Casualisation, harsh internal operating
environment, sharp practices scare bright minds
BY KENNETH EZE
A prominent hiring agency, human capital experts, corporate communications experts, serving and former bankers, and young job seekers have observed that fledgling bright minds no longer make banking top priority on their career shopping list.
They finger inflexibility, outsourcing and mindless capitalism which have combined to breed casualisation, harsh internal operating environment, and sharp practices among the factors to be robbing the Nigerian deposit money bank sector of the appeal it once held, with which it charmed the best brains into taking up banking careers.
A 2019 analyses by Jobberman, published in 2020 picked out 22 companies as leading on the choice of places for career pursuits by young bright minds in the Nigerian labour market.
The lure, at the moment going by that analysis, is with the oil and gas sector, which aside taking the first two positions, had four companies on the list with the lowest ranked seventh out of 22.
The sector was represented by Shell, Chevron, NNPC Oil & Gas, and Mobil Producing Unlimited.
Technology (including telecommunications) had five representatives on the elite list, the highest for any sector.
Technology was represented by MTN Nigeria, Andela, Google, Oracle Nigeria, and Tech Experts Nigeria on the elite list.
The fast moving consumer goods sector weighed in with four representatives on the list.
The companies from this segment were Nestle Nigeria, Nigerian Breweries, Unilever Nigeria and Nigerian Bottling Company.
Deposit money banks had three representatives on the list, with Access Bank, ranked 15th being the topmost of the segment. Zenith Bank and First Bank of Nigeria ranked lower on the list.
“Other salient points raised by the bankers is that sustainability has been sacrificed for profitability, with employees frustrated by ‘take it or leave it situations,’ and initiative thrown out of through the window in the banking system
“
What does it signal?
The choice of places to pursue careers by the youth might be telling but not many would have the same interpretation of the signals.
Human capital experts posit that the moment the banks opted for immediate profits by outsourcing ‘core’ human resources, they chose to live daily.
While outsourcing or contracting human capital can be a good idea in business, it must be done strategically, they counselled. Businesses can carefully outsource human resources in peripheral areas, like chauffeurs, domestic hands for executives and salesmen. “It would hurt any business, in the long run, to use the same method to hire for the core areas of businesses,” they asserted.
Rationale being that “Human beings would be less willing to contribute from the heart to any system they perceive does not guarantee their long term interest,” Human Capital Expert, Lydia Ayotamuno, said.
She added that the competition for the best available hands would ensure that the banks could only pick leftovers from the pool of available job seekers at any point time.
Ayotamuno counselled investors in the banking sector to consider balancing profitability with sustainability.
She noted that casual workers and indirect employees can only do much, which might amount to little, particularly in the long run.
“Where such employees are of high quality, they are bound to have divided loyalty,” she added.
Outsourced human capital might find themselves serving different businesses at the same time. This can lead to divided attention, which can cost any business, mostly if the business requires small details.
However, for Chief Executive Officer, BRANDish Media, Ikem Okuhu, the challenges confronting the banks are well beyond attracting the best brains through employment.
Okuhu, whose career path took to the banking as well as the oil and gas sectors said, “If there is a sector in decline, the way we formally knew it, it is banking. Technology is taking over traditional banking and may in the no distant future assume the duties and roles of banks totally.”
A serving management staff of a second generation bank, who spoke to The Point under confidentiality, said, she would factor “skills in demand, capability of the student and interests,” into counseling him/her on the career path to take.
She noted that banks were not remunerating competitively, so could not compete in attracting the best hands.
“Banks remunerate lesser these days especially when the staff is on a contract,” she added.
Okuhu warned that the need for the rethinking of the banking business model had become more urgent than many interest parties might be willing to admit.
He observed that technology appeared done with disruption and already progressing towards taking-over sectors with sight firmly set on financing.
Okuhu pointed out that “Because of what technology has been doing, banks are employing fewer and fewer people, and this is expected to continue.”
The disruptive aspect of technology had seen it sneak into the banking space, under the guise of offering solutions, whereas, it might just have been spying to takeover.
Okuhu admonished banking entrepreneurs to wake up and rethink their business models or brace up for extinction.
“When last did you see a bank opening a new branch,” he asked?
Okuhu, who is also a public relations consultant and bestselling author, maintained that “For banks, it is not a question of attracting the best brains, but a challenge of remaining relevant in the face of financial technology,” which is done emerging and is firmly taking root in the sector.
In tending to agree with Okuhu, the lady banker said that technology permeated the banking system with automation, which modified most banking processes, the danger being that technology firms are stripping the banks of trained tech-hands at an alarming rate.
“Most bank processes are now technology oriented,” she noted.
She exposed another crack that poor remuneration has seen many banks lose quality and trained employees to highly rewarding segments of the economy, technology inclusive.
“Once staff grasps the technology part, there is tendency for movement to tech firms that pay higher remuneration,” she pointed out.
In what sounded like calling on stakeholders to embrace the reality and face the future, Okuhu asked, “For instance, what do you think would be the fate of banks, should the telecommunication companies win the struggle for mobile banking licenses?”
It doesn’t seem that the banks are oblivious of the threat posed by technology, particularly the Fintech, as the lady banker pointed out that the industry expected large Fintechs to dislodge banks as presently constituted, in provision of financial solutions services.
We expect “extinction of banks as we know it and emergence of giant Fintechs,” she added.
Career Counsel to Youth
Okuhu would factor in a wide range of factors in pointing a child or ward towards a career path. While he has no issue with what he described as “traditional guidance counselling,” which prescribes talent, he noted that mere “talent is no longer enough.”
What appears to have influenced the choices of young Nigerians as reflected on the ranking of the 22-elite companies in the opening paragraphs would have included ‘economic opportunities,’ ‘growth potentials,’ and ‘possibility of self-actualisation.’
For Okuhu on short and long term basis, “The major factors for informed career choices are available economic opportunities and potential opportunities for growth,” respectively.
But the lady banker told The Point that the “best minds in finance might be left to work elsewhere, where they can maximise their potentials.”
She pointed out that various factor, like “opportunities and career growth, stability (job security) offered by government ministries, higher remuneration, and influence,” as the major thing she would factor into counselling an individual on career paths.
However, Okuhu noted that for those who feel cut out for leadership and desire to stand out in their generation, he expects that they should be driven by the quest for self-fulfillment.
“The possibilities for fulfilment are increasingly the most important variable on career choices,” he added, should be a strong driving force.
“Because of what technology has been doing, banks are employing fewer and fewer people, and this is expected to continue
“
Casting a view on the landscape of the Nigerian economy, Okuhu can see good opportunities in several areas. He views Nigeria as ‘virgin’ with several other sectors having the potentials to give technology a run for their money.
“Nigeria is a virgin land in many respects and there are attractive fields all over the industries. Today, technology looks like the most attractive but I can tell you that writers, social workers, merchants, and sundry other fields present good opportunities,” Okuhu said.
Typical banking career experiences
The Point sampled the opinions of several banking employees, serving and retired.
Branches of different banks at various locations in Lagos State were also studied.
The narratives are strikingly similar, irrespective of gender, financial institution, in-service or retired.
Some of the revelations from the investigation show that those still serving are contending with the frustration of harsh operating environment; most banks have about 40 per cent of employees on regular roster; the impact of outsourcing and casualisation is such that ‘third parties’ are now occupying sensitive positions in several banks, even positions that would ordinarily require regulatory approvals to fill; and that some regular employees are uncomfortable with the awkward situation but feel helpless because they don’t want to be thrown out.
Other salient points raised by the bankers is that sustainability has been sacrificed for profitability, with employees frustrated by ‘take it or leave it situations,’ and initiative thrown out of through the window in the banking system.
Jide Okosieme (not real names) gave graphic details of the challenges of taking to a career in a typical Nigerian bank.
He traced the systemic defect to the banking consolidation under Chukwuma Soludo in 2004.
What most of the banks did was to turn existing employees of the banks they were acquiring or merged with under ‘the scheme of mergers and acquisition’ into contract staff.
Exigencies of those moments favoured the stronger financial institutions, because the regulator wanted to see the process through, employees were eager not to be thrown into the labour market and investors eager to increase or retain interests.
Unfortunately, the banks already identified a huge opportunity to grow profits and have not let go, ever since.
Labour unions kicked and even the Central Bank of Nigeria attempted withholding some approvals but the banks found their ways round what would have been a difficult question.
One of the things the banks did, according to The Point’s investigation, was to register special purpose subsidiaries to employ contract and hold outsourced staff.
That left the regulator thinking that they were dealing with employees of the banks, not knowing that they were approving outsourced and contracted staff into positions that the law provided should be occupied by banking employees.
The banks’ priority was to save cost and boost profits but that has led to systemic cracks in the banking system with most banks now contending with more contract staff than regular employees. The contract staff, having served long cannot break the glass ceiling, yet find themselves being entrusted with huge responsibilities and sums of monies that few of them were mentally prepared cope with, thus leading to psychological breakdowns and increasing fraud rates in the banking system.
The banks have also found themselves confronted with numerous litigation from the contract and outsourced human resources, particularly on terminal benefits or severance packages.
