A Two-Tier Workforce in Nigeria’s Banking Sector: A convergent mixed-methods investigation of differential treatment, career progression, work motivation, and turnover intention

This study presents a comprehensive analysis of the two-tier workforce system in Nigeria’s commercial banking sector, examining the relationships among perceived differential treatment, career progression, work motivation, and turnover intentions for contract and permanent employees. Employing a convergent parallel mixed-methods design, quantitative data were collected from a stratified random sample of 450 employees (250 contract, 200 permanent) using validated psychometric instruments. At the same time, 30 semi-structured interviews provided qualitative insights into employee experiences. Analytical methods included independent-samples t-tests with effect sizes, hierarchical multiple regression, multigroup moderation, and bootstrapped mediation. Thematic analysis was conducted to integrate qualitative findings. Results indicated that contract employees experienced significantly higher perceived differential treatment (M = 4.28 vs. 2.28; Cohen’s d = 3.65), lower career progression (M = 2.10 vs. 3.85), reduced work motivation (M = 2.65 vs. 4.05), and greater turnover intentions (M = 4.20 vs. 2.15) compared to permanent staff. Perceived differential treatment emerged as the strongest predictor of turnover intention among contract staff (β = 0.67, p < .001), with multigroup moderation analysis confirming a significantly stronger effect for contract employees (ΔR² = .04, p < .001). Mediation analysis demonstrated that career progression and work motivation partially mediated this relationship, yielding a significant total indirect effect (β = 0.21, 95% CI [0.13, 0.30]). Thematic analysis identified four principal themes—“The Glass Wall is Real and Thick,” “We Are Here, But We Are Not In,” “The Motivation Calculus: Why Bother?,” and “Stuck Between Hope and Exit”—which reflected and enriched the quantitative findings. This research advances Equity, Psychological Contract, and Social Identity theories within an underexplored emerging-economy context, offering the first integrated, empirically validated model that links differential treatment to turnover through career and motivational mechanisms in Nigeria’s banking sector. The findings challenge cost-centric justifications for workforce segmentation by estimating substantial hidden costs (approximately ₦2.3 million per turnover event per contract employee) and provide actionable recommendations for management, policymakers, and contract employees.