Human Resource Outsourcing and Skill Variety of Outsourced and Core Staff: Evidence from the Nigerian Banking Industry

Abstract

In Nigerian banking industry, Human Resource outsourcing has grown beyond the externalisation of auxiliary activities to include core activities. The consequences of this practice on employee skill variety are rarely discussed in the industry. This study therefore, investigated the skill variety of outsourced and core staff in Nigerian banking industry with evidence from Bank X, Southeastern region. Survey research design was adopted. Bank X was purposively selected due to its reputation for employing outsourced staff in its core banking operations while its branches in Abia, Imo and Enugu States were randomly selected. All 352 workers in the three States comprising 218 outsourced and 134 core staff were enumerated. Mixed methods were used to collect data while descriptive statistics and Chi square at p<0.05 alpha level of significance were used to analyse data. Outsourced staff had less variety in their tasks compared to the core staff. They had less opportunities to acquire additional skills and were required to utilise fewer skills in the course of their work, leading to low skill variety. Their employment status by implication deprived them of human capital investment either privately or corporately. Mode of employment was significantly associated with skill variety.

Underemployment and Workers’ Deskilling: The Nigerian Experience

“…Therefore, a worker that possess higher skill acquired through higher education and training will be more productive when placed on a job that requires equivalent or proportionate skill, otherwise the worker might find himself in a job that underutilizes his abilities, time and educational training. Underutilization of skills which is synonymous with underemployment in the long run creates a condition of loss of skill -deskilling (Nwakanma & Onyeonoru, 2021). Although, it is argued that increase in human capital is linked to performance (Luksyte & Spitzmueller, 2011), however, excess human capital may also have a negative impact on the work outcomes (Rehman et al, 2021).…”