Banks turn into poaching grounds for other sectors

Attrition at senior and middle levels remains restricted so far. Photo: Mint
Attrition at senior and middle levels remains restricted so far. Photo: Mint


India’s largest private lender HDFC Bank has seen over 43% attrition among frontline and sales officers

Frontline executives at top private banks are heading for the exit, trying to make the most of a post-covid surge in sales job openings. Among their new destinations are insurance, telecom and financial product companies.

While HDFC Bank, India’s largest private lender, has seen over 43% attrition among frontline and sales officers, IndusInd Bank has attrition at the junior level, in line with what is being seen in the industry. According to bankers and industry experts, many companies with sales and customer-facing functions, where employees chase targets in high-pressure environments, are seeing the same trend. However, attrition in the senior and middle management levels remains restricted so far.

“The attrition is higher than where we were pre-covid and is something we need to improve on. We have put a lot of steps in place to arrest that," said Vinay Razdan, chief human resources officer, HDFC Bank. Razdan said that a large organization with many foot soldiers would inevitably have attrition.

HDFC Bank had 141,579 employees on 31 March, and its overall attrition stood at 19.1%, according to its annual report. Razdan admitted that attrition in the frontline category was around 38% before covid-19 but pegged the recent rise to a surge in jobs after two years.

To combat attrition, HDFC Bank is crafting a benefits programme for its frontline and sales executives and has created a grade within sales officers to augment career progression. It will also have more human resources personnel at the regional level who can be touchpoints for employees.

“All these people are looking to have careers. So we are looking to streamline how we can better our intake in the sales officers organization and then in a reasonable time frame—within one-two years—identify the better performing sales officers and transition them into the bank," Razdan said.

Sumant Kathpalia, managing director and chief executive of Indusind Bank, said that at the junior level across the industry, there is a churn of about 30-32% in technology and the frontline support functions. “Overall, managing this is not possible beyond a certain point," Kathpalia told reporters on 20 July.

Recruiters say banks have turned into poaching grounds for other sectors. “The comprehensive and rigorous training and development that banks put in to develop them make them the right place to hunt for sales talent," said Rituparna Chakraborty, co-founder and executive vice-president of TeamLease Services, a recruitment company.

The surge in retail, insurance and healthcare jobs, which focus on selling products, has made the banking sector vulnerable from the talent retention perspective. In fact, Chakraborty says the demand for sales profiles is second only to tech talent.

“Hike for sales jobs and revisions has been on the higher side and is second only to tech talent as of today,“ she added. The tech sector, since the latter half of 2021, has seen record high attrition as employees receive multiple job offers, impacting balance sheets.

A senior banker said on condition of anonymity that while banks have started rolling out pay hikes, they heavily depend on benefit programmes such as easier vehicle loans and career movements than salary hikes alone.

“There cannot be much difference in salary hikes this year because it impacts companies. Hikes are often rolled out during the year for top performers, which are better than blanket hikes to all," said the banker cited above.

The pressure among lenders, which trickles down to the frontline staff, is another reason for mass exits. The revival in credit growth after two years of weak demand has prompted banks to set steep internal targets, leading to a greater workload on the sales staff.

“If you are in sales, you have a number you need to clock, and if you do not, either you do not get the incentive, or it may come down to your survival in the job. It is always a high-pressure environment for a salesperson. Whether it has increased over the last two years, obviously it has," Razdan said.

While the exodus is mainly in the frontline and sales roles, the senior order remains stable, and the attrition levels have not changed much. Private banks are working on long-term incentives and rejigging compensation structures to retain senior talent.

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