Enhancing Organizational Performance through Human Resource Outsourcing in the Nigerian Deposit Money Banks

Abstract

As competition rages on in the business environment, the demand for increased productivity, profitability with reduced cost and effective performance has put organizations under pressure to redirect their strategy towards outsourcing in order to develop and focus on their core competencies. The broad objective of this study is to examine the effect of Human Resources Outsourcing on organizational performance in Deposit Money Banks. The study made use of a sample of 260 staff from 10 money deposit banks in the Asaba metropolis of Delta State, Nigeria. The research instrument was a 25-item validated structured questionnaire of the likert type scale. A cross-sectional survey research design method was adopted, and the statistical techniques used are principle component factor analysis, correlation and multiple regression analysis. The findings showed that that there is a significant positive relationship between the variables of human resource outsourcing and organizational performance. This implies that its effect on organizational performance such as cost savings and productivity is as a result of outsourcing activities. The study therefore concludes that recruitment process outsourcing has significant relationship with organizational performance by moving the recruitment process to a recruitment agency, time is saved by the managers for more efficient planning. There is a need to adopt effective strategies when outsourcing recruitment process because human resource is the most vital asset of any organization. The study therefore recommends that Deposit Money Banks should engage in Human resource (HR) outsourcing practices, in order to get access to expert services as well as to take advantage of the excellent quality that external vendors provide and focus on their core competencies.