Private employment agencies in Nigeria are facing mounting operating costs, shrinking profit margins and regulatory uncertainties, raising concerns about the sustainability of recruitment and outsourcing businesses amid persistent economic pressures.

The association said inflation, energy and transport costs, exchange-rate volatility, compliance expenses and delays in contract payments were eroding agencies’ already narrow margins.

The President of the Employers Association for Private Employment Agencies of Nigeria (EAPEAN), Nzeribe Okegbue, warned that overlapping regulatory demands, uncertainty over policy implementation and competition from unlicensed operators were creating an uneven business environment for licensed agencies, which play an increasingly important role in workforce management, recruitment and employment services.

Okegbue spoke at the association’s 15th yearly general meeting yesterday, where he called for clearer and more consistent regulation, coordinated inspections, timely licensing processes and proportionate compliance requirements to improve the operating environment for private employment agencies.

According to him, the N70,000 national minimum wage, where applicable, has increased the importance of realistic contract pricing and timely reviews of service rates, as agencies contend with rising costs of delivering services to client organisations.

He said the challenges must be addressed without compromising workers’ welfare, statutory obligations, fair recruitment practices or service quality.

He said private employment agencies operate at the intersection of business competitiveness, labour-market regulation and workers’ rights, providing employers with flexible staffing arrangements, specialised skills and workforce management services.

However, Okegbue said the sector’s ability to support business productivity and job creation depended partly on a more predictable policy environment and effective implementation of government reforms.

He noted that businesses across Nigeria continued to grapple with elevated operating expenses, financing constraints, exchange-rate uncertainty, infrastructure deficits and pressure on consumer demand.

While ongoing reforms in foreign exchange management, public revenue mobilisation and fiscal policy were intended to improve macroeconomic stability and investor confidence, the EAPEAN boss said their benefits would depend on how quickly they translated into lower inflation, predictable costs, improved infrastructure, stronger purchasing power and increased productive investment.

“For employers and employment-service providers, macroeconomic stability is not an abstract objective,” he said, adding that it directly affected recruitment demand, payroll costs, contract pricing, business continuity and the ability to create decent jobs.

The EAPEAN president identified regulatory duplication and the activities of unlicensed operators as additional pressures on compliant businesses, arguing that government support should include stronger enforcement against illegal operators and structured engagement with recognised industry representatives.

He said licensed agencies should be supported to operate responsibly, while regulatory processes should provide greater clarity on compliance expectations.

Okegbue also highlighted talent emigration and skills shortages as challenges making it more difficult for agencies and client organisations to retain experienced personnel, while unreliable infrastructure continued to increase service delivery costs.

He urged employment agencies to invest in staff development, technology, transparent recruitment processes, sound governance and responsible workforce practices to strengthen their competitiveness.

He added that digitised public services, reduced regulatory duplication, improved infrastructure and regional cooperation could help lower the cost of doing business and encourage productive investment.