Private sector banks have added more employees than public sector banks in the last decade ending in FY24 although the rate of addition has started declining in a sign of a changing employment strategy in the private banking system. The six top private banks in India together have employed employees up to 74, 000 after a consideration of raising their employee strength by about 14%. It thereby reached an employee figure of about 610, 000 at the end of the financial year which was March 2024. On the other hand, the top six PSBs cut down their number of employees by 2% from their aspiring target of 686609 from 620512 as of the end of FY24 based on the latest annual reports.
Not a single public sector bank recruited anyone in the six months following the mergers, apart from limited increments witnessed in some establishments, Welingkar said.
Of the many changes in the banking industry over the past years, the merger of several public sector banks, done four years ago, can be singled out as the start of a perceptible slowdown of hiring in this segment. A senior official of a public sector bank elaborated, “As some large public sector banks have merged in the recent past, there has been a trend to make optimum use of existing human resources. The additional employees brought in by the mergers meant that there was no urgent requirement for recruitment which led to organizational efforts to manage operational work with a larger number of employees.
This deceleration in fresh recruitment can be traced back to the last consolidation which took place in the banking sector in 2020 where 10 state-run banks were merged with four large banks. The restructuring facilitated efficiency in these banks since it brought in operation integration coupled with a reduction in the duplicity of employees, subsequently putting pressure on these banks to hire new employees as little as possible.
Private Banks Go on Hiring Spree to Expand Their Business
their network across the semi-urban and rural market in a big way with the employment generation and business generation taking precedence over everything else. Of the private sector banks, HDFC Bank was the most aggressive in its employment, hiring approximately 40,000 employees in the last fiscal. Next, the addition during the year by Axis Bank was 12,400 employees, and by ICICI Bank it reached nearly 9,200.
An official from the human resources department of a leading private bank said: “Private banks are nowadays opening new branches in semi-urban and rural areas and this requires more number of employees Low did he receive a greater emphasis: The head of retail banking at a leading private bank observed: “Private banks are expanding in scale and they are opening branches in low-density areas, that requires more people. As well, private banking is growing at a faster rate than
Growing Loan Demand leads to Employment of Staff in Credit Departments
This has also been led by the increment in the demand for loans especially in the retail division, thus the hiring exercise of more personnel among the private banking institutions. The extent to which this hiring push would intensify was expected to gather further pace as we inch nearer to the festive season.
Workforce demands the sign of rising experience & maturity, notes Krishnendu Chatterjee, VP & Business Head BFRS, TeamLease Services During a recent online interview he stressed an unending demand for banking professionals in the Indian market. There is a large need for human resources at private banks – especially in the retail lending division and several private banks have entered into the microfinance business making the demand high for people with sales and collection experience, especially in rural areas.
An Increasing Workforce of Private Banks on a Steady Basis
The hiring trends in the case of private sector banks have also been fairly buoyant in the last several years. Six of the leading private sector banks in India–HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, and Yes Bank –increased the total number of employees from 400,000 in March 2021 to 610000 during the period March 2021 to March 2024. This is an incredible 53% increase in the space of three years.
This rise in hiring also portrays the intense consolidation strategies that are being embraced by private banks to enhance their market footprint, especially in emerging markets. These banks will need to continue being able to attract and retain talent for them to sustain their growth in the growing and competitive environment of banks.
Conclusion: The Separation of Working Banking Sectors
The variation in the employment skyline between Public sector banking and the new generation private banks depicted contrasting facts and figures in the new scenario of the Indian banking sector. The new picture of the PSBs’ human capital management looks at internal efficiency and minimization of the headcount after the consolidation while private players are still on the hiring spree expanding their teams to achieve rapid growth in new business opportunities. Situation If there is one thing that the financial market has done in recent years, it is contesting how human resources can be best managed in this challenging environment.
Therefore, not only are private banks hiring at a faster rate than public ones; but they are also set to become dominant actors in the growth of the banking industry in India, thus taking advantage of a new economy that requires human capital in terms of number and flexibility.
