Banks’ staff payroll size yet to reach pre-COVID level

Banks may have continued to offload excess payrolls notwithstanding the gradual recovery of the economy after the devastating impacts of COVID-19.

Banks had closed some of their branches at the height of the pandemic, leading to widespread downsizing. But the figure continues to slide amid the rising cost of operations and demand for improved customer satisfaction.

According to data released by the National Bureau of Statistics (NBS), employees across different categories and subsectors stood at 186,180 as of December 31, 2021, which is four per cent lower than the 96,975 employees the sector closed the previous year with.

According to the statistics, the staff load of different sub-categories of the financial service sector – commercial, microfinance and non-interest banks.

The staff strength of the banks has been on a downward slope since 2018 when the figure stood at 104,669. It slumped marginally to 103,610 in 2019, the pre-COVID-19 year.

Detail analysis shows that the casualisation of labour in the sector has defied advocacy by relevant stakeholders as it still stood at 42.5 per cent at the close of last year.

In 2020, the number of casual staff trended down to 41.9 per cent from 43.7 per cent recorded in 2019 only to rise slightly last year again to 42.5 per cent.

The report puts the total number of employees of microfinance banks at 775 while those of commercial banks are pegged at 90,455. Non-interest banks are estimated at 1,925.

The Guardian had reported that the banks were under pressure to reduce personnel costs with the use of technology.

Commenting on the aggressive staff cost-cutting measures, a member of the Lagos Business School faculty, Dr. Austen Nwaze, said the trend could increase stress among staff and trigger downward performance in productivity.

A professor of applied economics, Godwin Owoh, also said the inevitable repercussion of job insecurity in a trust-based sector like banking is an increase in fraud in the system. When people know that their jobs are not secure, they will use every opportunity they have to take out from their employers to secure their future.

The report also highlighted the performance of the sector in terms of credit and portfolio spread across sectors.

“The total credit allocated to the private sector in Q1 2021 stood at N62.28 trillion. The top three credit allocations went into the oil and gas, industrial sector, manufacturing sector and the general service sector with N11.97trillion (19.22 per cent), N9.82 trillion (15.77 per cent) and N5.55 trillion (8.92 per cent) respectively.

“Similarly, in Q2 2021, total credit allocation increased by 5.64 per cent to N65.79 trillion, with the top three allocations to the oil and gas industrial sector, manufacturing sector, and general service sector recorded at N12.34trn (18.75 per cent), N10.83 trillion (16.46 per cent) and N6.24 trillion (9.48 per cent) respectively.

The Q3 2021 credit allocations to the private sector further increased by 2.33 per cent from the amount recorded in Q2 2021, showing a total of N67.33 trillion. Of this amount, allocation to the oil and gas industrial sector stood top at N12.32 trillion (18.29 per cent), followed by the manufacturing sector with N11.14 trillion (16.55 per cent) and the general service sector with N6.49 trillion (9.64 per cent).

“In addition, N71.71 trillion was reported as a credit to the private sector in Q4 2021, indicating a growth rate of 6.52 per cent from Q3 2021. Again, the oil and gas industrial sector recorded the highest allocation with N12.48 trillion (17.4 per cent), followed by the manufacturing sector with N12.16 trillion (16.96 per cent) and the general service sector with N7.08trn (9.87 per cent),” the report details.