Bangladesh’s HR practices relied heavily on paper-based personnel administration. However, with changing trends, HR functions in Bangladesh now occupy a crucial, strategic role in driving organizational performance. Regulatory changes in the Bangladesh Labour Act and its amendments have elevated the importance of compliance, workers’ rights, and fair employment practices.
In this article, you will explore how HR practices have evolved in Bangladesh and examine the legal and regulatory frameworks that shape it. We will also discuss the core functions that underpin effective HR management in today’s competitive market.
How Have HR Practices Evolved in Bangladesh Over Time?
HR practices in various industries in Bangladesh were influenced by political interference, globalization, and industrial growth. Before the Liberation War of 1971, most organizations lagged in structured HR practices. Employee records were kept manually. And, basic bookkeeping handled wage distribution. Recruitment primarily depended on personal networks, references from family and friends, or community leaders. No training programs were organized as the workers typically acquired skills on the job.
After 1971, Public-sector entities expanded rapidly, offering extensive job security and seniority-based promotions. The period saw some formal HR functions, like record-keeping and structured pay scales. However, these processes were often bureaucratic. For instance, hiring in many government institutions was based on top-down approval processes. This approach gave limited autonomy to HR managers.
During the 1980s and 1990s, the export-oriented industries like the ready-made garments (RMG) sector started rising to prominence. International buyers demanded better working conditions, compliance with global labor standards, and transparent pay systems.
Also, Bangladesh saw a rapid expansion in internet connectivity in the late 2000s and early 2010s. Many organizations started using digital HR information systems (HRIS) and applicant tracking systems (ATS).
What Are the Key Legal and Regulatory Factors That Impact HR Practices?
Bangladeshi organizations implement HR practices as prescribed in the local labor act, government regulations, and international labor standards. Employers must comply with these sources to ensure worker rights and welfare. This also helps organizations maintain credibility with global and local stakeholders.
Key Labor Laws and Policies
The Bangladesh Labour Act (BLA) of 2006 is the primary source of regulating employment conditions, wages, working hours, leave policies, trade unions, and workplace safety. It consists of over 25 labor laws that regulate private organizations. The Bangladesh Labour Rules 2015 details guidelines for the implementation of the Labour Act 2006.
The provisions and clauses offer regulations on the following key matters.
- appointment letters,
- payment of wages,
- maternity benefits,
- collective bargaining agents,
- child labor restrictions, and
- dispute resolution.
Important amendments were made as follows:
- Amendments of 2013 and 2018: Introduced in response to industrial accidents (e.g., the Rana Plaza collapse) and global pressure, these amendments strengthened worker safety provisions, streamlined trade union registration processes, and improved maternity benefits.
- Safety and Compliance Upgrades: The Amendments introduced stricter requirements for factory inspections and compliance audits, often supervised by international buyers, particularly in the Ready-Made Garments (RMG) sector.
Regulatory Bodies and Compliance
The Ministry of Labour and Employment (MoLE) enforces labor policies and coordinates with other government bodies for enhanced worker conditions. MoLE aligns with the International Labour Organization (ILO) and various NGOs to help develop local labor standards with global best practices.
The Department of Inspection for Factories and Establishments (DIFE) ensures inspections and compliance checks on-site. DIFE inspectors visit workplaces to check their practices. They assess the safety regulations, wage standards, and employee welfare of the organizations.
Many foreign investors or stakeholders require compliance certificates from DIFE Inspectors before finalizing contracts in sectors like RMG.
Then, there are the Labor Courts that handle cases related to wage disputes, wrongful termination, discrimination, and other workplace conflicts. They help clarify loopholes in labor laws. This helps HR departments apply the provisions properly. There are 14 labor courts in 10 districts in the country.
Many industrial setups have Trade Unions and Worker Associations. The Unions negotiate on behalf of workers for better wages, benefits, and working conditions. This process is called Collective Bargaining.
As per the BLA 2006, HR departments in large factories and corporations must collaborate with union representatives when formulating or changing policies.
Employee Rights and Protections
The Minimum Wage Board, established under BLA 2006, reviews wages for different sectors. In 2018, for example, the government raised the minimum wage for RMG workers when worker protests led to international scrutiny.
The BLA sets a maximum of 48 working hours per week. This includes a maximum of 10 hours of overtime. Employers need to compensate for overtime at twice the regular wage rate. HR departments are required to track hours carefully to prevent legal penalties.
Employees receive annual leave after one year of service. Calculated as one leave per 18 days of continuous duty. Entitlements to casual and sick leaves are given to permanent employees, amounting to 10 days and 14 days, respectively. Female workers enjoy up to 16 weeks of paid maternity leave. Some organizations offer more favorable benefits to female workers that add to the maternity benefits.
The Tazreen Fashions fire in 2012 and the Rana Plaza collapse in 2013 led to stricter fire safety and building structure rules. Organizations now must ensure adequate fire exits, ventilation, protective equipment, and regular safety training sessions. Non-compliance can result in factory shutdowns or legal action.
What Are the Core HR Functions in Bangladesh?
Local HR functions are no longer mere administrative tasks. These have become more strategic in nature. Traditional practices like paper-based record-keeping and hierarchical decision-making still persist, particularly in smaller firms. But overall, practices are becoming data-driven, technology-based, and global.
Recruitment, Talent Acquisition and Workforce Planning
Small organizations, startups, or conservative firms follow traditional methods like employee referrals, notice boards, or newspaper ads. Many employers also prefer these methods for blue-collar and entry-level roles. Large corporations and multinational companies, such as Unilever Bangladesh, Grameenphone, or Standard Chartered Bank, use tools and platforms like Applicant Tracking Systems (ATS), Bdjobs.com, LinkedIn, and social media to attract diverse talent pools.
Agencies like Grow n Excel and Pro Edge Associates are becoming more prevalent. They offer executive search and special talent acquisition services. These agencies help in the hiring processes of major sectors like IT, pharmaceuticals, and banking. Multinational firms or conglomerates sometimes prefer retainer head-hunting agencies that specialize in niche hiring.
However, many industries face shortages of skilled professionals, particularly in IT, engineering, data science, and managerial roles. Future-oriented organizations set recruitment strategies with long-term business goals. And avoid the pitfalls of recruitment.
Training, Development and Talent Management
Robi Axiata and BRAC, for instance, offer structured onboarding processes. This includes orientation programs, mentorship, and initial performance reviews. This strategy helps new hires receive early training and quickly adapt to the company culture and role expectations.
Also, many companies now offer online training modules through Learning Management Systems (LMS). This allows for enabling remote skill-building and virtual learning.
Government Initiatives for Skill Development SEIP (Skills for Employment Investment Program) boosts employee development as well. Supported by the Asian Development Bank (ADB) and the Government of Bangladesh, SEIP provides vocational and technical training to youths. This initiative helps them reduce the skill gap in the manufacturing and service sectors.
Plus, under the Digital Bangladesh agenda, the ICT Division collaborated with private-sector partners to deliver coding boot camps, freelancing training, and workshops on emerging technologies like AI, cybersecurity, and blockchain.
Besides these, conglomerates like Apex Footwear, MGI, City Group, etc. often carry out internal programs to identify high-potential future managers. These programs consist of advanced training in project management, team leadership, and/or strategic planning.
They identify future leaders through performance evaluations, 360-degree feedback, and mentorship. This helps them spot individuals with leadership potential early on. After that, they offer career advancement opportunities as a proven retention strategy, reducing turnover in competitive sectors.
Performance Management
Larger enterprises and MNCs typically use balanced scorecards, key performance indicators (KPIs), and peer reviews to assess employees. These form the 360-degree evaluation.
A good example would be Grameenphone’s performance management system. It incorporates quarterly reviews tied to both individual and organizational goals.
A popular performance appraisal system in banking and telecom industries, MBO (Management by Objectives) sets clear, measurable objectives aligned with departmental and corporate strategies. Here, you get quantifiable metrics (e.g., new account sign-ups, call drop rates, etc.) that are readily available.
Effective performance management focuses on rating employees. It also identifies learning gaps. Organizations like BRAC integrate coaching sessions into appraisal cycles, enabling managers to address skill deficiencies promptly.
Some MNCs offer individual development plans (IDPs). Top performers receive guidance on leadership, certifications, or cross-functional exposure. This often feeds into succession planning.
Wage Structures, Employee Benefits and Executive Compensation
The Government of Bangladesh sets the minimum wages for various sectors. However, smaller industries or firms find it difficult to comply.
Sales and marketing roles offer commission-based variable pay. While managers and executives may receive performance bonuses or profit-sharing options. For instance, employees in top positions in financial institutions get annual bonuses tied to risk management and profitability metrics.
Benefits packages for employees can include health insurance, provident funds, gratuities, and festival bonuses. Many multinational companies offer health insurance and wellness programs to enhance workforce morale and loyalty.
Also, some top organizations have begun introducing mental health support, flexible working arrangements, and family-friendly policies. These reflect global HR trends of work-life balance.
Employee Relations, Engagement and Organizational Culture
Workplace communications like Town Halls and Open-Door Policies let senior leadership inform employees about business performance, strategic changes, and success stories. This is common in large corporations and even in some tech startups. Also, some firms virtually address grievances or suggest performance improvements.
Traditional local firms maintain strict hierarchies or a centralized system. On the other hand, startups and nascent companies adopt flat structures and encourage open dialogue.
HR plays a vital role in managing employee mental issues during mergers, acquisitions, or digital transformations. HR personnel facilitate smooth transitions via workshops, communication campaigns, and leadership development.
HR also ensures domestic inquiries and conflict resolution. As per the Bangladesh Labour Act (2006), organizations must have clear disciplinary processes. HR departments act as mediators between management and workers or union representatives.
HR must also prevent labor unrest. In industrial setups, Trade Unions and Collective Bargaining Agents address issues like late payments or unsafe working conditions. Enabling this right minimizes labor disputes.
Diversity, Equity and Inclusion (DEI)
Women now comprise a substantial portion of the RMG workforce. However, they are still in the minority in leadership positions. NGOs and development partners (e.g., CARE Bangladesh) often run programs to empower women in production and supervisory roles.
Major enterprises are increasingly promoting female employees to managerial roles. For example, BRAC Bank’s “Tara” program focuses on developing female leadership through mentorship and networking events.
Cultural expectations like prioritizing family and taking care of children can restrict women’s career progression. Many organizations lack policies for childcare or flexible work arrangements, hindering mothers’ participation in the workforce.
Plus, people in the minority often cannot participate in the recruitment process. Also, people with disabilities fail to access office accommodation properly.
How Do HR Practices Vary Across Different Industries in Bangladesh?
Industry-specific contexts—economic pressures, global partnerships, and workforce characteristics—drive unique HR requirements and strategies.
Ready-Made Garments (RMG) Sector
After the 2013 Rana Plaza debacle, many reforms saw global brands requiring suppliers to meet Accord or Alliance standards. Factories that meet these standards often publicize their certification to attract new buyers.
Workers in large RMG factories (e.g., Ha-Meem Group or Epyllion Group) may be unionized, leading to more structured negotiations on wage increments and safety protocols.
Information Technology (IT) and Tech Sector
Bangladeshi tech companies like Vivasoft, Datasoft, brainstation 23 or software wings of telecom operators frequently compete with international firms for top developers and data scientists. They sometimes offer remote or hybrid work to attract diaspora talent, also.
And then there is the Gig Economy and Freelancers. Platforms like Upwork or Fiverr have become increasingly popular. Many Bangladesh-based freelancers specialize in graphic design, software development, and content writing.
HR teams in tech startups often adopt flexible policies to accommodate gig workers.
Banking and Financial Sector
The Bangladesh Bank imposes strict rules on hiring and background checks. For example, anti-money laundering (AML) training is mandatory for employees dealing with financial transactions.
Many local banks collaborate with the Bangladesh Institute of Bank Management (BIBM) to ensure employees receive ongoing training. Topics include risk management, corporate governance, and emerging digital banking solutions.
Small and Medium Enterprises (SMEs)
These types of firms typically implement informal HR Practices. For example, an SME producing handicrafts might use a paper-based system for attendance and wages, relying on minimal formal procedures.
To attract funding and expand, some SMEs (especially in Dhaka and Chittagong) have started to implement standardized HR practices. Investing in HR software and structured training programs, SMEs are expediting their processes.
What Are the Key Challenges Faced in HR Practices in Bangladesh?
Complex labor laws, tax regulations, and employment standards create issues for HR professionals. You need to stay constantly updated about the amendments. Many local companies struggle to retain talent in competitive industries like technology and FMCG. Global firms often attract top talent with attractive packages and remote work. This adversely affects productivity. You also lose out on long-term strategic initiatives.
Another issue arises when globalization, technology, and market dynamics trigger companies to change rapidly. However, resistance to change and poor support systems hinder progress. Also, promoting Diversity, Equity, and Inclusion (DEI) in company culture is challenging. Socio-cultural norms and biases make it hard to promote an inclusive workplace.
A great way to tackle these HR challenges and issues is by using modern HR software solutions. HR software eases the problems by automating the functions. It also provides real-time data access and analytics, helping in decision-making for talent retention. Additionally, HR software can help with unbiased recruitment processes and comprehensive training modules.
Final Words
HR practices in Bangladesh have certainly evolved. From simple, document-centric approaches to more holistic, technology-driven strategies, the HR scene in Bangladesh has come a long way. Ongoing regulatory reforms increased global exposure, and the ambitions of a burgeoning local business landscape all fuel the continued advancement of HR.
Statista reports that the software market in Bangladesh is anticipated to experience a steady annual growth rate of 10.73% between 2025 and 2029. So, adaptive, inclusive, and tech-based HR practices will enhance the HR practices of local firms.
