“Attrition seen in FY23 was way beyond the last five year’s average and this is not good for the sector in the long run. How do you build succession and third layer of leadership if this is the case,” said a highly placed source aware of the matter. “Hence the central bank has started engaging with private banks to understand what’s going wrong for them.”
Recently, Shaktikanta Das, RBI Governor, in a conference held by a media outfit acknowledged that high attrition of employees in banks is a cause of concern. The meeting with private banks CEO is said to have taken place just ahead of Diwali.
To put things in perspective, average attrition rate among private banks was 30–35 per cent in FY23. At the entry level, the rate was seen at a whooping high of 40–45 per cent across most private banks. Even at the middle level, it was around 20–25 per cent for the industry, defying the long-term employee churn ratio of 10–15 per cent seen prior to pandemic for this category.
Too much to handle
According to sources, when enquired by the central bank whether it was for reasons of inadequate on-job training or skills mismatch that attrition is high, bankers responded that the problem is structural.
“Today to be a teller at a branch or be a branch manager of a bank is an excruciating job. Employees at a branch spend 14–16 hours at work and a major part of their time is spent documenting the day’s work. To top it, there is sales pressure on every branch employee as well. An MBA graduate at entry level would prefer to be a sales or marketing profession at a retail company rather than a bank,” said a bank CEO who didn’t want to be named. “In variably, he ends up learning sales skill from the bank and becomes employable across sectors”.
Another bank CEO said that at a branch manager level, the issues are different. “From an accountability perspective, the branch manager’s is almost equal to that of a CEO. If he has handled a few queries or circulars from the regulator, he becomes a hot commodity,” said the CEO. He either gets poached by competition for better salary or jumps industries, said the executive.
Citing that the banking industry is going through the ‘Big 4’ moment perennially faced by the consultancy firms, bankers have requested the regulator to see if workload at the branches can be streamlined.