1 in 3 private bank staff at entry level quits – Times of India
As the ecosystem becomes more competitive, the demand for skilled talent continues to outstrip supply. A look at the balance sheets of top banks reveals that attrition rates have been steadily increasing over the past two years. Another reason cited for the lack of ‘stickiness’ in retaining talent in the BFSI sector is a shift in the outlook of entry-level workers towards jobs.
Sashidhar Jagdishan, MD & CEO of HDFC Bank, attributes the rise in attrition among ‘non-supervisory staff’ levels (including sales officers) to a post-Covid phenomenon, which may have prompted youngsters to re-evaluate their life goals. “This has led to increased attrition across all sectors. It is a reality that all major employers are grappling with, especially in the BFSI sector,” said Jagdishan. HDFC Bank’s overall attrition rate stands at 34.2%, with the junior staff experiencing 39% attrition. According to Aon Consulting, the overall attrition rate in the banking sector was 24.7% between January and September 2022.
“At the frontline, all of us are witnessing attrition in the 33-35% range. However, attrition in senior positions and the corporate office is relatively lower. Given the growth in the industry and the economy, there are ample opportunities available. We are accustomed to working with this level of attrition, and it is not a new phenomenon,” said Amitabh Chaudhry, MD & CEO of Axis Bank. He emphasised that this was a reality of the industry and one way to address it was by hiring more fresh graduates and providing them with proper training to encourage longer tenures.
According to Yes Bank, the attrition at the staff level is around 43%. “Our attrition is mainly concentrated on the sales side, which seems to be a trend observed across the industry. We are taking this matter seriously, and ideally, we would like to see attrition rates at 25-30%. We are closely examining and working on this area,” said Prashant Kumar, MD & CEO of Yes Bank.
Sanjay Shetty, director of professional search & selection at Randstad India, highlighted that one of the significant reasons behind high attrition rates among frontline staff in the banking sector is the growing importance of automation and digitisation of banking processes. This shift has drastically changed the skills and job profiles in demand. For instance, banks now focus on delivering on-the-go digital services, resulting in certain frontline positions in sales, loan assistance, and customer service being replaced by niche tech positions that drive digital transformation.
Shetty also partly attributes this attrition trend to intense competition. He stated that bank vacancies saw a rise of 40-45% compared to the first quarter of 2022, and hiring activities were up by 10-12% year-on-year. While this is a positive trend, it could also explain the higher attrition rates, as there are plenty of opportunities available for the talent pool.
In banks, attrition among frontline staff surpasses other job categories. Alongside increasing competition, there is a rise in opportunities with flexible work conditions in parallel industries such as NBFCs and fintechs.
Kartik Narayan, CEO of the general staffing business at TeamLease, remarked that following the cleanup of bad loans, there is an aggressive pursuit of growth, leading to a significant demand and supply challenge for frontliners. Most recruitment is from tier-1 and -2 cities, with monthly starting salaries between Rs 20,000-25,000, making it easy for rivals to poach employees with a 10-15% salary increase.
Narayan added that while the focus is on speedy deployment, frontline staff need to undergo more training to enhance productivity. Without a performance incentive component, their salaries do not cover the cost of living, leading to higher attrition rates.
The data shows an infant attrition rate of 3-4% (within 30 days of joining) out of the 9% attrition observed each month, said Narayan.
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