By Bisi Daniels
The increasing casualisation of labour by financial institutions, especially deposit money banks, continues to be a major concern of stakeholders because of the devastating impact of the practice on the money market, the victims and the national economy as a whole.
The practice involves a situation where employment shifts from normal full-time and permanent positions, with full benefits, to casual and contract positions. A situation where some workers are not given normal entitlements but are expected to deliver on high targets.
The Nigeria Deposit Insurance Corporation (NDIC) has observed from bank returns and during examination exercises a strong correlation between the high incidence of frauds and forgeries in the banking system and the use of contract and outsourced staff.
Casual staff, who account for about 25 per cent of the banking industry workforce, have a negative impact on the industry as some banks are in the habit of assigning sensitive roles to them, thereby exposing the banking industry to fraud.
The Chartered Institute of Bankers of Nigeria (CIBN) has corroborated this. During a visit of its Council members to the NDIC headquarters last year the Institute admitted that over 75 per cent of fraud cases in the sector had been traced to outsourced bank staff who were neither professionals nor members of the CIBN.
The casualisation of labour by deposit money banks is traceable to the desperation to amass deposits, cost cutting and profit maximization. It heightened with the establishment of many banks in the 1990s and escalated during the Central Bank of Nigeria’s bank consolidation and recapitalization exercise in 2006. Years after the recapitalization process, the need to maintain profitability on investment is still driving banks to deploy unconventional methods to reduce the cost of labour and also to attract customers to open accounts with them.
Importance of Bank Deposits
Deposit money banks are able to create money to fund loans, making profit out of the interest charged. Depending on CBN’s regulations, the bigger the deposit base of a bank, the greater its size and ability to lend to make more profits.
But while efforts to raise the deposit base of banks may be a healthy exercise for the industry and instill savings culture in a country where two per cent of the population own 90 per cent of total banks’ deposits, unbridled hunting for deposit through unacceptable practices poses a grave danger.
To increase deposits, Nigerian banks are engaged in an aggressive marketing drive and at the forefront of this exercise are the customer relationship managers – marketers. They are charged with the responsibility of looking for customers to deposit their excess funds with the banks. In order to increase deposits, the marketers are given targets, which are used in the appraisal of their performance. But some of these targets, running into hundreds of millions of Naira are practically unattainable.
Employees are mandated to bring in deposits ranging from hundreds of millions of Naira to billions of Naira within a timeframe. Besides the unreasonable deposit targets, the time frame to achieve these targets is equally unrealistic. Sometimes, the targets are not only restricted to marketing personnel, but are also extended to all other employees.
Types of Casualisation
Some banks put their direct hires straight on contract under non-negotiable terms entirely different from employment terms of the permanent staff, but their tasks and targets are not different.
There are those whose employment either on permanent or on contract basis is conditional on the deposits they can attract to the bank. They are usually given near impossible targets to achieve as a condition for retaining them without which employment becomes a non-issue.
The commonest practice these days is outsourcing, an arrangement in which one company provides services for another company that could usually be provided in-house. A ready defence mechanism of the practitioners is that firms are better off outsourcing services for which they have no core competencies or services which are not central to their core business.
While this may be right in some sense, it has been observed that in Deposit money banks, outsourced staff have been assigned sensitive positions, to the detriment of hiring professionals to man those positions. Besides the widespread nature of the practice is indicative of the fact that it is motivated by cost-cutting and profit maximization.
Many deposit money banks also use the practice to escape the backlash of workers protest over their unfair treatment. To prevent effective opposition from victims of outsourcing, the management of the banks and outsourcing companies ensure that contract staff do not engage in unionism.
Whenever officials of labour unions of banks challenge outsourcing companies, as the direct employer of contract staff, the companies claim that they are not banks and are therefore not under the umbrella of the unions.
The Use of Women
A major concern about casualisation of labour in financial institutions is the use of women, as marketers to source deposits. Banks often engage female employees and set very high targets for them on deposit mobilisation and other asset creation ventures, which puts undue pressure on the female employees.
Under normal circumstances firms use women for this role because of their psychological advantage over men. Women are known to have good people skill and are capable of building strong relationships with customers.
But it does seem that some banks are taking undue advantage of this psychological advantage of female marketers, turning it into some sort of corporate prostitution. They do this by encouraging or leaving female marketers with no option than to sleep with men for deposits to try to meet near impossible targets.
The National Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) reportedly blames the unfair treatment of workers in the banking sector, particularly junior staff, on the paucity of jobs despite the escalating number of able job seekers.
Contract employment and casualisation of labour contravene Section 7 (1) of the Labour Act, Cap 198, Laws of the Federal Republic of Nigeria, 1990.
The law provides that “not later than three months after the beginning of a worker’s period of employment with an employer, the employer shall give the worker a written statement, specifying the terms and conditions of employment.”
Worse, most bank workers under unusual contract terms are either denied the platform to launch protests or they are not willing to challenge the terms for fear of losing their jobs. However, regulatory agencies have continued to condemn the practice and have urged for immediate redress.
Reaction of Some Key Stakeholders
The Central Bank of Nigeria: The CBN recently warned commercial banks operating in the country against placing unrealistic deposit targets on their marketers. The practice, according to the CBN Governor, Mr. Godwin Emefiele, goes against the grains of acceptable ethical conduct and corporate governance. He noted that the practice could have negative moral implications. According to him, forcing bank marketers, especially females to meet unrealistic deposit targets could influence their decision to engage in illegal and immoral acts.
To curtail this trend, he said: “The CBN is using moral suasion. We have been talking to banks about it. It is a continuous effort that we are making and we see the trend coming down. We cannot sanction the banks because (of) a completely business decision.
“But then we are telling banks that it is a wrong business decision. We have been speaking to them to change the strategy because it is affecting the banking culture and the landscape of the industry.
“The Governor of the CBN is using the instrumentality of the Bankers’ Committee to talk to the management of banks to stem down on some of these policies. The intention is not to kill the marketing departments but to reduce the pressure by reducing the unrealistic targets that they place on marketers.”
The Nigeria Deposit Insurance Corporation: The NDIC has repeatedly criticized deposit money banks over the unwholesome practice of engaging contract or outsourced staff in the industry. The Managing Director of the corporation, Alhaji Umaru Ibrahim, said, “In as much as regulators appreciate the necessity for banks to cut costs, it is incumbent on all stakeholders to fashion out capacity building and other strategies to motivate all employees to contribute positively rather than engaging in unwholesome acts that impact adversely on the entire banking system”.
Chartered Institute of Bankers of Nigeria (CIBN): The institute which condemns the practice pledged in July 2016 to table the matter at the CIBN’s next meeting with banks’ CEOs with a view to addressing the issue.
The National Assembly: At various times, lawmakers have risen against labour casualisation in the banking industry. Recently the House of Representatives moved to probe Nigerian banks for enslaving marketers with unrealistic targets.
The lawmakers lamented that when the workers failed to meet the targets, they were usually subjected to harassment, intimidation, demotion and summary dismissal by the management.
The decision of the lawmakers followed the adoption of a motion by Segun Adekola (APC, Lagos), who described the trend as a breach of the dignity of the human person and of labour. He said it negates the concept of Decent Work Agenda of the International Labour Organisation (ILO).
In as much as regulators appreciate the necessity for banks to cut costs and raise deposits, it is incumbent on all stakeholders to fashion out capacity building and other strategies to motivate all employees to contribute positively rather than engaging in unwholesome acts that impact adversely on the entire banking system.
-Daniels is a journalist and author