A Step-by-Step Guide to Hiring Employees in Bangladesh

Despite the high prospects of hiring employees in Bangladesh, the process of hiring employees in Bangladesh is not as easy as it seems. To hire employees in Bangladesh, you need to have an understanding of the essential factors, cost, and the process of hiring employees in Bangladesh. This blog explores the step-by-step process of hiring employees in Bangladesh. 

Essential Factors to Know Before Hiring Employees in Bangladesh 

You need to note the following factors of Bangladesh’s labour laws and employment procedure if you wish to acquire comprehensive knowledge regarding hiring employees in the country. 

Employment Contracts

Employment contracts hold significant importance within the recruitment procedure in Bangladesh. Employer and employee terms of employment are governed by a contractual arrangement. The parameters of the agreement should conform to the Bangladesh Labor Act 2006 and the Bangladesh Labor Rule 2015. In the absence of a written employment contract, a letter of employment is required. The employment contract must include working hours, nature of work, job title, salary, bonuses, compensation, probation, and termination. 

• Working Hours: The Bangladesh Labor Act 2006 imposes a daily and weekly maximum of forty-eight hours of work per employee in any establishment. An additional two hours of overtime are permitted daily. An employee is limited to a maximum of 60 hours in a week. 
• Bonuses and Compensation: Annually, employees who have completed a 12-month probationary period are entitled to two festival bonuses in the amount of the standard salary. The minimum wage in Bangladesh differs from sector to sector. The minimum salary of an apprentice in the RMG industry is Tk. 8,000 per month. The minimum compensation for apprentices in the Export Processing Zone is TK. 4,480 per month.  A worker accrues 200% of their regular compensation in overtime. The due date for payment of wages is seven days after the specified payment period. 
• Probation: Section 4(8) of the Labor Act stipulates that the duration of the probationary period is contingent upon the occupation of the employee. Probation terms for administrative personnel are six months, while all other employees are subject to three months. Provision of inadequate service during the initial three months of probation may result in an extension of the probationary period. Once the probationary period concludes, the employee is deemed qualified to be offered a permanent position with the organization. 
• Termination: If an employer wants to fire a permanent employee, they have to provide them 120 days’ notice. The notice period provided for temporary employees is thirty days. All termination benefits are due thirty days after the date of termination from the employer.

An employee is required to provide their employer with sixty days’ notice before their departure. A notice period payment is due to the employer in the event that less time is provided. Temporary employees are obligated to provide a notice period of thirty days. Following the termination of their employment, they will receive 30 days of pay for each year worked more than ten years, and 14 days of pay for each year worked over five years but less than ten. 

Work Permits

Working in Bangladesh requires all foreign nationals to possess a valid work permit. The E-visa issued by the Embassy of Bangladesh is valid for three months. Employers in Bangladesh are additionally required to register with the appropriate government authority before hiring foreign nationals. Three governmental entities in Bangladesh are principally concerned with the issuance of work permits to them. Foreign labour in the export promotion zones is regulated by the Bangladesh Export Processing Zones Authority (BEPZA). Employment permits for foreign nationals working in industrial enterprises situated beyond the processing zone are issued by the Board of Investment (BOI). Work permits for foreign nationals in non-governmental organizations are issued by the NGO Affairs Bureau of Bangladesh (NGOAB).

Foreign employers seeking to issue work permits for their personnel are required to submit to the Bangladeshi Embassy a letter of employment and a confirmation letter of concurrence from the relevant government authority. Prospective employers are required to submit an E-visa recommendation application to the BOI on behalf of their foreign employees who fall within its jurisdiction. 

Employee Benefits

Employee benefits are an essential component of the recruiting procedure. Typical examples of such benefits comprise paid leaves, maternity leave, health insurance, compensations, and so forth. 

• Paid Leave: Employees who have completed a complete year of service are entitled to completely paid annual leave. An employee may carry forward a maximum of sixty days of unused annual leave. One day of leave is granted to industrial establishments, transportation service providers, and manufacturers for every eighteen days of labour. Employees in EPZs must get a day of leave for every 22 days of work. One day off is granted to tea plantation employees for every twenty days of work. Newspaper employees are granted one day of leave for every eleven days of work. Every fourteen days of work is followed by one day off for employees under the age of 18. Also, full government holiday pay is provided to all employees. If an employee is required to work on a holiday, they will be granted two additional holidays with complete pay and an additional day off.

• Sick Leave: Except for those employed by newspapers, all employees are granted a period of fourteen days of paid medical leave. In order to be granted sick leave, employees are required to provide a medical certificate. Newspaper employees are eligible to take a half-paid medical leave for one-eighteenth of their working hours. 
• Maternity Leave: Women who have been employed by the organization for a minimum of six months are eligible to take up to eight weeks of paid leave, beginning from the day following the delivery of their child. They are granted additional maternity leave but not maternity compensation if they have two or more children. Women who have not worked for six months are eligible for unpaid leave. More so, they are prohibited from working for a period of eight weeks after the birth of their infant. Pregnant employees in EPZs are granted a leave entitlement of six weeks prior to the due date, with an additional six weeks of leave granted after the child’s delivery. An employee receives a routine salary throughout maternity leave. Maternity benefits may only be granted twice to a single employee by employers in EPZs, provided that the leave remains unused for a period not exceeding three years.

• Health Coverage: The responsibility of supervising and arranging medical treatment for an injured worker falls within the employer-employee relationship in Bangladesh. The employee is required by the Bangladesh Labor Rules 2015 to notify the Labor Court of any workplace accident. The employee is entitled to a free medical examination by a registered medical professional for three days following the receipt of notification.

In the absence of contrary evidence from the employer, an occupational sickness diagnosis that the employee acquired during employment for the company for a duration exceeding six months shall be considered an unintentional injury in the workplace. The employee must receive paid for treatment until the illness reaches a state of complete recovery. The Labor Act of 2006 provides details regarding employee compensation, including the quantity and method of payment, in addition to medical care. 

Taxation 

In Bangladesh, corporations are required to remit a corporate tax amounting to 32.5%. Bangladesh imposes a progressive payroll tax on employers, which ranges from 10% to 30%. Although social security is not officially acknowledged in Bangladesh, certain corporations have a legal obligation to contribute 5% of their earning to the Workers Profit Fund.

The following table summarizes the income tax rates for employees in Bangladesh. 

On the other hand, foreign employees are required to remit income tax at a fixed rate of 30%. Additionally, as Bangladesh doesn’t have a functional social security system, no social security contributions are remitted by Bangladeshi employees to the government. 

Employee Protection Against Discrimination 

The majority of implemented legislation relevant to the protection of workers’ rights is framed by Bangladesh’s labour laws and regulations. The constitution of Bangladesh states that every citizen is equal under the law. A business is not permitted to discriminate against workers or job applicants for reasons such as orientation, intimacy, theology, and so forth. It is advisable to refrain from questioning candidates on these subjects during interviews and to use language that is inclusive of all applicants. 

Cost of Hiring Employees in Bangladesh

The cost of hiring employees in Bangladesh varies depending on the business and the company’s rules regarding optional costs like benefits. As such, it is not feasible to give an exact number. The majority of businesses provide their workers with a number of extra advantages, such as health insurance, festival bonuses, and transportation allowances. Moreover, employers in Bangladesh incur extra expenses for job posting, interviews, employee training, and onboarding during the hiring process. So, when planning your budget for the hiring process, the extra expenses should be taken into account. 

Prospective Alternatives for Hiring Employees in Bangladesh

There are primarily two ways that foreign companies can hire employees in Bangladesh. You can either create a legal entity or employ an EOR in Bangladesh. Registering a foreign subsidiary in Bangladesh to oversee the hiring procedure may fulfill your hiring needs. However, it may be a laborious and time-consuming procedure. On the contrary, hiring a trusted EOR like Meteors has several advantages because it will handle payroll, benefits, taxes, and other HR responsibilities for your employees while making sure local labour and tax rules are followed. You can eliminate all types of hiring headaches when you work with an EOR. 

The Procedure for Hiring Employees in Bangladesh

1. Determine the Necessity for Hiring: The first step of hiring employees in Bangladesh is determining the necessity of hiring. Employers need to clearly define the position’s requirements, prerequisite experience, desired qualifications, and candidate eligibility while making sure whether the position has to be filled temporarily or entirely. 
2. Post Job Openings: Companies can post job openings online to find prospective employees or internally so that current staff members recommend candidates. 
3. Examine Candidates: After getting responses from interested candidates, you need to review the resumes to find prospective employees. Notify the eligible applicants of the next screening procedures and remove ineligible applicants from the pool of applications. To further reduce the number of candidates, schedule interviews with the shortlisted candidates.
4. Conduct Background Checks: To protect your company and confirm the qualifications of potential hires, background checks are crucial. Prior to making a final job offer, background checks usually examine a candidate’s credit report, criminal history, and career. 
5. Make the Final Choice: Finally, the hiring process will end with an assessment of candidates based on their performance in interviews and screening exams, as well as their talents, recommendations, and other pertinent data. Decide on one or more top choices and then pick a backup candidate. 

Or, you can make the whole process of hiring easy and efficient by employing an EOR, like Meteors, in Bangladesh. It will be less time-consuming and allow you to focus on more important goals and aspects of your business. Meteors will effectively streamline the hiring process while staying compliant with all laws and regulations. 

Summary

The country harbors one of the most talented and hard-working people making the country a perfect place to recruit employees. Foreign companies can capitalize on Bangladesh’s prodigious talent pool, thereby stimulating innovation and expansion. However, first one needs to understand the specifics of hiring employees in Bangladesh. This blog discusses the essential factors one needs to know before hiring employees in Bangladesh which involve employment contracts, work permits, employee benefits, taxation, and employee protection against discrimination in Bangladesh. Then it moves on to the cost and the prospective alternatives of hiring employees in the country. Finally, it covers the step-by-step process of hiring employees in Bangladesh. Now if you need help with the extensive recruitment process, Meteors is the perfect partner for you!

Frequently Asked Questions (FAQs)

Which processes are essential for hiring employees in Bangladesh?

Employment in Bangladesh necessitates the execution of various procedures, such as acquiring required approvals, formulating employment contracts, and ensuring compliance with labour legislation. 

What are the basic employment contracts used in Bangladesh?

Employment contracts in Bangladesh typically comprise provisions of confidential information, working hours, termination protocols, compensation, and benefits. Adherence to these contracts to local labour laws and regulations is a must. 

Which recruitment channels are commonly utilized to acquire employees?

Online employment boards, newspaper advertisements, and social media platforms are all examples of diverse recruitment channels in Bangladesh. You can also hire an EOR to deal with the hiring process in Bangladesh. 

What are some possible challenges that should be avoided when hiring employees in Bangladesh?

Managing employee expectations, navigating bureaucratic processes, comprehending local customs and language barriers, and ensuring compliance with ever-changing labour laws and regulations are all potential challenges that may arise when hiring employees in Bangladesh. 

The post Hire Employees in Bangladesh: Step-by-Step Process appeared first on Meteors Bangladesh Ltd.

Key Considerations for Effective HR Outsourcing Arrangements

It’s critical to select the ideal partner if you have decided to collaborate with an outsourced HR provider to reduce your workload and maintain compliance. You should take your time assessing each HR provider’s distinct offers because every other HR provider is different from each other. This is important to ensure that you choose the one that will work best for your business. This blog explores what HR outsourcing entails, why you should outsource HR, and the factors to consider when outsourcing to human outsourcing to a human resources management company.

What is HR Outsourcing?

Employing an agency or consulting business to handle your HR-related tasks is known as HR outsourcing. It can decrease the expenses associated with hiring and overseeing a substantial staff and typically saves money. HR can also concentrate on strategic human resource initiatives rather than tedious, day-to-day repetitive work due to outsourcing.

The most outsourced HR tasks are as follows.

• Payroll Management
• Performance Management
• Pay and Benefit Administration
• Employer Branding
• Talent Acquisition

Why You Should Outsource HR?

Any business regardless of its size (small, medium, or big) can reap great benefits from outsourcing. Your company can take advantage of the time and cost saved. HR outsourcing options are a great way to supplement your current team or replace your department while still meeting the needs of your employees on a daily basis.

The following are some of the benefits of HR outsourcing-

• Cost-effective as there is no need to recruit an entire HR staff.
• Access to knowledgeable HR personnel when hiring professionals is not feasible
• Less workload management
• Lower level of risk
• Improved data management
• Higher level of productivity
• Updates to the HR software system that handles data for your businesses

When to Outsource HR?

• For Employer Branding: HR departments frequently can generate unique ideas but lack the execution skills to produce satisfactory, consistent material. They can get the resources they need to implement these ideas by outsourcing some of these duties.
• When the Cost of Internal HR Is Too High: For small businesses, outsourcing HR is the best option because their initial budget will be too tight to form an in-house team.
• If You Rarely Hire People: You will not be constantly employing new workers if your business is small. In this case, you should outsource HR duties. By doing this, you will be able to control your spending and concentrate on other things like staff development and company expansion.

What to Consider When Outsourcing HR?

Identify Your Needs and Level of Service

The first step in choosing the perfect HR outsourcing provider is evaluating your unique HR requirements. Then you can move on to choosing the level of service you would require. The size, number of employees, industry, salary categories, employee type, organizational layout, and other factors all affect the HR needs of a business.

Larger companies need a broader system that involves performance tracking, compliance monitoring, training and assistance, and vacation management. Small companies may only need normal functions like HR management, payroll management, and benefit administration. Once you have identified your needs, you can move on to choosing the services that you need. You should go for a provider who can tailor their offerings to your needs and goals and who has the experience and expertise in this particular field.

Cost Management

The success of your company depends on the establishment of a clear HR function since HR-related issues can be expensive to address when handled improperly. Your budget, the size of your company, and the extent of your HR needs will determine how much you can spend on HR functions. The cost of the HR outsourcing provider should be taken into account as the second aspect. You may save business overhead expenses, increase productivity, and gain access to technology by outsourcing your HR. To ensure that they are upfront and transparent, you should also assess the costs of various providers. The quality that the provider can add to your company, such as raising consumer satisfaction, retaining staff members, and efficiency should also be assessed. Seek out a provider who can give you a reasonable and competitive price.

Technology

To effectively manage and maximize your human resources, technology is a crucial aspect. Therefore, you should seek out a provider who has access to the newest and most advanced HR software and systems. Many HR outsourcing firms provide platforms for handling HR duties like payroll and benefits management, but using their service grants you accessibility to that. This makes leaving without causing a significant disturbance to your business difficult. So, you should choose a company that can guarantee privacy while combining their technology.

Plans for Growth 

If you are planning to grow your business, be sure that the organizational structure and HR strategy of the service provider you chose, support your objectives. Selecting an HR outsourcing provider with expertise in specialized organizational growth initiatives is beneficial in this case. For long-term staff retention, your HR consultant should be able to assist you with several concurrent hiring procedures, develop engagement techniques, and offer management training services.

Reputability

In terms of HR, you should ensure that the company you select has an established history of helping businesses climb the ladder of success. You should request references from previous customers in your industry or from companies of comparable size from prospective service providers. Make sure you contact previous clients to find out about their interactions and caliber of the work they received, and the ways in which the partnership benefitted their company. Furthermore, you should seek out a provider who has a strong sense of ethics.

Experience in the Sector

Your provider must have the experience and expertise to maintain your compliance with workplace norms and regulations. This is because HR issues can get complicated and there can be serious repercussions for doing them wrong. Seek out service providers with trained and licensed personnel. Your chosen service provider needs to have the specialized knowledge necessary to provide you with the direction you require to make more calculated selections.

Business Awareness

To secure your business and create equitable solutions for your employees, your HR outsourcing provider should assist you in adhering to best practices. You should partner with a consultancy service that truly comprehends the intricacies of your company. Additionally, make sure that they can assist you in adhering to legal requirements, evaluating danger, and identifying the best course of action.

Collaboration and Communication

You should also take into account how well you and the HR outsourcing provider communicate and work together. If you choose to outsource HR, your ability to manage and oversee your human resources remains intact. Seek out a provider who can engage you in decision-making and feedback procedures, as well as communicate with you efficiently and frequently.

Additionally, you should search for a provider who can work effectively with your internal HR team and harmonize their objectives and beliefs with your own. Look for a provider who can become an extension of your company and build a respectful and trustworthy connection with you.

Customer Service

Customer support is an essential component of HR outsourcing. You can simplify HR procedures and concentrate on expanding your company and taking care of your employees by working with a provider that puts a high priority on customer service. Choose a service provider with a committed technical and support staff that is on hand to address any problems you may have and to answer your queries.

To make the most of their services, be sure the provider delivers continuous assistance and training. Assess the communication style and responsiveness of the service to make sure you get the help you require when you need it. Selecting an HR outsourcing provider with outstanding customer support can guarantee fruitful collaboration and sustained success.

Culture

The culture and compatibility of the HR outsourcing provider should also be taken into account. An HR outsourcing company’s beliefs and culture can have a big influence on your business. Find a service provider that will not interfere with the existing dynamic and will respect the culture you have established. Additionally, search for a provider who can collaborate well with your staff and other stakeholders. You should choose a business that places high importance on accountability, integrity, and honesty with clients. You should also ensure that they can appreciate and comprehend your business goals and objectives.

Contract 

If you determine that outsourcing isn’t the best strategy for handling HR at your business, you might want to steer clear of making a long-term commitment. You should especially consider this if you are just getting started in outsourcing. A contract may be signed, but be sure you understand it to prevent being forced into a “longer-than-wanted” relationship. You should check if they provide flexibility in contract lengths and termination fees. It’s also crucial to keep an eye out for any automated contract renewals.

Summary

A successful business with a positive working culture depends on how well you manage and assist your staff. It can be difficult to juggle HR responsibilities with business expansion. Many businesses choose to outsource some or all of their HR functions to help reduce that strain without jeopardizing the integrity and efficiency of the company’s operations. This is why outsourcing human resources has grown in popularity in the contemporary day. Human resources outsourcing means outsourcing HR operations to a third party.

In this blog, we have discussed what human resource outsourcing entails and why you should outsource human resources operations. We have also examined when a company should outsource human resources. Finally, there is a compiled list of considerations a business needs to take into account when outsourcing to an HR company. Now if you need a reliable HR partner to outsource your HR operations, Meteors is the ideal partner for you.

Frequently Asked Questions (FAQs)

What is a Human Resources Management Company?

A human resource management company is a third-party entity that focuses on offering organizations a variety of HR services.

Will there be job losses due to outsourcing HR operations to a Human Resources Management Company?

Although hiring needs may change as a result of outsourcing HR activities, the usual objective is resource reallocation rather than job elimination. By outsourcing, your HR employees can concentrate on more strategically oriented projects that promote business expansion.

What effects does outsourcing HR operations have on data security and privacy?

Data security and privacy are important factors when outsourcing HR functions. Make sure that the human resource management company you select has effective data protection policies in place, such as access limits, encryption mechanisms, and adherence to pertinent laws.

What is a good way to measure whether hiring a human resource management company to handle HR responsibilities was successful?

Saving money, increasing productivity, enhancing compliance, improving employee satisfaction, and boosting overall business performance are some success measures for outsourcing HR tasks.

How can a business guarantee that the outsourcing of HR operations goes smoothly? 

Maintain regular and transparent communication with the human resource management company as well as your internal team during the process to guarantee a seamless transition of outsourcing HR operations.

The post Things to Consider When Outsourcing to a Human Resources Management Company appeared first on Meteors Bangladesh Ltd.