The Role of Effective Management Strategies in the Ready-Made Garments (RMG) Sector in Bangladesh

The Role of Effective Management Strategies in the Ready-Made Garments (RMG) Sector in Bangladesh

Md Mahmudul Hasan

Lincoln University College, Malaysia

DOI: https://doi.org/10.51584/IJRIAS.2025.1001015

Received: 26 December 2024; Accepted: 30 December 2024; Published: 04 February 2025

ABSTRACT

The ready-made garments sector in Bangladesh has seen significant growth in recent decades across multiple dimensions; nonetheless, the quality of domestically produced items continues to raise concerns. The BGMEA report (2014) reveals that the RMG sector makes up around 40% of manufacturing, comprises 50% of the total workers, and accounts for 78% of the total earnings from exports from these sectors. A substantial portion of the workforce in the RMG sector consists of women, representing about 90%, with roughly 4.2 million individuals engaged in this industry. Nevertheless, the possibility for development and progress in the ready-made garments sector in Bangladesh is large. To leverage these opportunities, it is crucial to prioritise the effective implementation of management policies that prioritise excellence and feedback. In today’s knowledge-based economy, effective management strategies are crucial, as the success and efficiency of organisations heavily depend on their ability to leverage this reserve, particularly in the garment industries of Bangladesh.  However, the current situation for these industries indicates that the employees remain underestimated, not properly trained, and underutilised. Insufficient management practices in the RMG sector contribute to the elevated incidence of labour unrest, resulting in employee productivity levels that fall short of competitors. With the RMG sector emerging as a key area for investment, it is essential to focus on enhancing and sustaining the growth of garment companies. Effective management is essential and requires increased focus within the Bangladesh RMG sector. The current research indicates a lack of adequate attention to management practices, necessitating evaluation and analysis to improve quality performance in Bangladesh’s RMG industry. Efficient management in this area is essential for industrial expansion and attaining a lasting competitive edge in these industries.

Keywords: Effective Management, Performance, Productivity, RMG industries, Bangladesh

INTRODUCTION

Bangladesh ranks second globally in the production of ready-made clothing. Bangladesh accounted for around 60% of export contracts with European clients and the remaining 40% with American buyers. Local investors dominate the production and manufacturing of clothing companies, while international investors account for barely 5% of ownership. Especially in a situation where the World Bank asserts that “you either export or die” according to (Custers, 1997), this sector serves as the primary source of income for the national economy. According to Chowdhury, M. A., 2023 statistics, the garments manufacturing industry in Bangladesh is expanding at a rate of twenty percent each year. Bangladesh exemplifies the most economical and cost-effective use of human resources in the industrial sector. The Bangladesh garments sector is predominantly labour-intensive rather than technology-driven, as it benefits from the lowest labour costs, averaging only $0.30 per hour (Rashid, F., Taib, C., Zien Yusoff, R., Ahmad, M., & Hj, A., 2020).  It is significant to highlight that since 1985, the growth rate of Bangladesh’s RMG industry has been outstanding due to several advantages and opportunities, including MFA, quotas, and GSP (Raihan, S., 2020).

According to Taib, Mohammed, Iteng, and Lazim (2018), the future of this industry is completely dependent on the efficient use of its people. Despite the fact that young women make up the majority of the workforce in the RMG sector, the average age of these women is significantly lower than thirty years old (Kader, S. A., Zayed, N. M., Khan, S., Islam, K. A., & Siddiki, M. N. A., 2019). The RMG sector in Bangladesh needs to prioritise the effective execution of HR policies to enhance quality performance (Rashid, F., Taib, C., Zien Yusoff, R., Ahmad, M., & Hj, A., 2019).  The success and quality goal achievement of each organisation largely hinge on the capabilities of its human resources (Mahapatro, B., 2021).  In this context, Sarker, M. (2024), emphasises the necessity for a comprehensive examination of human resource management practices within manufacturing industries, particularly the Bangladesh RMG sector, in light of the evolving technological landscape.  HRM practices are crucial for achieving and maintaining quality performance within an organisation.  Consequently, the efficient use of human resources stands as the primary challenge and prerequisite for achieving success in organisational business endeavours (Rashid, F., Taib, C.A., Zien Yusoff, R., Ahmad, M., & Hj, A., 2019).  The problems found in HRM practices in the Bangladesh RMG sector are part of a larger conversation about how to make businesses more competitive, which is still being talked about in both theoretical and empirical research (Faysal, N. M., 2021). This study is necessary to address this expectation and bridge the existing research gap.

At present, the ready-made garment sector in Bangladesh faces significant challenges stemming from the dynamics of an open market-based economy, instant high-tech advancements, and ongoing shifts in consumer preferences (Junayed, A., & Akter, F., 2023). The needs listed show how important it is for the whole system to be consistent. This includes the dependability of high-level human capital, machinery, equipment, big management systems, extra processes that add value, and management functions throughout the industrial system (van Rhijn, G., & Bosch, T., 2017). The abilities of each organisation’s human capitals significantly influence its success and the achievement of quality goals (Budhwar, P., Varma, A., & Hirekhan, M., 2018). The RMG sector in Bangladesh needs to prioritise effective HR policy execution to enhance quality performance (Faysal, N. M., 2021).  The RMG industry remains labour-intensive, highlighting the necessity for effective HRM practices to maintain output quality while balancing duration and cost, despite advancements in technology (BGMEA, 2015). Over time, these factors have adversely affected efficiency, cost-effectiveness, and assurance, subsequently impacting organisational performance, timing, and cost.  This research aims to develop a systematic framework for enhancing human resource management in various companies across Bangladesh. The emphasis lies on formulating appropriate policies aimed at enhancing organisational performance and ensuring a sustainable competitive edge.  (Khan, T., Emon, M. M. H., & Siam, S. A. J., 2024).

The findings of this articles will provide value in both theoretical and practical contexts. The current study provides important insights for practitioners due to its substantial managerial relevance. This research will provide valuable insights into the diverse functions of TQM and HRM within the Bangladesh garments sector. This study’s findings will offer significant insights for the government and various organisations in Bangladesh that are currently executing HRM practices, as well as for those seeking to integrate such practices into their systems. The aim is to improve performance and secure a lasting competitive edge for their enterprises (Alqarni et al., 2023).

Objectives of the Study

• To comprehend and evaluate the significance of efficient management practices within the RMG industry of Bangladesh
• To identify the challenges or issues related to good management practices
• To propose methods and strategies for enhancing policies and practices in efficient management

METHODOLOGY

Without the approach, any research project will not be considered scientific or successful. Without it, no research endeavour can be considered successful. The term “methodology” refers to a set of defined norms and procedures that serve as the foundation for research and serve as a benchmark against which allegations of knowledge are evaluated. The following principles and techniques are followed in order to make the process of data collection easier. This is because methodology is generally concerned with the generation of data, the presentation of data, and the analysis of data.

LITERATURE REVIEW

Akinwale, O. E., Akinwale, O. E., & Durojaiye, O. J. (2024) state that “HRM practices can contribute to superior productivity by improving the quality of employees’ work life.” At this juncture, as noted by Absar (2014), the absence of suitable HRM practices tends to elevate turnover rates, diminish productivity levels, and contribute to significant job dissatisfaction among employees. Conversely, the effective application of HRM practices plays a crucial role in enhancing overall organisational performance and fostering growth. Consequently, as noted by De Winne et al. (2019), a high turnover rate serves as an unfavourable indicator within the workforce, impacting employee performance and productivity. High turnover consistently results in production gaps, as new skills must be cultivated when skilled performers depart. The process of developing these new skills to bridge the gap is invariably expensive (Tulgan, B., 2015). Absar (2014) indicated that, “due to the absence of effective HR policies and procedures, labour-intensive manufacturing firms are experiencing a shortage of workers and high job turnover in developing countries like Bangladesh.”

Consequently, the inadequacy of HRM practices consistently impacts organisational competitiveness, as the workforce is the primary determinant of quality performance. Human resources view inadequate manpower planning as a crucial factor, contributing to both workforce shortages and surpluses. This situation highlights the discrepancies between HRM practices and the objectives of companies (Cappelli, P., 2014). Absar (2014) indicates that human resource management practices play a vital role in enhancing organisational performance and achieving competitive advantage.  However, it is noteworthy that a disappointingly small number of studies have been conducted in this area, particularly in relation to the Bangladesh RMG sector. This study examines the recognised knowledge gap. Hossan, Rahman, and Rumana (2012) underscore the noteworthy growth rate of this sector in Bangladesh; however, the RMG sector’s workforce remains undervalued, undertrained, and underutilised. The opportunities for expansion and future developments in Bangladesh’s RMG sector are significant. To leverage these opportunities, there should be a focus on the effective implementation of HR policies that emphasise quality performance. Pfeffer (1994) presented 16 HR practices that exemplify best practice. In the context of the ready-made garments industry in Bangladesh, this study examines four specific HRM practices: recruitment and selection, job analysis, manpower planning, and the Equal Employment Opportunity Act (EEOA). The primary objective of the recruitment and selection process is to identify the most suitable individual for each specific role. Mládková (2012) states that “workers must be able and willing to cooperate, communicate, and accept the way of sharing their knowledge (skills, abilities, and experiences) based on reciprocity, reputation, and altruism.” Hasan, M. T. (2022), emphasised in his study that some authors propose more general, implicit, and less formalised selection criteria.   In Bangladesh’s ready-made garments sector, the absence of clearly defined recruitment and selection policies significantly impacts employee turnover and overall competitiveness.

Conversely, Mahapatro, B. (2021) articulated that “manpower planning is the process—including forecasting, developing, and controlling—by which a firm ensures that it has the right number of people, the right kind of people, at the right places, at the right time, doing work for which they are economically most useful.” Manpower planning involves determining the ideal size of the workforce, designing suitable training programs, creating effective compensation systems, and envisioning future workforce management strategies. The RMG sector in Bangladesh strongly advocates for these elements within the context of Total Quality Management practices. According to UDDIN, Islam, and Uddin (2022), the majority of Bangladeshi garment factories disregard worker rights and safety, allow unsafe working conditions, and have weak laws that discourage fair labour practices. Stakeholders also play a limited role in ensuring compliance. “Social compliance in the RMG industry is a crucial need for the majority of the world’s garment buyers.” It ensures the protection of labour rights, standards, fair labour practices, and a code of conduct.  (Islam, T., & Halim, M. A., 2022). To maintain elevated standards and attain sustainability in Bangladesh’s RMG sector, it is essential to concentrate on the EEO approach to mitigate labour unrest and improve quality performance.  Examining job roles is essential for the successful application of HR practices in organisations.  Touma, J. (2022) emphasises that job analysis, in conjunction with performance management, compensation, recognition, and reward, plays a vital role in a thorough evaluation of organisational performance. Consequently, as noted by Submitter et al. (2021), job analysis emphasises individual skills and competencies, which are crucial for empowering employees, particularly in the context of implementing total quality management (TQM).  Lastly, assessing job fitness is an integral component of the job analysis process, encompassing change management, job classification, creativity, job design, and job rotation. This study emphasises the need for a deeper focus on job analysis within the Bangladesh ready-made garments sector to achieve a sustainable competitive edge through the implementation of Total Quality Management.

Absar (2014) noted that the Bangladesh RMG sector did not sufficiently recognise and prioritise HRM practices. Current literature highlights the largely overlooked nature of HR practices, emphasising the need for measurement and analysis to improve quality performance in Bangladesh’s RMG sector. In this sector, the workforce acts as a vital asset for industrial advancement and the long-term viability of businesses. This investigation is crucial to meet this expectation and close the current research gap. This investigation will aid decision-makers and governmental bodies in formulating and implementing workforce policies, as the productivity of the labour force and the optimal utilisation of cost-effective labour are vital for the RMG sector in Bangladesh.

Management in the Bangladesh Rgm Industries

Bangladesh’s RMG sector made a substantial contribution to the economic development of the nation. The apparel manufacturing industry in Bangladesh is expanding at a rate of 20% each year (Chowdhury, M. A., 2023), with around 76% of export revenues derived from the ready-made garment sector (BEPB, 2015). Currently, this industry employs 4.2 million people across 4,490 operational industrial units (BGMEA, 2015).

Each organisation’s ability to succeed and meet its quality objectives is primarily dependent on its human resource capabilities. RMG companies in Bangladesh frequently prioritise cost reductions over providing their staff with proper training.  However, attaining high-quality performance requires skill development and training. As a result, the staff productivity rate is lower than that of competitors. With 69 million people, Bangladesh has the seventh largest workforce in the world. There are plenty of chances for the RMG industry in Bangladesh to expand and prosper. It is crucial to focus on the appropriate implementation of HR policies that emphasise quality performance in order to take advantage of these opportunities.  A study on the RMG sector underscores the need to boost worker productivity in ready-made garment enterprises by implementing effective HRM practices. The RMG sector in Bangladesh encounters significant challenges due to globalisation.  Several factors, such as unsystematic recruitment and selection processes, a lack of training facilities, insufficient financial resources, and a generally low level of worker motivation, contribute to the low productivity of labourers.

The state of the RMG sector in Bangladesh is worrisome because of the inadequate implementation of HRM practices, which has led to numerous issues. The oversight of junior staff typically falls to line supervisors, who often lack expertise in employee management. These supervisors frequently do not receive adequate training, are not well-versed in compliance regulations, and may not be familiar with HR policies and procedures. Often, the inefficiency of employees leads to feelings of demotivation and dissatisfaction, ultimately impacting the quality of their performance. Numerous clothing companies lack a well-defined human resources department. Human resources departments are actively involved in the development and execution of policies, regulations, and practices, fostering employee motivation, which is vital for success in Bangladesh’s ready-made garment business.  The working conditions in the RMG industry are inadequate, with numerous factories lacking specialised HRM units and providing insufficient safeguards for workers’ rights. Ahamed (2013) observed that the absence of a human resources role in the ready-made garment sector results in difficulties for employees. Automatic machinery equips the bulk of ready-made garment factories in Bangladesh. The lack of adequate education, skills, and technical knowledge among workers can lead to mishaps resulting in fatalities or injuries (BGMEA, 2015). The RMG sector of Bangladesh lacks suitable HR policies, and the absence of an HR unit within organisations has left a significant number of garment employees unaware of and unfamiliar with industrial relations rules and regulations. The selection of the RMG sector as the focus of this study is significant for future investigation, given the substantial research gap that currently exists.

The environment of employment in the RMG sector exhibits significant deficiencies, particularly concerning health, safety, and overall work conditions. Consequently, individuals frequently experience illness and sustain injuries, or in some cases, lose their lives. The HRM Department safeguards employees’ rights and strives to enhance working conditions within the organisation. Mondy and Noe articulated that safety involves safeguarding employees from injuries resulting from work-related accidents and health issues while also ensuring that employees remain free from physical or emotional ailments. The lack of HR functions in the RMG sector may contribute to significant labour unrest. In this regard, accidents in the RMG sector of Bangladesh are prevalent, and the absence of EEOA practices results in inadequate care for employees. This situation leads to demotivation among workers and contributes to labour unrest, significantly impacting overall quality performance. (BGMEA, 2014).

Typically, most small companies in the Bangladesh RMG sector, particularly those with fewer than 100 members, do not have an HR unit (Rashid et al., 2019). The establishment of HR departments in the RMG sector of Bangladesh holds significant potential for enhancing productivity and ensuring sustainability. Improper HRM practices have significantly hindered the sustainability and competitiveness of the ready-made garments industry in Bangladesh. There exists a gap in the implementation of HR practices within the RMG sector of Bangladesh.

Sampling Design

The projected sampling area for this report was 780, with 50 respondents making up the sample size. The participants in the sample consisted of the employees and workers of BHT Garments Ltd. It is specified that the “Simple Random Sampling Method” has been utilised. The study selected a sample size of 50 from a total of 780 employees and workers across two factories and the head office. The maximum potential sample size will be 50. This will assist me in identifying and addressing the issue in a practical manner.

Table 1: Management appreciates your consultative role

The data presented in table-1 indicates that 26% of employees believe that management consistently acknowledges their consultative role. Conversely, it is also observed that 10% of respondents remained neutral regarding their opinions on this matter. Nonetheless, 16% of employees strongly affirmed that management values their consultative role. Conversely, 12% of incumbents expressed disagreement with this assertion, while a significant portion, 36%, strongly opposed the statement regarding management’s appreciation of the consultative role. This scenario indicates a lack of appreciation from the organisation towards employee participation, which may hinder the development of a sense of ownership among employees.

Table 2: Promotions are fairly administered consistently

Table-2 indicates that 30% among staff members think that promotions are occurring fairly on a consistent basis, whereas only 10% of incumbents express high satisfaction with the organisation’s promotion policy. Consequently, 20% of respondents remained undecided, while 16% of employees expressed that promotions are not occurring effectively, as they strongly disagreed with the statement. However, 24% of incumbents expressed disagreement with the statement. It appears that a significant number of employees express dissatisfaction with the promotion strategy, indicating that BHT’s promotion policy may not be effective in retaining skilled individuals.

Table 3: Your organisation provides fair wages and salary

Table-3: In discussing the fair wages and salary of BHT Garments Ltd, it is evident that 10% of the employee’s expressed satisfaction with the salary structure, while 50% of respondents indicated their agreement that the salaries and wages are fair. Nonetheless, 20% of individuals were hesitant to express their views, while another 20% indicated dissatisfaction with the current salary and wages policy. More than half of the total employees express happiness or satisfaction with the overall salary and wage’s structure, while the remainder are either unhappy or dissatisfied with the compensation package.

Table 4: Management always motivates employees

Upon analysing the data presented in table-4, it is evident that a significant portion of employees, specifically 40%, expressed disagreement with the assertion that management consistently motivates them. In contrast, only a small fraction, 8%, strongly agreed with the notion that management always provides motivation to employees. Similarly, 28% of individuals refrained from expressing their opinions regarding the aforementioned statement, while 24% of incumbents concurred that the management’s motivation system is commendable. From this, we can conclude that the management of a selected garments is insufficient to consistently motivate employees, as only 8 per cent of individuals agreed with the statement.

Table 5: You are satisfied with your current job

The data presented in table-5 indicates that 20% of employees expressed satisfaction with their job, while 24% of respondents strongly disagreed with this sentiment, indicating dissatisfaction with their current employment situation. Despite this, only 12% of employees expressed strong agreement regarding their satisfaction with their current job, while 30% disagreed with the aforementioned statement. However, 14% of incumbents refrained from expressing their opinions. The data presented in this pie chart indicates that the individuals employed at BHT exhibit a lack of satisfaction, as evidenced by the aforementioned figures.

FINDINGS

The Garments Industries was established over thirty years ago in our country. Initially, the concept of efficient management practice was not distinctly defined. Over time, the proprietors of garment industries have gained an understanding of efficient management practices, which significantly contribute to organisational development, production growth, and the advancement of human resources. The contemporary method of supervision and efficient human resource management practices actively involves the intelligence, creativity, motivation, and loyalty of employees. This approach often leads to a decrease in absenteeism and turnover, thereby enhancing productivity and the capacity for problem-solving. It is unfortunate that not all organisations adhere to the established rules and regulations effectively to develop efficient management practice overall garments industries.

RECOMMENDATIONS

Not only did the Messenger of Allah, Mohammed (SM) advise all the unambiguous conditions to provide workers and labourers the acknowledgement they deserved, but he also commanded them to make guarantee all of the lawful dues of an employee are paid prior to the perspiration on his brows dried up. Despite their hard effort, the workers were never given the opportunity to enjoy the results of their labour. They laboured so that someone could take pleasure in it. So that another person may get wealthy, they “slaved” After putting in a lot of effort, they are unable to guarantee access to food. There is not a standard of life in place. Their children are unable to receive an education and are forced to participate in child labour. They are unable to receive their salary on schedule. Nevertheless, this circumstance needs to be altered.

CONCLUSION

Despite the remarkable growth rate of the RMG sector in Bangladesh, it is unfortunate that the implementation of HRM practices has not received the attention it deserves from the outset. This study will provide significant advantages for both owners and those involved in policy and decision-making. Based on this investigation, several recommendations emerge: firstly, it is essential to consistently uphold and adhere to appropriate regulations and documentation regarding employee employment. Second, implement a fair wages and compensation policy, avoiding any form of discriminatory payment. Third, it is essential for every employee to offer suitable training opportunities.

Fourth, adhere to and uphold all HRM practices in compliance with the Bangladesh Labour Law 2006. Fifth, it is essential to uphold and legally and ethically justify the working hours and overtime policy. It is essential to provide employees with the opportunity for trade unions and collective bargaining. Seventh, ensure fair and ethical adherence to the “owner-labour-government agreement of 22 & 23rd May, 2006.” Wages and compensation ought to be modified to include incremental payments, taking into account inflation and the importance of work-life balance. Ninth, upheld the necessary and proper regulations regarding workplace safety and security. It is essential to foster a culture of quality while minimising work-related stress and addressing any inappropriate behaviour towards the workforce. finally, ensure adherence to and regularly update “BGMEA & Government rules and regulations.”

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