Banks to witness higher attrition this year, say experts
PTI Mumbai Last Updated: May 4, 2015 | 09:29 IST
Banks are likely to witness up to 50 per cent increase in attrition this year compared to last year as new players entering the sector would prefer seasoned industry professionals to grow their operations, say experts.
The two new banking licences, that were given by RBI to infrastructure financing firm IDFC and micro-finance firm Bandhan Financial Services, are also expected to create job opportunities across the board in the banking space, they said.
"The new banks are expanding their teams at a rapid pace and existing banks are grappling with talent retention. The existing players are looking to either rebuild their teams to pre-crisis levels or at expansion in their verticals to make the most of favourable economic sentiments.
"In fact, we expect 50 per cent higher attrition level compared to last year across all revenue-generating functions in banking," Michael Page India Regional Director Nicolas Dumoulin told PTI.
While, he said for support functions the attrition levels are likely to be higher by 25 per cent compared to last year.
GlobalHunt Managing Director Sunil Goel said, "Large pool of jobs is expected to be created wherein the maximum number of the jobs will include the bottom of the pyramid, but yes existing banking and financial professionals will get recruited by the new players so the attrition will get added another 15-20 per cent for current companies."
"Though all the existing players will try to retain talent by giving large portfolio and decent compensation, but boom in the industry will bring the attrition higher than ongoing rate", he opined.
Dumoulin said that this trend has already picked up pace over the last six months as new entrants, foreign banks- both existing as well as new entrants, and global pension funds (setting up offices in India) are driving the current recruitments in the market adding to higher churn in the market. Recently Qatar-based Doha Bank commenced operation in the country.This attrition, Dumoulin said, will coincide with the appraisal cycle.
PeopleStrong Co-Founder and CEO Pankaj Bansal said as new market entrants appear, there is bound to be an increase in attrition.The new players would want to hire seasoned industry professionals to set up and grow their operations, he said. "The existing players would need to hire talent from internal or external sources. As far as attrition number are concerned we foresee an increase of about 10 per cent from existing attrition rates," he added. Most of these experts believed that this spurt in demand for talent in the banking sector will attract talents from sectors like retail, FMCG, consumer durable mostly in the managerial grade.
Goel, agreeing to this view, said people will get attracted from insurance, retail, telecom and pharmaceutical sectors mostly for the sales and relationship management roles.
Further, Dumoulin said, there is a demand trend for talent in the banking space by industry players like e-commerce firms, NBFCs and other industry players, which has also contributed to the higher churn.
However, Bansal said, "we do not foresee any change in the overall hiring mix of BFSI sector. The banking sector would continue to hire banking experts."