Zenith Bank, FirstHoldco, Two Others Spent ₦119.9bn On Outsourcing

… Contract Staff Struggle With Poor Pay, Exploitation, Insecurity

Some of Nigeria’s largest financial institutions, including Zenith Bank Plc, FBN Holdings Plc (FirstHoldco), Access Holdings Plc, and Guaranty Trust Holding Company Plc (GTCO), collectively spent ₦119.92bn on outsourcing in the financial year ended December 31, 2024.

The amount represents an increase of 35 per cent from the ₦88.84bn recorded in 2023.

This sharp increase in outsourcing expenditure, disclosed in the banks’ audited financial statements and compiled by THE WHISTLER, has reignited concerns over the persistent exploitation of contract staff who form the bulk of outsourced workers in the Nigerian banking sector.

Outsourcing, often adopted as a cost-cutting measure, allows banks and companies to delegate critical business functions to third-party service providers.

However, critics say the model enables institutions to sidestep labour obligations by avoiding direct employment costs such as pensions, health benefits, and competitive salaries.

According to a 2023 report by the Chartered Institute of Bankers of Nigeria (CIBN), approximately 65 per cent of the workforce in Nigeria’s banking sector is composed of contract staff. These workers, although often placed in customer-facing and revenue-generating roles—such as tellers, sales agents, and account managers—remain significantly underpaid and largely excluded from workplace benefits and protections.

A 2022 study by the Nigeria Employers’ Consultative Association (NECA) revealed that banks save as much as 40 per cent on labour costs by outsourcing roles traditionally held by permanent employees.

Despite the banks’ rising profits, outsourced staff continue to endure precarious working conditions. Many contract employees earn less than half of what their permanent counterparts receive, even when performing identical duties.

Mr. David Adekunle, a contract staff member in one of the tier-one banks in Lagos, shared his experience with THE WHISTLER.

“Despite handling the same responsibilities as full-time employees—managing accounts, meeting targets, and assisting customers—my monthly salary barely covers basic expenses,” he lamented. “I earn just ₦100,000, while my colleagues doing the same work take home between ₦250,000 and ₦300,000.”

Similarly, Miss Chinasa Ukandu, an economics graduate employed by a new-generation bank, described the model as exploitative. “I work from 8 am to 5 pm, sometimes even later, yet my salary barely covers my transportation and feeding,” she said. “The worst part? The bank pays twice my salary to the outsourcing firm, but I only see a fraction of it.”

In addition to low pay, contract staff face job insecurity and discriminatory workplace practices. Many are excluded from training programmes, promotions, and team-building activities—effectively limiting their career advancement and reinforcing a two-tier workforce system.

“Contract staff are not just underpaid; they are invisible in corporate structures,” said a human resource consultant who spoke on condition of anonymity. “They are often left out of institutional policies, treated as expendable labour, and denied the dignity of fair employment.”

Although Nigeria’s labour laws are designed to apply to all employees regardless of contract status, enforcement remains weak.

“Labour laws apply in theory, but in practice, outsourced workers are left vulnerable due to poor regulation and a lack of political will to enforce compliance,” the HR expert added.

The Deputy General Secretary of the Nigerian Union of Banks, Insurance, and Financial Institutions Employees (NUBIFIE), Mr. Shola Aboderin, confirmed that the union had been pushing for improved labour standards for outsourced staff.

He referenced a sectoral guideline signed under former Labour Minister Chris Ngige that allowed for periodic review of outsourced workers’ conditions and mandated union involvement in disciplinary processes.

“Despite these guidelines, implementation remains a major hurdle,” Aboderin said. “We have written to the current Minister of Labour since May, requesting a meeting to discuss enforcement, but we’ve received no response.”

While companies cite operational efficiency and risk mitigation as reasons for outsourcing, labour analysts argue that the human cost is too high to ignore.

“Outsourcing firms carry certain risks, such as performance management and liability issues, but these do not justify the wage disparity and insecurity experienced by contract staff,” the analyst noted.

With Nigeria facing rising inflation, high transportation costs, and increased electricity tariffs, the plight of outsourced workers has become more precarious.

Advocates are now calling on regulators, labour unions, and the government to step up efforts to protect vulnerable workers and ensure that outsourcing does not become a tool for corporate exploitation.

Zenith Bank, FirstHoldco, Two Others Spent ₦119.9bn On Outsourcing is first published on The Whistler Newspaper