Employee Training and Operational Risks: The Case of RMG Sector in Bangladesh

Noor-E-Hasnin and Moinul Ahsan

The Ready Made Garments (RMG) industry of Bangladesh evolved over the notion of producing quality products in mass scale by maintaining low costs, providing a competitive edge over the competitors in the global RMG sector. However in recent times this industry went through a paradigm shift and the global customers & regulators are increasingly shifting their focus towards a sustainable business growth, maintaining quality outputs and ensuring a positive impact on the society. A number of studies have been undertaken in the past exploring the challenges faced by the RMG sector in Bangladesh, but there were only few comprehensive studies that used contemporary concepts like Operational Risk to identify and pin-point the root cause of potential failure points. The objective of this paper is to understand the root causes for potential Operational Risks that can arise from the internal factors, particularly from people & process, and how an effective Human Resource Management via investing in employee training can eventually reduce operational risks and contribute to profitability of the organization. 50 (fifty) floor level workers from 5 (five) different RMG firms, established in and around Dhaka city were interviewed faced to face during the months of September to December 2015 on the basis of a standard set of questions, and based on the responses, a positive relationship has been established between employee training and alleviation of operational risk, in this industry.