RismadarVoice Reporters
September 21, 2026
Rising operating costs and weakening consumer spending are forcing some Nigerian businesses to rethink traditional salary structures, with employers increasingly tying workers’ earnings to sales and individual performance.
The shift is emerging across businesses including retail outlets and service companies, where employers say declining patronage and high overheads are making fixed monthly wage bills increasingly difficult to sustain.
Under some of the arrangements, workers retain a smaller basic salary while commissions account for a substantial portion of their monthly earnings. In other cases, remuneration is tied almost entirely to revenue generated by individual employees.
The development effectively transfers part of the financial risk associated with weak sales from businesses to their workers, raising concerns about income stability at a time when households are already confronting elevated living costs.
BUSINESSES TURN TO PERFORMANCE-BASED PAY
One business owner, David Amaechi, said customer traffic at his consumer electronics retail operation had fallen by more than 40 per cent compared with the previous year.
According to him, the company faced the choice of reducing its workforce or restructuring employee compensation.
He said the business consequently introduced a system under which a basic salary covers part of workers’ expenses while about 70 per cent of their potential take-home pay depends on sales performance.
For employers adopting the model, the attraction is straightforward: labour costs rise when revenue increases and fall when sales decline.
The arrangement can therefore provide businesses with greater flexibility during periods of uncertain cash flow, although employees assume greater income risk.
WORKERS FACE INCOME UNCERTAINTY
For workers, however, commission-heavy remuneration can make monthly earnings difficult to predict.
A sales representative, Chioma Nnaji, said her employer recently reduced basic salaries by 60 per cent and introduced a five per cent commission linked to business generated.
She said declining customer patronage had subsequently reduced her monthly earnings to less than half of what she previously received.
The experience highlights a wider concern surrounding commission-based employment: workers may be expected to generate more sales at precisely the time consumers are cutting discretionary expenditure.
EXPERT WARNS OF WIDER ECONOMIC EFFECT
Labour economist Abiodun Shonubi described the development as an increasing transfer of market risk from employers to employees.
He argued that commission structures have traditionally been common in industries such as insurance and real estate, where individual sales performance is closely connected to revenue generation.
Their increasing use in conventional retail and other service businesses, however, could indicate greater financial pressure on employers.
Shonubi also warned of a potential economic cycle in which falling consumer spending weakens company revenues, businesses respond by reducing guaranteed employee earnings, and workers consequently have even less disposable income to spend.
NEW REALITY FOR EMPLOYERS, WORKERS
Commission-based remuneration is not necessarily replacing fixed salaries throughout Nigeria’s formal labour market, and available reports do not establish how widespread the practice has become nationally.
However, accounts from employers and workers indicate that some businesses are increasingly experimenting with performance-linked compensation as they seek to control payroll costs.
For companies struggling with declining patronage, the model offers a way to connect wages more directly with revenue.
For employees facing rising household expenses, however, the same arrangement means an increasingly important part of their income may depend on sales they cannot fully control.
The emerging trend reflects a difficult balancing act in Nigeria’s labour market: businesses are trying to contain costs and preserve jobs, while workers are seeking the certainty of regular income in an increasingly expensive economy.
