HDFC Bank, Axis Bank and Kotak Mahindra Bank have recorded an attrition of between 34% and 50%, large PSBs like State Bank of India, Bank of Baroda (BoB), Punjab National Bank (PNB) and Canara Bank have reported an attrition of less than 5% as they are seen as more stable employers.
Chairman Dinesh Khara told ET that an elaborate recruitment process and regular training and development are some of the reasons PSBs can retain talent.
“People who sign for a PSB job have usually made up their minds to serve because they go through an elaborate recruitment process which is not the case in private sector banks. Secondly, our staff regularly go through training and development programmes which help them upgrade their skills and keep them motivated which is also not done regularly in private sector banks,” Khara said.The trend is true across large PSBs. Canara’s attrition rate was 4.26%, while at BoB and PNB it was just above 1% in FY23. Besides public sector job security, the entry- to mid-level salaries at PSBs are much better in comparison with those at private banks.”A new officer at a PSB could get anything between ₹60,000 and ₹80,000 per month today, which is sometimes 30% to 40% higher than private sector employees. This gap continues until the mid-level, after which private sector salaries rise sharply and there is no comparison after that,” said a public sector bank CEO, explaining the divergence in attrition.Benefits package
Higher salaries and public sector perks like housing, pension and easier work hours make people stick to their PSB jobs longer.
Vinay Razdan, chief human resources officer at HDFC Bank, said over the last few years banks have experienced a marked shift in the mindsets of younger talent. “Their willingness to invest in building a career versus taking on the next higher paying job seems to be on the decline…This has led to more volatility in the talent market in the last financial year. All major employers across sectors are facing this dilemma,” Razdan said.
Rajkamal Vempati, head of human resources at Axis Bank, said market expansion and increased branch network in private sector banks have led to a spike in demand for banking talent over the last two years. “This has led to higher private sector bank attrition levels compared to public sector banks. About 70% of the frontline staff are rotating within the private sector banking space,” Vempati said.
A Kotak spokesperson said that the 50% attrition for the bank is in its junior management. “Mid is less than 20% and senior is about 10%. Our attrition levels are largely in sales, service and call centre and some in collections. At the industry level, there is a strong demand-supply gap, which continues,” the spokesperson said.
Yes Bank did not respond to an email seeking comment.
HR consultants believe attrition in private sector banks reflects the tough work culture.
“Private sector bank employees are expected to stretch their work hours, walk the extra mile, respond to customers with warmth and speed, be proactive, spot opportunities and cross-sell,” said Aditya Narayan Mishra CEO of Ciel HR Services.
Ryan Lowe, HR consulting leader, financial services at EY, said that at public sector banks, the demographics of those who typically join at entry level are different.
“Their aspirations revolve around job security, stability, and access to good benefits and pension. At junior to middle levels in PSBs the overall compensation plus benefits (housing, allowances, etc.) proposition is quite attractive and not too far away from the private sector. As PSB employees move up the hierarchy, they get access to significant benefits, prestige and power, and being behind the private sector on the compensation front becomes a trade-off acceptable to many,” Lowe said.