Modern Day Slavery: Nigerian Banks Enslaving Workers Through Contract Work

Outsourcing companies are fast becoming the norm in every industry. From the telecommunications industry to the manufacturing industry, and most importantly, the banking sector in Nigeria. Talents are becoming expensive, and banks are finding a way around the cost by partnering with outsourcing firms.

The banks are now depending largely on outsourcing companies to provide cheap labour, which has led to the increase in the number of contract staff by 41.7 per cent in two years - 2018 and 2019 - across Nigerian banks. The new romance between banks and outsourcing firms is fuelling the rise of modern slavery; more work, less pay.

Majority of the banks, including UBA, Access Bank, GTBank, Zenith Bank and many others are all culprits and fueling the rise of contract work that is enslaving Nigerian workers in the banking industry.

Why Nigerians Don't Mind The Contract Staff Job

Due to the economic landscape of Nigeria, graduates are often cut between the devil and the deep blue sea - remain unemployed or be under-employed. With the rising cost of household needs and housing, graduates have no choice but to sign the modern slavery form, because if 'Job Seeker A' doesn't sign, "Seeker B' will, and if both do not, 'Seeker C' will embrace the opportunity.

The hustle for jobs in Nigeria is unimaginable when unemployment is considered. In 2010, there were 3.5 million unemployed, in 2018, the number increased to 21 million, and by last year, the number reached 23 million. In a country where about 250,000 jobs are produced a year, but about 500,000 persons graduate from university yearly.

This is why graduates or job seekers jump at the opportunity presented by outsourcing companies without caring about the implications. Reality only begins to dawn on the contract staff after a year into the job and they begin to see the welfare gap between full-time staff and contract workers.

The desperation of the unemployed Nigerians and lack of jobs is why outsourcing firms are thriving in Nigeria. Although, most of these outsourcing firms are not Nigerian-owned, as they are Indian and Chinese outsourcing companies - so the welfare of a Nigerian is of no concern to them.

Nigerian Banks Are Taking Advantage Of Graduates' Plight

Banks in Nigeria are heavily milking the unemployment situation in Nigeria. The number of contract staff keeps rising in the banking industry, leading to 41.7 per cent rise in two years. The banks combined recorded total employees of 89,608 (Q1 2018), 101,858 (Q2 2018), 102,821 (Q3 2018), 104,669 (Q4 2018), 105,017 (Q1 2019), 104,364 (Q2 2019), 101,435 (Q3 2019), 103,610 (Q3 2019).

However, out of these employee number, contracts staff accounted for the most; Q1 2018 – 32,013, Q2 2018 – 43,955, Q3 2018 – 44,484, Q4 2018 – 45,238, Q1 2019 – 46,235, Q2 2019 – 46,263, Q3 2019 – 43,180, Q4 2019 – 45,350. Knowing that contract staff don't occupy top positions, this means contract staff accounts for most of the low-level jobs.

A further breakdown of the figures showed that as at December 31, 2019, bank staff strength is as follows; Contract staff – 45,350 (43.8%), Junior staff – 39,896 (38.5%), Senior staff – 18,180 (17.5%) and Executive staff – 184 (0.2%), a Nigerian Bureau Of Statistics data disclosed.

The aforementioned figures describe the cravings of banks for contract staff. Note that the employment of contract staff reflects a massive purge in the banking sector. Earlier this year, UBA conducted a mass sacking of thousands of old employees and replaced them with Contract Staff, today, most of its workers handling tellers are contract staff.

The sack by UBA led to 116 of the sacked employees to sue the bank, demanding N2 Billion for breach of contract and wrongful termination of employment, "The defendant (UBA) perfected the mass sack before surreptitiously compelling them to resign to deny many of them their terminal benefits through loans availed them a few weeks before the sack.” the ex-employees stated.

Why Banks Are Craving For Contract Staff

The reason is not farfetched - to cut costs. Just like any business, Nigerian banks are often looking for ways to cut the cost of operation and one of the easiest ways to do that is to flood its workforce with contract staff, which signifies cheap labour. The use of contract staff will reduce their expenses on workers' salaries.

AllNews learnt that as at December 31, 2019, Ecobank incurred N177.4 billion on workers salaries (this includes its other African subsidiaries, First bank incurred N84.04 billion, Access bank recorded N73.2 billion, UBA recorded N72.5 billion, Zenith Bank incurred N65.8 billion, Stanbic Bank recorded N41.1 billion, GTBank was N33.3 billion, Union bank reported N32.4 billion, FCMB incurred N22.97 billion, while Fidelity recorded N21.1 billion expenses on workers salaries.

Banks' Cravings For Cheap Labour Is Mistreatment Of Workers

So banks' major concern has often been how to reduce operation cost and increase profit at the same time, that's why cheap labour has been the trend among banks in Nigeria. The contract workers are employed without any benefit tied to their names. Despite doing the most tedious work, contract workers don't benefit from the welfare package the banks provide for their full-time.

The outbreak of coronavirus in Nigeria showed how underappreciated the contract staff are in the banking sector. When banks were made to shrink their operation and reduce the number of workers in their banking hall, UBA had most of its contract staff come to work, while most of the full-time employees were told to stay home - yet the full-time employees were paid more than the contract staff within the two months that movement was restricted.

Also, when Access Bank decided to sack its employees to save cost, Access Bank chose to retrench its contract staff, with the Chief Executive Officer of Access Bank, Herbert Wigwe stating they were non-essential. And the non-essential workers accounted for 70 per cent of Access Bank workers.

So contract workers are often the first to be sacked when companies are downsizing, and the contract workers exit the company without a severance package.