MUMBAI: The attrition at private banks has been high in recent years as the workload of employees has increased. Additionally, intense competition from fintechs and new-age lenders has also led to poaching of employees, said experts.
At a recent public event, Reserve Bank of India (RBI) Governor Shaktikanta Das noted that the attrition at private sector banks is high & and that the central bank is closely looking at the issue. In his speech, Das urged banks to build a core team to deal with such issues.
No wonder, bankers have been forced to go back to the drawing board to find ways to deal with the situations. “We are working on more training programmes for employees. It is a work in progress,” HDFC Bank Chief Financial Officer Srinivasan Vaidyanathan said at a recent post-results call, while explaining how the bank is dealing with the high attrition rate.
“The headcount within the bank has not increased but responsibilities have increased. As a result of this, there is a lot of burnout in terms of increased hours put on people. As a result of this, attrition is increasing,” Vivek Iyer, Partner, Financial Services – Risk, Grant Thornton Bharat said, adding that the attrition would be higher at governance functions and branch level functions.
Data from the recent annual reports showed that the attrition at various banks stood at around 34-51% in 2022-23 (April-March). Specifically, the attrition at banks like Kotak Mahindra Bank, IndusInd Bank and Yes Bank stood upwards of 40%.
The regulatory requirements for private banks have increased in recent years. As a result of this, the number of reporting requirements within the bank to the audit committee and the board and the regulator has risen substantially.
The pressure on banks to maintain profitability has meant that they need to keep their operational cost at minimal. As a result of this, the same set of people who run the daily operations have seen an increase in reporting responsibilities, say experts.
“Private banks face an elevated risk of attrition, especially with the entry of new players like Jio Financial Services, aggressively expanding their workforce to meet strategic goals,” says Krishnendu Chatterjee, VP and Business Head at Staffing Firm, TeamLease Services.
Chatterjee added that in recent times, companies tend to prioritise personnel with experience over freshers. This has resulted in talent poaching within banks and non-bank lenders, thereby contributing to the increased employee churn.
Also, even among junior staff, the monthly starting salaries ranging from 15,000 to 20,000 make it susceptible for competitors to lure employees with enticing offers, including a 10-15% salary increment, say experts.
“You have to ask yourself the question as to where people from private banks are going. The next question is what roles, responsibilities and powers does a person get in a fintech, NBFC. The third is whether compensations in private banks are on par with new age banks and fintechs,” says Lohit Bhatia, President- Workforce Management, Quess Corp.
Going ahead, banks must adopt various measures to keep attrition under check. These include establishing robust training programs, upskilling and reskilling of the current talent pool, implementing and efficient onboarding process, and re-evaluating salary structures, said banking experts.
Source: The Financial Express
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