By Cynthia Akinwale
The Nigerian insurance sector, a critical pillar of the country’s financial ecosystem, has been mired in controversy over its long-standing reliance on contract staff. This practice, while cost-effective for companies, has raised significant ethical and operational concerns, as these employees often find themselves trapped in a cycle of low wages, limited benefits, and unequal treatment.
Across the Nigerian insurance industry, contract staff make up a substantial portion of the workforce, mirroring trends in the country’s banking sector. These workers, typically recruited through outsourcing firms, are entrusted with critical roles, from sales and customer service to claims processing and administrative support. Despite their contributions, they are often relegated to the fringes of the corporate structure.
According to industry insiders, the unwritten rule is that contract staff are expected to be converted to professional or permanent employees after two to three years of service. This transition is meant to reflect their growing expertise and contribution to the company. However, this promise often remains unfulfilled.
A Decade of Stagnation
Reports indicate that many contract staff in Nigeria’s insurance companies have worked for over a decade without being converted to professional roles. During this time, they receive meager salaries, often a fraction of what their professional counterparts earn. “I have worked here for eight years as a contract staff,” said one employee, who preferred to remain anonymous. “I’ve exceeded all my targets, but I’m still treated as a temporary worker.”
Economic Reasons Behind the Practice
The reluctance to convert contract staff is largely financial. By keeping these employees on temporary contracts, insurance companies avoid paying higher salaries, pensions, health benefits, and other entitlements that come with professional staff positions. This cost-cutting strategy, however, comes at a significant human and reputational cost.
Second-Class Citizens in Their Workplace
The disparity between contract staff and their professional colleagues extends beyond salaries and benefits. In many companies, contract staff are not invited to end-of-year parties or corporate events, reinforcing a culture of exclusion. “It’s disheartening,” said another contract worker. “We work just as hard, if not harder, yet we’re treated like outsiders.”
This sentiment is echoed by labor advocates, who argue that the segregation undermines morale and productivity. “The treatment of contract staff in the insurance industry is both unethical and counterproductive,” said a labor rights activist. “It’s time for companies to recognize their value and treat them with dignity.”
Calls for Reform
The plight of contract staff in Nigeria’s insurance sector has not gone unnoticed. Industry analysts and labor unions are calling for regulatory reforms to address the imbalance. They advocate for stricter enforcement of labor laws, including mandatory conversion timelines and penalties for non-compliance.
The National Insurance Commission (NAICOM), the regulatory body overseeing the industry, has yet to take a firm stance on the issue. However, stakeholders argue that its intervention is crucial for ensuring fair treatment of all employees.
The Way Forward
As the insurance sector continues to grow and innovate, it must also address the systemic inequities within its workforce. Treating contract staff as second-class citizens not only tarnishes the reputation of companies but also hampers their long-term success.
Employee welfare is not just a moral obligation; it is a strategic imperative. For the Nigerian insurance industry to thrive, it must embrace inclusive and equitable labor practices that recognize and reward the contributions of all its employees, contract and professional alike.
The time for change is now.
