A survey of outsourcing of training services by commercial banks in Kenya

Abstract

Outsourcing is a trend that has been in existence for quite sometime and is not a new phenomenon in the Kenyan banking industry, as it has now been accepted by some of the commercial banks. Outsourcing is a trend found in many types of businesses today and is defined as, the practice of contracting for the provision of specific services by people outside of an organization (Stear, 1997). Organizations around the world are increasingly considering outsourcing as a Strategic Human Resource Management (HR) tool, which can be leveraged to allow them to focus on their core competencies, (PriceWaterHouseCoopers, 1991). The objectives of the study were to determine the extent of outsourcing of training services in the commercial banks in Kenya and to establish the factors that influence the extent among commercial banks in Kenya. The literature covered areas on of outsourcing of training services. The research methodology was a census survey. In order to meet these objectives, the pertinent primary data used in the study was collected through questionnaires directed to the head of human resource departments. The questionnaire used in this study contained both open-ended and closed questions. The study established that outsourcing of training services has posed some challenges in the banking industry in Kenya although some of the reasons that compel Banks to outsource training services include reliability and cheap. These challenges arose from identification of training vendors, cost evaluation on whether to outsource or not, staff resistance to change, effectiveness of training vendors and employee training demands and needs and aligning of outsourcing of training services to the overall organizational training policy and the organizational strategy. The study is the first in the field of outsourcing of training service among commercial banks in Kenya and recommends further research on outsourcing of HR training services not only in the banking industry but also other sectors.