The perennial human capital crisis in the banking sector got worse in the past few months.
This was partly triggered by increasing disengagement of employees, which insider sources described as “worrisome”.
The Central Bank of Nigeria (CBN) warned the banks against sacking employees as speculation of mass retrenchment made the round earlier in the year, following the outbreak of COVID-19.
Finding has shown that the banks, notwithstanding, have taken haircuts. However, more of the contract staff might have been affected by the reduction in personnel liability.
A sectoral performance report released by the National Bureau of Statistics (NBS) at the weekend revealed that the 44,664 contract staff on commercial banks’ payrolls at the turn of the year had been reduced to 39,573 (a decrease of 5,091) as of the end of September.
A total of 2,359 junior staffers were similarly axed or resigned, while senior staff, who form 18.5 per cent of the workforce, reduced by 564. The commercial banks, surprisingly, increased their executive staff (who take home the lion’s share of the personnel costs) from 153 to 210 (an expansion of 37 per cent).
The average job shedding across payrolls of the commercial banks from January to September was put at 7, 957.
In the same period, merchant banks also recorded a net staff balance of -73 while the non-interest banks expanded their workforce by 308.
The payrolls of the three key segments of the financial service sector, technically described as money deposit banks (MDBs), shrank by 7,722.
Yesterday, the Acting Director Corporate Communications, CBN, Osita Nwanisobi, insisted the apex bank “made it clear that no bank must sack” its employees. He promised the regulator would review the NBS statistics to ascertain the authenticity.
Sources privy to the depth of human capital need of the industry said widening hole in manpower was only a part of the evolving challenge. They argued that the devil was more in the ongoing work rationing where employees alternate duties as part of the measures to comply with COVID-19 protocols.
“No bank has operated at full capacity since lockdown was lifted. There has been rationing of employees, meaning that you are supposed to work harder to cover up for your colleagues who are not available in the office.
“If you are not in the office, you are expected to work from home. But, in practical terms, you still need those who are present in the office to assist you. This has increased the pressure on human capacity,” a source observed.
It was also revealed that the industry is currently suffering from capacity and competence issues capable of stifling growth potentials.
The media had reported recently that the CBN had written to banks and other financial institutions to furnish it with details of their staff competence levels as part of skill assessment test.
Nwanisobi said the planned capacity audit had nothing to do with a noticeable inadequacy and was not “triggered” by shortage of staff. He said it was continuation of a scheme that started in 2012 to build well-grounded bankers.
But sources insist that banks are groaning under a shortfall of skills and understaffing that could undermine growth potentials. An insider said the support services were the most affected.
Multitasking, it was leant, has found a new expression, as individuals are expected to juggle tasks of two or three colleagues who the banks had earlier claimed, “they did not need.
“People are dying in silence, because there are no jobs,” an external human resource consultant told The Guardian, adding that recruitment personnel dare not request additional hands, as memos in some banks had embargoed employment.
A staff of an old generation bank said the “stress level is extremely high,” whereas nobody wants to tolerate the slightest error from staff.
“And it is taking its toll on operations personnel. When you make a costly mistake, the bank squeezes the money from you. Nobody cares how much pressure the system has subjected you to,” the source, senior operation personnel, said.
But Dr. Austin Nwanze, a member of the human capital development faculty of Pan-Atlantic University, believes the stress level would ease out as banks return to normal operations. He said the retrenchment was “caused by the closure of some branches and the urgent need to minimize operational costs”.
According to Nwanze, the challenge caused by dearth of experienced bankers is more troubling than the shortfall in quantity of personnel. He said most banks were yet to regain the experienced hands they lost during banking consolidation spearheaded by the former CBN governor, Prof. Chukwuma Soludo.
As digital banking evolves, he said, the demand side of human capital would shrink further. When this happens, he noted: “More employees will be thrown into the labour market. The current workforce should prepare for that era, which is gradually kicking off.”
Still, some experts believe the days of heavy human capital assets are over for banks. Indeed, the industry is migrating online, with an average customer carrying all operations on the smartphone. Most operations are now almost done entirely on digital platforms.
For instance, data by NBS puts the value of online payments executed between Q3 2020 at N319.995 trillion. The figure is about 395 times higher than the cheque payment, which the Nigeria Interbank Settlement System estimated at N810.8 billion.
Sources also confirmed that across-the-counter transactions had reduced drastically and predicted that they would continue to shrink as more people embrace digital banking.
THE industry’s workforce, which currently stands at 95,888, is made up of 42.2 per cent contract employees, who, insiders said, have continued to expose the underbelly of growing integrity risks in the industry.
“The contract employees are not only poorly paid but are also not entitled to any benefits. They have little or no incentive to be loyal and honest. So, when a customer makes an account today and gets a fraudulent call the following day, people should know where such calls are coming from,” a banker said.
More troubling is the rate at which casual employees are switched to morally-demanding jobs. As the operations become increasingly stressed, it was learnt, personnel initially employed for marketing and counter-operation are switched temporarily or permanently to take up roles that expose them to more sensitive information.
While the CBN moves to ascertain the competence level of bank employees, Godwin Owoh, a professor of applied economics and advisor to Soludo during his tenure as CBN governor, said the apex bank needs more human capacity audit. He said the country would in a few years begin to see the repercussion of its opaque recruitment process in the past years.
“Most of the new operatives were employed through the bac.kdoor. In 10 to 20 years, those guys would be directors, taking key decisions. That is when Nigerian s would realise that we, indeed, do not have central bankers. The bank needs an urgent human capacity audit,” he said.
MEANWHILE, President of the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE), Anthony Abakpa, said, the union had not received any formal report of disengagement in banks.
But he said the union was aware of an issue in one of the banks.
According to him, when the issue came up, the union confronted the bank immediately, and wrote a protest letter to the management.
“The response to the letter was that they did not sack any of their staff. They said only few ones were returned to their employers, those who were not directly linked to the bank.
“We held a meeting with them last week, the outcome of which we have not resolved, and none of them were given letters so far.
“As at today, we can say that we have not received any letter of disengagement from any quarters, we can say it is still a rumour.
“The people who appeared to be affected have no formal letter issued to them. We told them not to receive any letter of disengagement.
“The few ones that came to lay complaints at our national headquarter are about 22, though they didn’t come with any letter of disengagement, and we have equally told them not to accept any. As NUBIFIE, we shall not take any disengagement lightly, not for anything,” he stated.
On the rise in automation in banks, National Coordinator, Alliance for Affordable Internet, Olusola Teniola, said the introduction of digitisation, digitalisation and digital transformation provides the bank workforce opportunity to up-scale and adapt to man-machine interactions that are now becoming more integrative in the future of work.
Teniola, the immediate past president, Association of Telecommunications Companies of Nigeria (ATCON), said AI, data science and automation were technologies that remove the mundane bank operations activities and bring in efficiencies that humans cannot produce.
He stressed that the application of AI into credit risk assessment, loan portfolio management and other process-driven activities means that digital banking will create new opportunities in Customer Care and service for banking staff and address new areas of operations, where banks, in the past, did not necessarily felt the need to focus on.
Referring to World Economic Forum (WEF), a telecoms expert, Kehinde Aluko, said machines and algorithms in the workplace are expected to create 133 million new roles, but cause 75 million jobs to be displaced by 2022.
Called ‘The Future of Jobs 2018’, Aluko said it meant that the growth of artificial intelligence could create 58 million new net jobs in the next few years.
According to him, with this net positive job growth, there is expected to be a major shift in quality, location and permanency for the new roles, and companies are expected to expand the use of contractors doing specialised work and utilise remote staffing.
He stressed that, in 2025, machines are expected to perform more current work tasks than humans, compared to 71 per cent being performed by humans as of now. Due to this transformation, he said it would have major impact on the global workforce.