Fewer new jobs at top private banks. Digital adoption, lower attrition to blame
Experts said branch operations now require fewer people due to wider adoption of digital channels, while much of the hiring done during covid has been absorbed.
Mumbai: Hiring across India’s leading private sector banks fell to its lowest in at least three years in FY25 due to a decline in attrition and a major shift to digital banking, showed a Mint analysis of latest annual reports. Hiring is likely to stay subdued in the current fiscal year as well.
The analysis covered HDFC Bank, Axis Bank, Kotak Mahindra Bank, Federal Bank, IndusInd Bank, and Yes Bank. These banks added a total of 131,471 employees in FY25, reflecting a 32.3% decline from 194,213 in FY24 and a 15.8% decline from 156,140 in FY23.
Experts said branch operations now require fewer people due to wider adoption of digital channels, while much of the hiring done during covid has been absorbed. At the same time, banks have been building internal talent pipelines, prioritising promotions and in-house programs over lateral recruitment. New roles are largely concentrated in areas such as technology, artificial intelligence, cybersecurity, and wealth management, they added.
“At any branch, walk-ins have reduced, and banks are able to deliver the same quality with fewer people. Customers are using alternate channels like phone banking and net banking," said Upasana Agarwal, practice head and partner at ABC Consultants, an executive search and talent advisory firm.
Hiring at the largest private lender HDFC Bank declined by 44% year-on-year to 49,713 in FY25. Similarly, Axis Bank’s hiring fell by 22%, from 40,724 in FY24 to 31,674 in FY25.
The data pertaining to fresh recruitment has been available since FY23. Before this, net additions, after accounting for exits, are available for most banks, making the data patchy.
Veinu Nehru Dutta, senior managing partner at executive search firm FyneHand Consultants, said banks have a lot of internal talent, and several lenders prefer to give them a chance rather than go for lateral or external hiring.
She added that expansion is also limited, with only a handful of new branches being opened, which means fewer roles on the ground.
In FY25, ICICI Bank, HDFC Bank, and Axis Bank reported attrition rates of 18%, 22.6%, and 25.5%, respectively. Their comparative attrition rates in FY24 were 24.50%, 26.90%, and 28.80%, respectively. Attrition rate is the number of employees who left during the year, expressed as a percentage of average number of employees during a particular year.
IndusInd Bank said it has taken several key initiatives during the last two financial years to help bring down its attrition level from 50.9% in FY23 to 29% in FY25. These initiatives include succession planning at the senior levels and enhancing behavioural skills and competencies in areas of leadership, managerial and interpersonal effectiveness, according to the bank's spokesperson. The bank's hiring was largely flat in FY25.
While emails sent to HDFC Bank, Yes Bank and ICICI Bank remain unanswered, Kotak Mahindra Bank, Federal Bank, and Axis Bank said their spokesperson were not immediately available for a comment.
Lull in hiring to continue
Mint reported in April that leading private sector banks expect the moderation in attrition seen in FY24 to continue into FY25. This could also translate into slower hiring this year as fewer roles open up for new recruits. The trend is being driven by a weak entry-level job market, a greater focus on developing internal talent, and a shift by some lenders towards contractual staff instead of permanent hires.
Bankers had then said lenders hired in excess after the pandemic and underestimated the growth of digital services. This led to an increase in attrition in FY22 and FY23 as people quit banks in hordes to join insurance, e-commerce and logistics firms in customer-facing roles like sales and services. Thereafter, though, the outflow has slowed.
Agarwal of ABC Consultants said banks are likely to be careful in hiring in FY26. “I will not say it will slow down 100%, but it will be fairly cautious. It could be spread throughout the year with quarterly revision."
She added that multiple factors could weigh on recruitment including global market conditions, technology shifts and changing consumer demand patterns.
“It is very stagnant, it is not really going to go up in numbers," agreed Dutta.
Hiring will be high in segments like non-banking financial companies (NBFCs) and housing finance companies. “From a regulatory perspective, they (banks) are very particular about all key managerial personnel (KMP) hiring relevant experience, compensation, bonus, employee stock ownership plan (ESOP). So, I think that is going to be keeping a check on how they are hiring, who they are hiring," Dutta added.
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