Bank jobs: 1,011 junior staff out, 6,486 contract staff in

ABATAN ADEWALE

CBN Governor Emefiele

A recruitment shift seems to be taking place in the banking industry as permanent jobs are being swept away and replaced with contract appointments. This is coming in the heels of increasing high cost of operations, tight regulatory headwinds and hostile operating environment which have put the industry under severe constraints.

An assessment report released by the National Bureau of Statistics (NBS) on the banking industry titled “Selected Banking Sector Data” for the Q3 of this year reveals that in this period staffing in the industry grew to a cumulative 81,752 from 77,096 in the Q1. Employment picked up in the industry almost immediately as the economy exited recession, which happened in the Q2.

The economic recession hit most banks on several fronts, ranging from a record high bad loan (non-performing loans) of N1.02 trillion to a decline in income from importing financing. All these tied together led to the decline of banks’ income to 54.3 percent in the first half of 2016 from 63.8 percent in December 2015, according to CBN. In view of the dwindling revenue and the impact of loan loss on their institutions, banks resorted to operation cost cutting measures.

One of which was staff retrenchment. The first two quarters of this year NBS reports on banks indicate that a total number of 3,089 banks’ staff lost their jobs.  Between Q1 and Q2, 13 top bank executives lost their jobs; 657 senior level staff and 2419 junior level staff, who suffered the most jobs casualty. At this time, job loss cut across all the cadre of employees in the banking sector, except contract staff.

In the wake of the economic turnaround and the consequent growth in banks’ recruitment, sources told Business Hallmark that the “reaction” of banks to the reality of the country’s economy is more or less a new phenomenon, given bank is a secondary activity in any society.

“This is simple logic: just look around you, banks are more easily found in places where there are meaningful commercial activities. Without trade and commerce banks have no useful role in a society. Economic recession is a measure of decline in gross domestic product (GDP). So what recession does, in essence, is to upset and drag commercial activities in goods and services markets over a period of time.

“Hence, the country’s exit from recession removed the brake on trading both for the investors and consumers, which is the basic means for banks’ liquidity because at this time corporate and retail liabilities of banks will begin to rise. Therefore more hands, expectedly, would be required by the banks to do the job,” one source said, who requested anonymity.

However, the breakdown of the reported employment growth shows that contract staff is the only cadre that witnessed real numeric growth in staff strength, followed by the top executive, between Q1 and Q3. In Q1 top executive had 174 employees, and increased to 197 by the Q3; senior level staff strength was 20483 as at Q1, but decreased to 20420 by Q3; junior level staff was 36202 in Q1, dropping to 35,191 by Q3; contract staff was 20237, and rose to 26723 by Q3.

Even to the Q3, banks have been recruiting more people as contract staff since the first quarter of 2017. And by the Q3 the number of bank employees in this category has risen by 32.1 percent from Q1. According to NBS, contract staff employment rate is the highest for all the reported three quarters of this year. Its Q-on-Q growth stood at 22.37 percent.

The growing rate of contract staff absorption into the banking industry, while the number of their permanent counterparts is being whittled down, will most likely place them in a position of taking critical decisions on behalf of the banks, which “exposes them [banks] to fraud”, said ‘Dipo Fatokun, CBN Director, Banking and Payments System Department.

“A temporary staff may not have a stake in the bank, so to say. So, it is encouraged that if they have staff that are not permanent, they should not give them responsibilities or roles that will expose them to critical functions of a bank,” he said.

Adding that “If you are giving somebody an authority to approve transactions of high magnitude, and he does not have a stake in your bank, then you are already exposing yourself. Unfortunately this has been going on, and that’s one of the reasons fraud attempts have been rising. But I believe many banks understand the need to rely on their key staff for major duties.”

But Adedeji Thomas, a former banker and veteran economist, discounted the fears of Mr. Fatokun. Even so, he admitted that some contract staff may attempt to game the system for a few bucks.

“Agreed, contract employees are temporary workers since they are not entitled to packages like 13-month salary, bonuses, pension and others; also, since they are being recruited through an agency they tend not to get quality training for the job. And they’re mostly recruited as tellers, customer care agents, etc. But, if at all, their downsides can be felt majorly in the quality of service delivery, since they interface more with customers,” Thomas argued.

He concluded that the reason banks are employing more of contract staff nowadays is basically to cut cost. National Union of Banks Insurance and Financial Institution Employees (NUBIFIE) didn’t respond to requests for comments.