In recent years, the Nigerian banking industry has seen a growing shift in hiring practices. Today, a large portion of the workforce in top financial institutions is made up of contract staff — young, energetic, and often underpaid.
But this begs the question: Do Nigerian banks hire contract staff for smart business savings, or is it a silent form of worker exploitation?
Let’s break down the reasons behind this trend and what it truly means for the future of banking jobs in Nigeria.
Who Are Contract Staff?
Contract staff are individuals employed by third-party outsourcing firms to work within a bank. They perform key functions such as:
Customer service
Telling and cash management
Marketing and sales
Administrative support
They wear the bank’s uniform and operate like full staff — but they’re not directly employed by the bank. And that’s where things get interesting.
Why Banks Prefer Contract Staff
1. Lower Operational Costs
Hiring contract workers significantly reduces expenses for banks. They don’t have to pay:
Full salaries
Pensions
Medical benefits
Housing or transport allowances
Gratuities or severance packages
This cost efficiency allows banks to maintain lean operations, especially in uncertain economic times.
2. Flexible Workforce Management
Contract roles allow banks to scale up or down quickly, depending on market conditions or seasonal demand (e.g., festive periods, audit seasons, or product launches).
They can:
Easily replace underperformers
Terminate contracts without legal hassles
Avoid lengthy HR processes
3. Reduced Legal Liability
Since contract staff are officially employed by outsourcing firms, the bank avoids direct legal obligations. Any labor issues, salary disputes, or employment breaches are the third-party firm’s problem.
4. Increased Productivity at Lower Pay
Contract staff are usually younger graduates, eager to prove themselves. Banks often push them to achieve aggressive sales and performance targets — all while paying them far less than permanent employees doing the same job.
It’s a model that maximizes output and minimizes cost.
The Other Side: Is It Exploitation?
While banks enjoy the benefits, many argue that this system exploits vulnerable job seekers.
Here’s Why:
Low pay: Most contract staff earn ₦40,000 – ₦100,000 per month — barely enough to cover transport and feeding.
No job security: Contracts are short-term, and workers can be terminated without notice.
No benefits: Unlike permanent staff, contract workers get no health insurance, pensions, or bonuses.
High pressure: Many are given unrealistic targets and threatened with dismissal for poor performance.
Limited growth: There is little to no career advancement. Most remain stagnant despite years of service.
This creates a cycle of burnout, frustration, and high turnover.
What Graduates and Job Seekers Must Understand
Before jumping into a contract banking job, here’s what you should keep in mind:
It’s a stepping stone, not a destination
Use the opportunity to learn, network, and grow skills
Don’t rely on it for long-term financial planning
Keep applying for graduate trainee or permanent positions
Work smart and document your achievements for future interviews
Is There a Better Way?
For Banks:
Introduce conversion paths for high-performing contract staff
Offer minimum benefits like health insurance and transport allowance
Invest in employee well-being to reduce burnout and turnover
For Government & Regulators:
Enforce labor laws that protect contract staff
Mandate outsourcing firms to pay living wages
Introduce standards for fair work conditions in the private sector
The preference for contract staff by Nigerian banks is a double-edged sword. Yes, it saves money — but at what cost?
If not addressed, this model could erode trust, reduce service quality, and create a generation of overworked, underpaid, and unmotivated employees.
As a graduate or job seeker, go in with open eyes. Understand the system, use it to your advantage, and always keep working toward better opportunities.
