Nigerian banks are slashing the staff strength of top paid employees (Executive and Senior staff), but increasing the number of junior and contract staff as the sector gradually evolves into one where customers continue to conduct more business online.
The contract staff strength of banks was up 60 percent to 32,359 employees in the fourth quarter (Q4) of 2017, from 20,237 in the first quarter (Q1), while junior staff strength increased by 14.19 percent in 2017, to 41, 338 in Q4 from 36,202 in Q1, according to a Banking Sector report for 2017, released this week by the National Bureau of Statistics (NBS).
Meanwhile senior staff strength of banks fell by 19.1 percent, declining to 16,568 in Q4, 2017 from 20,483 in Q1.
Banks may be slashing wage bills as they realize they could increase deposit levels with fewer senior managers or executive staff in a digital age where customers often prefer banks’ mobile apps and ATMs.
The MD, Cowry Asset Management Ltd, Johnson Chukwu, said the reduction in the headcount at the top Management level by banks may be as a result of efforts to reduce costs by substituting high cost senior managers with lower cost middle managers in response to the harsh economic environment.
“Similarly, many banks have deployed technology to provide routine services and in some other instances use contract staff to man such other non-intellectually demanding jobs,” Chukwu told BusinessDay by email.
The trend in hiring’s accelerated in the second half of 2017, the NBS report showed.
A further break down of the report revealed a 4.57 percent decline in the total executive staff from 197 employees in Q3 to 188 in Q4 of 2017. In the vein, the senior staff slumped 18.86 percent to 15,468 in Q4 from 20,420 in Q3.
Meanwhile the junior staff and contract staff were up 17.47 percent and 19.71 percent respectively quarter on quarter.
Although many banks have recently posted record profits in the wake of the cutbacks, this was after the economic recession battered most banks on several fronts, leading to high levels of Non-Performing Loans (NPL).
The reduction in senior staff by the banks may also have come as a result of age retirement that was witnessed in the sector.
“They did this by reducing their heavy senior staff that earned a lot from the banks and employed contract and junior staff, combined with advancement in technology to help create stable staff strength,” an analyst speaking anonymously said.
Meanwhile, the total bank staff in Nigeria increased to 90,453 in Q4 2017 from 77,096 in the first quarter of the same period.
A further break down of the report revealed that the junior staff accounted for the highest percentage of bank workers in the country equivalent to 45.7 percent of total staff while contract staff was at 35.8 percent.
Senior staff accounted for 18.3 percent of the total Nigeria bank staff while executive staff accounted for 0.2 percent of bankers in the country.
The Nigerian Stock Exchange banking index is up 24 percent this year to Feb 02, outperforming the wider all share index.
Endurance Okafor & Michael Ani
