Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / Yes Bank lays off 392 sales team employees
BackBack

Yes Bank lays off 392 sales team employees

Yes Bank lays off 392 sales team employees

Yes Bank chief executive Rana KapoorPremium

Yes Bank chief executive Rana Kapoor

Mumbai: Yes Bank Ltd has shown the door to 392 employees from its sales team for non-performance.

Primarily because of these cuts, which happened in the first quarter of this year, Yes Bank’s total employee strength stands at 3,150, down from 3,542 as on 31 December.

Yes Bank chief executive Rana Kapoor

“Other banks also fire their employees in the same manner but, since they are all outsourced and are not on the payroll of the bank, the numbers don’t get noticed," he claimed.

“In order to foster a superior and consistent service delivery culture, all human capital (including sales talent) are permanent employees of the bank. This not only enables greater commitment and service delivery, but also gives greater comfort to customers," said Deodutta Kurane, president, human capital, Yes Bank.

“Individuals who do not fit into the service culture and performance parameters of the bank mutually go their own ways in order to sustain the highly motivated business environment of the bank," Kurane said in an email response to Mint’s query.

Yes Bank is one of the most aggressive banks in the industry with stiff targets for employees. The bank’s fourth-quarter earnings jumped 108.7% to Rs64.5 crore compared with Rs30.9 crore a year ago.

“It’s no surprise that people in the sales team get fired because it’s a very performance-oriented task," says consultant Manish Sabharwal, chairman of TeamLease Services Pvt. Ltd, which provides temporary and permanent employees.

Outsourced employees are called direct sales agents (DSAs). They get trained by the bank but are typically on the payroll of a third party, the supplier of human resources.

In a DSA model, the staff provider takes the responsibility of achieving the target. However, outsourced sales agents get around 30% less than a regular bank employee and may or may not get the same benefits.

“Quality comes at a price. Normally, the sales agents do the job properly but they might not do it as well as they could have if they were the regular employees of a bank. Some of the companies who have been using the DSA model are now moving away as sometimes they are disillusioned with the quality," Sabharwal said.

ICICI Bank Ltd, the largest private sector lender, employs the maximum number of DSAs.

HDFC Bank Ltd, which also follows a DSA model, shifted a majority of its sales force to its direct payroll in 2007. The bank’s headcount rose to 32,000 in quarter ending September 2007, up from 18,000 in the year-ago quarter, on account of inclusion of a large external sales force.

Many banks which were earlier fully dependent on the DSA model have now started floating their own direct sales force.

According to an executive with another large private sector bank, who does not wish to be named, meeting sales target is not a big problem for DSAs. “The problem lies in the quality of service. When we employ DSAs, we spend considerable time and resources training them but about 25-30% of them leave after the training," he said.

“While realizing that outsourcing is important for the line of business that we are in, we have decided to float our own direct sales force," said Sujan Sinha, senior vice-president, retail assets and retail banking at Axis Bank Ltd, another new private bank.

The bank has floated a separate subsidiary, Axis Sales, to handle selling retail loans and credit cards. “We run both the models parallel. It motivates a hardworking DSA to shift to the bank’s direct payroll," Sinha said.

Yes Bank says it is scouting for new employees in colleges and other institutions. The bank has already identified about 200 potential hires.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 21 Apr 2008, 12:13 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie