UBA's Staff Layoff; Understanding The Shifting Dynamics Of Banking's Future

Banks in Nigeria have started to scale back their operating expenses as they begin to "right-size" their staffing needs to remain competitive and protect business margins. A clear example of the emerging shift in industry strategy occurred in January 2020 when the United Bank of Africa (UBA) , one of Nigeria's oldest top-tier banks, disengaged hundreds of its staff. Investigations by Proshare indicate that the bank carried out the exercise to lean into a more competitive workforce demography and streamline salary compensation along with broad industry standards.
Apart from reducing the average age of its workers, the bank also needed to change the internal compensation arrangements. Unlike other banks that did not have a service scale that separately recognized graduates from institutions of technology, UBA had over the years maintained such a scale and the bank needed to correct this anomaly against competitive demand for newer employees. In this regard, the bank also squeezed its graduate trainee programme from a two (2) year period to a six (6) month Executive graduate programme. The implication would be to fast track the movement of graduates that can pass through a more rigorous six months of financial training Bootcamp.
The recent UBA staff layoff represents a shift in the strategic deployment of human resources industry-wide. In 2019 Ecobank Nigeria Plc equally laid of staff that where consider not "fit-for-purpose" and were replaced by younger staff that had passed through their rigorous training school programme. The disengagement led to spirited protests by the disengaged staff and even saw the labour union get involved, but the reality of ensuring corporate sustainability has led local banks to adopt human capital strategies that build with an eye on a forward-looking generation of customers. Against this background, further layoffs across the banking system may occur in 2020 as more banks work out the right staff-type and business strategy that protects competitiveness. The battle to retain market share has become one of the burnings of bridges, where there is no retreat and no surrender. Keeping customers satisfied and keying into the new service journey experience of users of bank services will separate the dying from the living; it is that simple and dire. The managing director of GT Bank, Mr. Segun Agbaje, in a recent interview emphasized the new shape of competition coming from unlikely sources such as Telcos, Fast-Moving Consumer Goods (FMCGs) digital platforms and sports betting companies. The competitive knife may strike from the least expected quarters.
Deposit money institutions (DMBs) have come to realize that the customer experience journeys have started changing and that to meet emerging expectations, a new service delivery template was evolving that required fresh thinking and, more importantly, new technology. The combination of changes in the requirements of customer service delivery and customer demography has led to slimmer and more flexible corporate structures. The once vilified term, "Rightsizing," has become a respectable corporate expression .
Indeed, immediately after New Year greetings and Christmas festivities between December 25th, 2019 and January 1st, 2020, the management of
UBA sent letters to affected staff that their services in the bank were no longer required. In other words, their appointments had come to an abrupt end. The measure sliced-off a chunky size of workers from across different departments and cadre. A top manager who requested for anonymity noted that " the action was painful as some good friends had to go, but the bank had to do this, the productivity ratios needed to improve from a strategic perspective; improved technology naturally required a reinvention of the business architecture and that in turn meant the streamlining of financial operations ."
For example, with the introduction of the bank's artificial intelligence cypher, "Leo," its ability to respond quickly and efficiently to customer complaints and enquiries has grown exponentially; therefore, the jobs of traditional customer relationship officers (CROs) had to be reappraised and streamlined. Besides, the automation of many back-office functions meant that the bank's need for particular types of skills would necessitate reassessment and actioning. According to one insider, "it was a matter business good sense over social empathy. A bank is a for-profit organization and is responsible to equity owners, and for these sets of stakeholders, emotional credit does not count for much ."
A Global Race To Scaling Banking Operations
Bank lay-offs were a prominent feature of 2019 as banks initiated major human capital streamlining as they reworked their business models and operational activities. For example, Deutsche Bank of Germany announced that it would lay off 18,000 of its staff mostly in the United Kingdom by 2022 as it prepares for the consequences of a British exit from the European Union (EU) in 2020. Deutsche said the layoffs would reduce annual costs by €6bn until 2022. The bank would also scrap its global equities business and wind down investment banking activities. In May, the bank's Chief Executive Officer, Christian Sewing, reassured investors at the bank's annual general meeting (AGM) that management was "prepared for tough cutbacks" and that he would "speed up the transformation" by focusing on "profitable and growing areas."
The remodelling and rethinking of the banking business is a global phenomenon as the changing parts of international business, and competition put pressure on margins, market share and human resources. The previous year saw a list of top-rated global bank brands shedding staff

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