By Pascal Ebhohimen, Ph.D
The idea of encouraging banks not to hurriedly lay off their staff in view of the challenges they experience under the Covid-19 pandemic is a wonderful one and the CBN and the NDIC have provided good leadership in this respect.
It is even in the best interest of the banks to retain their staff because it is easier and cheaper to retain old staff than to recruit new ones, strategically speaking.
By retaining old staff, you save the cost of new search and acquiring new people, cost of knowing who they are while on the new job, training and retraining them to reach the required capacity level, loss of collective cognate experience, etc.
But old staff understand the current challenges their banks face and so would be more committed to their early and timely resolutions.
It is professionally expedient for banks’ top managers at this period of time if they had not already done so to carry out a risks/ vulnerability assessment, to determine their exposures to the virus pandemic so they are better positioned for business continuity. It is not common in this part of the world not even in the advanced countries for businesses to have had a contingency plan for a pandemic situation such as this. So banks, ordinarily in developing a response plan based on their risks profile in respect of people risks, would like to attempt a ” right-sizing” and declaring redundancies in some of their product lines.
It is important that banks take a due care to do so and not to rush firing their staff as they have the power to do so as they hired them in the first instance. But not so with the top managers and executive staff that would normally get the approval of the CBN to do so.
Under the circumstance, moral judgment prevails on the part of the bank not to fire staff in a reactionary mode. It is not politically and socially defensible from the perspectives of the public and the regulators who have provided adequate incentives to banks during this period and beyond the Covid-19 pandemic to enable them to continue their operations.
Expectedly, therefore, banks should be more creative on how to better use their very experienced and competent staff to turnaround their business and for sustained continuity. In practical terms, the ideas of banks offering early retirement option for those close to retirement is good.
Deploying staff to customer relationship function so persuasion for continued patronage and offering promptly financial services to support customers would keep bank deposits safe; mobilize staff to develop new bank products with attractive incentives to potential customers to attract new deposits and to retain current deposits, co-creating value for high net worth customers by supporting and partnering with them in their businesses through their staff offering consulting services among other services.
Staggering staff salary payments, and other allowances, etc are quite good options. Nonfinancial incentives and flexible working and work sharing arrangements releasing staff to do other businesses to earn additional income when not on duty; all introduced to gain the hearts and minds of staff and to raise their motivational and satisfaction levels under these stringent and severe conditions occasioned by the virus.
Partnering with other businesses through secondment of their staff temporary as part of outplacement services and to have them returned when the bank bounces back is equally an option.
The whole idea is not to allow any staff to suffer unduly under the situation we are in.
Banks need them now for turnaround programme and in the near and far future when the economy picks up for more banking operations.
So retaining staff is a strategic choice bank must make.
•Ebhohimen, MD/CEO of Trainfield Associates Limited, is a former Head and Director of Claims Resolution Department of the Nigeria Deposit Insurance Corporation (NDIC) where he retired recently. Before now, he was the Director of Strategy Development in the same institution. He was also Senior lecturer at the University of Benin.