Abstract

The main trust of this study was to investigate the impact of outsourcing of human resourcing on organisational performance, the case of MTN, Douala, Cameroon. Three research objectives were formulated to guide and direct this study. Ex-post factor research design was used for this study. A well validated structured questionnaire was on a sample of 116 respondents. Data collected were analysed using descriptive statistics of simple percentages and inferential statistics of multiple regression statistical technique. Findings revealed that there exist a significant impact of training outsourcing and employee performance and there exist a significant impact of recruitment outsourcing and performance of employees. The study recommended that MTN should be cautious when dealing with the issue of recruitment outsourcing in order to further improve employee engagement. Particularly, the organization should outsource such services that the organization has no capacity to provide or wants to save on costs. Such may be advertisement. The screening process and more so conducting interviews and selection procedures should be carried out by the organization in order to create contact with candidates hence enhance employee engagement. Also, Training is fundamental for acquiring necessary skills and also making vital and informed decisions in an organization. Inadequate training is likely to result to honest mistakes which can be costly to the organization. It is, therefore, recommended that MTN ought to conduct training in-house in order to address the employee training needs as articulated. The firm may outsource the service if it has no capacity to do so but should prioritize contracting of top-notch outsourcing firms that understand the training needs and have the necessary expertise in order to ensure than employees acquire necessary and adequate skills and knowledge to perform certain tasks within the organization.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Outsourcing has been utilized for quite a long time, but much of the outsourcing until the late 1990s was focused on informational technology outsourcing. The objective then was often largely restricted to achieving operational efficiencies. In the past, the world has witnessed a remarkably rapid growth in Business Process Outsourcing (BPO) to areas such as manufacturing, product development and innovation. With Business Process Outsourcing, the target is basically longer-term and it focuses on the achievement of the overall business benefits, whether enhancing an organization’s competitive position in the marketplace or improving shareholder returns (Maku and Iravo, 2013).

As Cox (2014) states, as from the early days when it was viewed as little more than a hohum tactic which aimed at reducing costs, outsourcing has now matured into a strategic management tool. Global outsourcing market’s growth in the past years has been phenomenal, and all indications are that the pace will continue in the coming years. In the face of increasingly intensified competition in the emerging global economy, manufacturing firms are progressively turning to outsourcing of some of their functions (Cox, 2014).

With an increasingly turbulent business environment, organizations are continuously looking for better ways of gaining competitive advantage. One of the strategies that firms can employ to acquire sustainable competitive advantage is contract manufacturing (commonly known as outsourcing). Outsourcing is considered to be basically that part of an organization’s process, which is sourced from outside suppliers with no regard for the type of relation with these suppliers (Kiongera, Wanyonyi, Musiega and Masinde, 2014).

Many managers consider outsourcing as the only way to keep a business competitive in this century. The highly turbulent business environment coupled with almost insatiable customer demands for tailored services and products has forced companies to over time evaluate, improve and re-engineer their operations. As Insinga and Werle (2000) noted, these engineered processes have a significant contribution to the efforts by organizations to wholly satisfy customer needs and wants.

Cox (2014) asserts that every firm engages in outsourcing to some extent. Some firms may outsource manufacturing, customer care and logistics, while others choose to outsource after sales technical support, market research, product design and development. Cox further states that while many manufacturing companies may not outsource the above value chain activities, it is more common for most firms to outsource support activities such as accounting, auditing, staffing, or administration. The decision regarding what functions to outsource and which ones to keep in-house depends on many factors from company to company such as the need to develop invest in resources, skills, and to stay abreast of to the evolving technology in any areas kept in-house (Welch and Nayak, 1992).

Many organizations in the telecommunication industry in Cameroon are now increasingly pursuing continuous improvement in their performance. As Maku and Iravo (2013) noted, over the past two decades there has been a growing recognition of the vital contribution of outsourcing strategy on the performance of organizations.

MTN, Douala was established in 2001 as a provider of telecommunication services in Cameroon. The growth curve of the company has been steady since then, with many competitor’s firms such as Orange Cameroon, Nextel, Cameroon and even CAMTEL, but MTN still dominates the telecommunication industry with having majority of the telecommunication subscribers.

 

1.2 Statement of the Problem

Many organizations in Cameroon in both private and public-sector face dynamics in their operating environments. The public entities in the country are the most prone to these changes given their reactionary strategies and slow response to change. MTN is one of private companies in Cameroon whose services are in an ever-increasing demand due to the fact that it is mandated with ensuring people in the rural areas access telecommunication.

The increase in population and industrialization brought about by devolution has increased demand for power in rural areas. Thus, its mandate is quite overwhelming. The function of the human resource in this entity is indeed imperative since the functions play a leading role in realizing the firm’s mission and core objectives. It is noted that the challenges brought about by the environmental dynamics has resulted in stiff competition particularly competition for resources like human capital at MTN. It is further asserted that the challenges on human resource recruitment, training and development have affected the financial performance of the company. This is due to reduced revenues due to among others, increased costs of operations in recruitment, training and development costs. The rationale of outsourcing human resources is to lower costs, enhance service delivery including quality of services, and indeed improve organizational performance.

However, outsourcing leads to, high employee turnover because the employees have less work to do, drop in profit margin because they pay a lot to experts, drop in quality and quantity if the experts are not well qualified. At the behest of this, outsourcing certain human resource functions is bound to enable a firm to leverage its expertise and focus more on its core activities. Therefore, it is justifiable to assert that the organization should outsource some of its functions in order to contribute in the realization of the company’s objectives. Yet, studies hitherto conducted have failed to clearly outline the implication of outsourcing HR activities on employee engagement. It is in light of this, that this study was carried out with the aim of examining the impact of outsourcing HR activities on employee engagement in the telecommunication industry. The case of MTN Douala Cameroon.

 

1.3 Objectives of the Study

1.3.1 Main Objective

The general objective of the study is to investigate the effect of outsourcing HR on

organizational performance. The case of MTN Douala – Cameroon.

1.3.2 The specific objectives were:

1. To find out the impact of outsourcing recruitment by MTN Douala and the performance of employees
2. To find out the impact of outsourcing training by MTN Cameroon on the performance of employees
3. To assess the challenges associated with outsourcing of human resource activities by MTN Douala.

1.4 Research Questions

1.4.1 Main Research Question

What is impact of outsourcing HR activities on organizational performance?

1.4.2 Specific Research Questions

1. What is the impact of outsourcing recruitment by MTN Douala on the performance of employees?
2. What is the impact of outsourcing training by MTN Douala on the performance of employees?
3. What are the challenges associated with outsourcing of human resource to MTN Douala?