did not
provide better salary packages to their employees. Mani, Barua & Whinston (2006) provided
that the incentives and bonus schemes of BPO corporations are not according to the long
working hours. To address this issue, companies should establish better policies regarding
salary packages. Better salary packages attract talented employees which is beneficial for the
organisation. The organisation can establish an incentive policy according to the performance
of employees; this strategy will motive employees in improving their productivity and also
solves the retention issues of BPO corporations.
Diversity Culture
The top-level management of BPO corporations should implement an efficient
workplace culture which must be followed by the employees. As per Conklin (2005), the
human resource department did not receive talented candidates in recruitment procedure
because of the negative work culture in BPO sectors. By implementing proper diversity
regulations and cooperative policies, the BPO corporations can improve their working
environment. The human resource department should also promote the hiring of employees
with different cultural backgrounds which promotes the diversity in the company.
Human resource department should not discriminate against candidates based on their
age, gender, caste or religion. The female employees should receive similar salary packages
and opportunities as compared to male workers. The positive work environment will improve
the organisations image of BPO corporations which can benefit the human resource
department in recruitment procedure. Most talented employees would prefer to work for the
organisation with positive culture than high pay grade (Handley & Benton 2009).

RECRUITMENT CHALLENGES 8
Conclusion
From the above report, it can be concluded that the human resource department in
BPO sector faces various problems in the recruitment procedure. There are several internal
and external factors which affect the quality and effectiveness of the recruitment process. The
factors which affect the recruitment procedure include bad reputation of BPO corporations,
the rapid increase in competition, unqualified employees, lack of diverse culture and low
salary packages. To address these issues, there are various policies that a company can
implement to improve the recruitment procedure. To attract talented candidates in the
recruitment process, the company should establish better diversity policies and provide higher
salary packages to employees. The retention of employees can be improved by the
establishing positive work environment and stabling performance-based incentive scheme.
The demand for talented employees and age gap issues can be fulfilled by establishing an
organisations training facility. These strategies can improve recruitment procedure of a BPO
company and sustain their development.

RECRUITMENT CHALLENGES 9
References
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relationship in business process outsourcing: an exploratory study. European Journal
of Information Systems, 19(2), 168-180.
Caniglia, J., Ramachandran, K., & Khanna, V. (2005). U.S. Patent Application No.
11/159,819.
Conklin, D. W. (2005). Risks and rewards in HR business process outsourcing. Long Range
Planning, 38(6), 579-598.
Doh, J. P. (2005). Offshore outsourcing: Implications for international business and strategic
management theory and practice. Journal of Management Studies, 42(3), 695-704.
Ghodeswar, B., & Vaidyanathan, J. (2008). Business process outsourcing: an approach to
gain access to world-class capabilities. Business process management journal, 14(1),
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Graf, M., & Mudambi, S. M. (2005). The outsourcing of IT-enabled business processes: A
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Mahmoodzadeh, E., Jalalinia, S., & Nekui Yazdi, F. (2009). A business process outsourcing
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RECRUITMENT CHALLENGES 10
Mani, D., Barua, A., & Whinston, A. B. (2006). Successfully governing business process
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