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.
History
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.
Workers Vulnerability
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.
The Law
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).
Conclusion
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
0 comments:
Post a Comment