The Economic Challenges Faced by the HR of FinSource

Company Limited and Possible Solutions

Human Resource Management (HRM 502)

Section 03

Date of submission: 21th December, 2022

The Economic Challenges Faced by the HR of FinSource Company
Limited and Possible Solutions

Human Resource Management

HRM 502

Section: 03
Semester: Fall 2022

Submitted to:
Dr. Abul Khayer
Graduate School of Management
BRAC University

Submitted by:
Student Name ID
Syed Anunag Albab 21264010
Israt Jerin Dolon 21164068

Submission date: 21th December, 2022

 ACKNOWLEDGEMENT LETTER
We are grateful to our faculty for giving us the opportunity to work on this project. He made
some excellent suggestions for how to improve the project, and we are really appreciative of
them for doing so.

Additionally, we would want to express our gratitude to our fellow members of the group
because without their contributions, neither the creative nor intellectual growth that is evident
today would have been possible.
 Forwarding Letter

21th December, 2022

Dr. Abul Khayer
BRAC Business School
BRAC University

Subject: Submission of Term paper on “The Economic Challenges Faced by the HR of

FinSource Company Limited and Possible Solutions”

Dear Sir,
This is the term paper that was required of us. Using the information we learned in the "Human
Resource Management" course, we finished the task. We would like to express my sincere
gratitude to you for your kind guidance and suggestions in preparing the report.

Also, our sincere gratitude for your encouragement and support. It is a pleasure for us to have the
chance to work with you and receive the necessary direction. We have tried our best to complete
this term paper meaningfully and correctly. However, if you have any questions regarding the
report, please contact us without any kind of hesitation.

Thank You Sir.

Sincerely,

Israt Jerin Dolon, ID: 21164068

Syed Anunag Albab, ID: 21264010

Contents
ABSTRACT……………………………………………………………………………….1
INTRODUCTION…………………………………………………………………………1
Background of the Study………………………………………………………….1
Statement of the Problem………………………………………………………….1
Objectives of the Study…………………………………………………………….2
Structure of the Report……………………………………………………………..2

LITERATURE REVIEW …………………………………………………………………..3-5

METHODOLOGY………………………………………………………………………….6

ANALYSIS & FINDINGS…………………………………………………………………6-9

IMPLICATIONS OF THE STUDY……………………………………………………… 9-11

LIMITATION AND CONCLUSION…………………………………………………….11-12

REFERENCES……………………………………………………………………………13-14

APENDIX…………………………………………………………………………………15
 Abstract
This paper is basically prepared by focusing on the economics challenges faced by the
companies. To be successful a firm must go through some challenges. Because of Covid-19
situation and sudden inflation many firms in worldwide as well as Bangladesh faces serious
economic challenges. Our selected company FinSource Company is also listed in this. By
researching and taking interview of the HR manger we tried to identified those challenges and
lastly we tried to give some useful suggestions as well. We believe that this report will be
beneficial for other firms also.

Chapter 1: Introduction

1.1 Background of the Study

At present Bangladeshi companies faces economic challenges because of the global situation.
Covid-19 has impacted largely the business economic condition. According to Kozlakidi et al.,
(2020) because of Covid-19, the world economy was impacted largely. Developing countries like
Bangladesh faces lots of economic challenges in recent years. Our company- FinSource Ltd. is
also facing some serious economic challenges in the present situation. Our group assignment
focusing on the economic challenges faced by the FinSource Limited Company allows us to get
a clear idea about the recent challenges, especially economic challenges faced by the companies,
and how to meet effectively with those challenges. The purpose of this study is mainly to find
out the key economic challenges faced by the companies during covid-19 and the best possible
solution to meet the challenges. Our group members tried their level best to collect data and
research the topic so that we can contribute an effective outcome.

1.2 Statement of the Problem

The economic challenges or condition of the firms has become the most popular topic
worldwide. Global and local companies both face serious challenges regarding the economic
condition of the firm. Covid-19 has impacted more on the company’s overall economic

1
condition. Companies success rate is highly dependent on economic stability. Since Covid-19
has enables companies to think in a different way to run their operation, companies face some
economic challenges. To survive in the world economy and effectively do business, it is
important to accept the challenges. We tried to identify the key economic challenges faced by a
company and how a company can face those challenges effectively.

1.3 Objectives of the Study

General Objective:

 Observing the current economic challenges faced by the FinSource Company

 Well-analyzed recommendations for gaining the challenges effectively

1.4 Structure of the Report

Our report is mainly based on the qualitative research. We designed this paper in a simple and
convenient way. The basic format is same for this report as the basic format. Also we have
included the extensive literature review in this paper and an informal interview. This report
contains mainly 6 chapters- Introduction, Literature Review, Methodology, Analysis and
Findings, Implications and finally conclusions and limitations. Besides we have use the APA
format referencing and an useful appendix of the interview of the HR manager.

2
 Chapter 2: Literature Review

S.L. Author/Year Objectives Methodology Findings

1. (Islam et al., This article's -This article has Because of the Covid-19
2020) main goal is to employed both pandemic, firms in
analyze the quantitative and Bangladesh face sudden
nation's qualitative loss in their business.
healthcare, research Their selling ability to
social, and approaches. people has been
economic decreasing. The
issues in -Data collected economic condition of
dealing with from Secondary the individual has
the COVID-19 sources, decreased which affect
pandemic newspaper negatively in the business
catastrophe. articles, research environment.
institutions, the
website WHO,
etc.
2. (Daniele, 2020) The process of -Qualitative Covid-19 reduces
globalization research government and business
explores the approach leaders to their most
difficulties and basic function: improving
consequences the lives of others. Due to
of the the current crisis, several
coronavirus economic, technological,
pandemic. and psychological
remedies are required to
address the nation's
financial challenges,
communication issues,
digital gaps, and a
general sense of misery.
3. (Boons, To provide the -Qualittative For achieving the highest
Montalvo, & potential of the research performance a firm must
Wagnerd, 2013) idea of a - Originated from have economic stability.
business model a selection of Sustainable innovation in
for papers presented the business process can
comprehending at the Delft-based make easier economic
and promoting ERSCP-EMSU challenges.
sustainable Conference in

3
 innovation. 2010
4. (Goodness N. , The study Review of This study concluded that
Nchuchuwe, & concentrated Literature organizations go through
Adeyi , 2021) on identifying change constantly.
the difficulties Covid-19 has
faced by HR fundamentally altered
managers in how human resource
maintaining management is
the HR conducted. Incorrect
experience in management of these
firms during changes results in chaos
the COVID-19 and a decline in
epidemic and production. To be able to
offers address the issues as they
illuminating arise, HR managers must
insights on be well-equipped.
how to either
reduce these
difficulties or
lessen their
impact on the
general
workforce.
5. (Schmutzler, To identify -Review of -All levels of people
Smeets, & How FinTech Literature should participate to face
Zeisberger, companies Can and solve the economic
2021) Help Latin - The impact of challenges of society.
America to COVID-19, Women's participation in
Deal with the which has caused this regard is very
recent an economic necessary.
Economic crisis, many
Challenges MSMEs to be on
the edge of
bankruptcy, and
a significant rise
in poverty, is
examined in this
study.
6. To focus on -Review of -The pandemic has
(Islam, Talukder, how articles affected negatively in the
& Islam, 2020) Bangladesh, - Data from economic situation of the
with limited secondary country. Thus this
resources, is sources impacted negatively on
able to cope the economic situations

4
 with Covid of the individual firms.
pandemic by
implementing
measures.
7. (Md. Alauddin & To determine -Interview (Data -Enhanced post-
Chowdhury, the SME was primarily distribution monitoring is
2015) sector's current collected from 50 required. Such increased
state in respondents credit administration
Bangladesh. through costs will need to be
interviews with covered by an effective
selected SME SME finance program.
entrepreneurs The primary lender will
and SME need an adequate
bankers.) rediscount facility in
addition to a credit
-Also from guarantee or refinancing
secondary facility to cover these
sources charges.
(publications
such as books,
newspapers,
journals, reports
from various
government
agencies, and
websites, as well
as numerous
published
research works).
8. (Sascha et al., Examining the - Exploratory The research
2020) COVID-19 qualitative demonstrates how
crisis's research businesses of all sizes
influence on and in all industries
family - 27 semi- quickly modify their
businesses structured business plans to account
enables interviews  for shifting
preliminary environmental factors to
inferences on cope with the economics
family firm challenges.
crisis
management.

Chapter-03

5
 Methodology

In our report, we have collected our essential data by using both primary & secondary sources.
As the report is based on qualitative data, most of the data are collected from secondary sources.
These secondary sources are our topic-related online sources like several websites, articles,
journals, books etc. Moreover, we have made a questionnaire based on informal talks with the
HR manager of “FinSource Limited” company where we collect our preliminary data. We also
collect some data like the company’s background information from the company’s website. We
reviewed previously published publications that had a full or partial relationship to the subject of
our paper. In order for our article to be useful in the future, we attempted to draw a conclusion
using pertinent data and facts.

Chapter-04

Analysis & Findings

The informal interview with the HR manager of our selected company, give us chance to
understand more clearly about the possible economic challenges face by firms and how those
firms effectively works for minimize the risk that rises from the economic situation. In every
organization, managers have the most significant function. They oversee the workforce, and by
using their managerial expertise and talents, they meet the organization's objectives. Wen et al.
(2017) stated that employees' identification with their manager or other organizational leaders
fosters greater creativity. Management must overcome numerous obstacles. He is in charge of
either the performance of the staff or their motivation. To face the economic challenges properly
all types of managers play the most important role.

Our selected company for this assignment is a medium size finTech company. As a USA-based
company, the environment of the USA also affects the situation of the company. After taking an
informal interview with our respected HR manager we have found out the major economic
challenges that the firm faced or still facing are:

 Rate of Inflation

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  Cost of employee benefits
 Facing problems with trade with neighboring countries

 Low productivity due to poor human capital development

 Underemployment

As currently, Bangladesh is in a period of inflation, which also affects the economic condition of
the business. The inflation or high rate of products causes the lower purchasing power of the
general people. People are under pressure to meet their daily needs. So people do not easily pay
attention to other issues. As our selected company’s business is to provide retirement facilities to
people, people are feeling confused to invest in this company. People fall problems meeting their
day-to-day needs due to inflation so they are not interested or do not have the ability to invest
largely in these sectors. The companies, who take helps from this company to make their
retirement facilities more properly, it can be shown that those companies are not much interested
now to spend in other companies continuing the retirement policies. Because by hiring the third
party company will rise their cost. Already most of the companies are facing high economic risk.
So those companies does not wants to increase their cost by hiring or take assistance from third
party companies. As our interviewee said-“Now companies are less interested to invest in the
third party contributors. Companies try their level best to cut off the cost and make an effective
use of the resources they have.” That is why our selected company FinSource falls in risk
regarding the economic situation.

Another important economic challenge faced by the company is the cost of employee benefits.
For employee satisfaction and the development of the overall situation of the organization,
employee benefits are a must. But due to the recent economic situation and also for Covid-19
impact, FinSource company somehow faced some challenges. The covid-19 affected much
negatively in the economic situation of the company. As the business was not running well at
that time, the company was not able to give various benefits to their employees properly. This
includes the salary, bonus, and other benefits. The HR manager stated that- “In the Covid-19
situation we faced some serious challenges. We tried our level best to maintain the proper salary
distribution of the employees. But sometimes we failed. To minimize the sudden loss we go for

7
alternatives in the compensation package. We reduce the salary percentage from all levels of
employees to tackle the unavoidable situation.” So it is clear that because of the economic
condition of the overall country our selected company also faced challenges. They tried to cope
with the challenge by reducing the percentage of the salary of each employee for a certain
period.

Facing problems with trade with neighboring countries is another problem for FinSource
company. This problem was much bigger or more serious during the covid period. At that time
the whole global economic condition was negative. So the foreign countries were not interested
easily to make trade with this companies. There were also some barriers to do trade with other
countries. So the neighbor countries were not much interested to invest in this company. The HR
manager said- “ To invest in a foreign country will cost higher. So the neighbor countries tried
to avoid taking services from this company”.

One of the major economic challenges faced by our selected company is low productivity due to
poor human capital. Though at present company is more successful regarding this matter. But
during the covid-19 pandemic, this company faced much issues. Because of loss in the business
and lack of enough capital, company was not able to train employees according to their needs.
Because some training were costly and bear the extra cost for the company was a huge concern
area. That is why employees were deprived from their essential training and development
programs. And for that reason company faces poor human capital. Though those employee had
potentials but because of the lacking of trainings those employees can not contribute effectively
in the organization. And this lead to low productivity of the organization. Our interviewee, the
HR manager stated that- “We were unable to give effective training and development facilities to
our employees. This lead to low productivity. It causes negative impacts on the economic
condition of our firms”.

The covid-19 situation grow the increase of underemployment. Of the people who join in the
company, the HR manager analyzed that some of them were not willing to came in this field.

8
Their desire work was another. But because of the economic condition they joined the job. So it
affects negatively in the economic situation of the firm.

At last, when we asked about the possible solution or how the company or managers tried to
overcome or face those challenges. The HR manager stated-“ It is not possible for any individual
body to face all those challenges. And this also can not change overnight. Our employees of this
organization give us their patience and with the support of all employees we survived. Actually,
still we are facing some challenges, but we tackled them by working together and setting and
focusing on short term goals by taking opinions of all level of employees. We pay attention to
our Liquid Savings, make a well Budget plans, getting small bank loan etc.”

So from our analysis we have find out that FinSource company faces serious economics
challenges like other companies. But they try their level best to overcome the situation. Many
measure are taken to face the sudden economic challenges of the company. Which include-
focusing on the short term goals to earn profits, pay more attention on the companies budget and
liquid saving, effectively distribute the companies wealth, effective budget plan.

Chapter- 05

Implications of the study

During the Covid-19 period, the usual activities of whole world became stuck overnight. A big
percentage of people lose their job, business activities were hampered which results in a global
economic crisis. Normal and usual activities of various organizations were in a threat condition.
Like other functional areas of organizations, human resource department also faced challenges in
their works. Our concerned company “FinSource Limited” also faced different economic
challenges like cost of employee benefit, low productivity, underemployment, trading related
problems with neighboring countries, change in inflation rate etc. we have already mentioned in
our report. A overall life risk situation was present in that time that’s why it was not possible for

9
the employees to perform their work physically. As a result, managers of multinational
organizations turned their working activities into virtual process. They guided their employees
through online communication like video conferencing. That time “working from home” term
was more popular where employees were ordered to attend in office from home. All the
managerial activities were performed from home through a virtual system. Even international
managerial meeting were done through video conferencing where managerial persons of
different countries were joined from their country. As a result, a cross-cultural relationship
across boundaries were developed. Moreover, job exams, interviews, training, and development,
etc. other recruitment and selection process were also executed in this virtual way.

Though the HR professionals connected their employees virtually, but the companies didn’t
provide proper facilities to their employees due to the poor economic conditions. Many
employees are lose their job because companies couldn’t able to give their salaries. It is true that
employees didn’t get salaries, bonus and other economic facilities properly which we have
already found from our FinSource Company’s study. Due to the dollar crisis it was not possible
for companies to open LC and trading with the neighboring partner countries which also hit the
HR professionals. Moreover, human resource functions had not enough budget to train their
employees as a result low productivity occurred due to the unskilled employees. In those
situations, HR professionals altered their working patterns and developed different unique
strategies to overcome this challenges.

Our research study is based on the challenges what the managers faced during Covid-19. Here,
we try to show various economic challenges as well as some HR related challenges which they
executed to guide and lead their subordinates for achieving the organizational goal. So, this
research study may bring a deep and accurate understanding for any researchers. Some insights
or implications of our research study are given below;

 Various multinational organizations can follow our research study because it will guide
their managers how to take challenges in a new situation, how to alter strategies in that
situation.
 This research can aid both private and govt. organizations to improve their experience
and adopting capabilities with a new reality.

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  We have used many author’s quotations, editorials when conducting our study so it may
help any researchers like students, faculties and other parties for conducting their
research study in future.
 During Covid-19, all managerial activities are performed through a virtual process which
we have already mentioned in our report. Here, we have been introduced with new virtual
technologies like Zoom, Google meet, Skype which enhanced our virtual knowledge,
work effectiveness and virtual collaboration.

Chapter-06

Limitation and Conclusion

Limitations:

In our report, we try to represents the economic challenges which HR faced during the Covid-19
pandemic. Their HR related activities are hampered due to the economic crisis. We try to
represent the whole scenario but actually it is not possible to show all aspects. As usual we face
some problems when we conducting our report. These problems or limitations are given below;

 Due to time limitations we can’t represent a lot of aspects which are related to our study.
 There are a lot of online materials regarding our report topics but is not possible to use all
of these sources. So, we use some online materials, websites etc. as a sample when
conducting our study.
 In our report, we made a questionnaire based on informal discussion with the employees
of “FinSource Limited” company. As it is a company, they didn’t provide us sufficient
information because some information is confidential.
 In the case of collecting primary data, we can only use the questionnaire method, whereas
other data collection methods are not used.
 Some websites are highly paid that’s why we can’t download articles and other necessary
online materials from those websites. Like other students, we have also scarcity of
financial resources.

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 Chapter-6

Conclusion

According to business leaders, the success of an organization depends on attracting, retaining,

engaging and managing human resource talents. Here, the human resource professionals play a
significant role to deal with human resource talents and their spot challenge is to find and
develop potential business leaders through their human resource activities and skills. But, the
sudden outbreak of covid-19 hit all the sectors as well as human resource management. The
whole world become stuck, economic conditions were faced in risk and uncertainty. Change in
inflation rate, problems regarding trading, low productivity, cost of employee benefit,
underemployment etc. economic threats were faced by HR professionals. They developed
different strategies and modified their working patterns to counter this economic crisis. As a
result, they overcame anyhow. But, this is not satisfactory. Now, the Covid-19 is over but still
they face many problems regarding their activities due to the poor economic condition which are
the result of Covid-19. So, struggling with this situation is a great challenge of HR professionals.

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Appendix
Interview Questions:
14
 SL. Interview Questions
i.
When have you started working in formal workplace?

ii. How long have you been working with your current organization?

iii. How long have you been working as a manager/ engaged with managerial role?

iv. Can you please briefly explain your key responsibilities?

v. What do you think about the key challenges faced by the firms?

vi. Can you specify or point out some economic challenges faces by the firms.

vii. Do covid-19 impact on the economic condition of the firm?

viii. What could be your suggestions to face these types of challenges?

15