A mid-size oil and gas firm in Nigeria did something it has not done for years – it refused to publish an end-of-year list of staff that will get fired for not meeting up during the year. No one will be let go this year, its CEO proclaimed.
Reports from several global firms around the world suggest corporate downsizing is at full speed as businesses cut back on employee expenses to stay afloat. Since the first wave of Covid-19 in 2020 central bank-induced increase in the money supply globally created a wave of demand that spurred growth for most industries.
However, with the inflation rate heating the global economy central banks have shifted course towards monetary policy tightening raising interest rates and forcing businesses to review their operating expense, focusing more on sustaining growth via cost containment.
The situation is somewhat different in Nigeria. Rather than focus on cost-cutting via corporate downsizing, some of Nigeria’s largest companies are cutting costs via other means. There are no jobs to cut as most employees have left the country for a better life in western countries offering immigration opportunities. In Nigeria, reverse downsizing has happened.
Instead of drawing up a list of employees to downsize, companies are now actively looking for new ways to retain what they have, including their best and worst hands. The great resignation has hit some of Nigeria’s largest companies so hard HR executives are seeking creative ways to stem the exits.
Nairametrics expects this trend to continue right into 2023 when the new admission sessions begin for most western countries. More Nigerians will likely leave this year for overseas taking on the opportunity provided by the countries. Spain, the UK, Ireland, France, Canada, and even Qatar are all offering different immigration opportunities for skilled workers. This will be a major threat for companies in Nigeria looking to retain their talent pools.
At a closed-door session mid-last year, human resource executives of some of Nigeria’s largest banks and multinationals brainstormed on how to mitigate the impact of the job losses on their businesses. Some of the multinationals claimed they now offer their staff an opportunity to register in their global office in the country they have emigrated to while still working for them in Nigeria but remotely. This way, the talent is still retained only that they lose the physical presence of retaining the employees.
Others, now accept employees need to hold on to part-time jobs and side hustles relaxing decade-old policies threatening to fire employees who keep multiple jobs. Training sessions and seminars are held for staff looking to learn vocational skills that can help them earn incremental income. Some offer tech hackathons offering to back promising innovative ideas that show opportunities to scale.
Some have also introduced differential compensation for highly skilled employees, especially in areas such as software development. Apart from paying them significantly higher salaries, they also fast-track their promotion to higher roles.
Others are revamping their training schools introducing faculties that churn out graduates trainees faster and more efficiently. There is also intense competition for talents who have seized the opportunity created by a talent vacuum to either fast-track their promotions locally or get jobs in other competing firms at a higher grade level and increased salary.
While large corporations will avoid massive downsizing in the first half of this year, smaller tech-based firms have no choice but to cut jobs. Most announced job cuts already towards the end of 2022 citing tough economic environments, weakening demand and pressure from their investors to turn in profits.
Even this might be a foolhardy approach in an increasingly competitive world for limited talents. The challenges faced globally are also due to central bank policies, which ironically triggered the post-Covid-19 boom. Rather than embark on widespread job cuts, startups should consider pay cuts or deferred compensations. Whilst this is not a silver bullet, it could reduce the risk associated with rehiring talents when things revert to normal.
The great resignation is teaching us that globalization is not just about conquering new markets for products and services. It has now gravitated towards talents, youth and a skilled workforce. If the last four decades have been about natural resource exports, Africa with its young population will have to contend with human resource exports. Unfortunately for governments, it has no control over this value chain.