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Attrition rates in private banks jump to over 30% on increased competition
July 21, 2023
Employee turnover rates for major private banks jumped to over 30 percent in FY23 led by increased competition in the market and high churn especially in technology and sales roles.
Most players such as Axis Bank, Kotak Mahindra Bank, and HDFC Bank have reported an increase in turnover rates, which also include attrition on account of death, superannuation, disciplinary action, and exit of low-performance employees.
For Axis Bank, the high rate was despite the absorption of 3,200 employees from Citibank India following the acquisition of the latter’s consumer banking business effective March 2023. However, the bank said that 46 percent of the vacancies in FY23 were filled internally.
In its annual report, HDFC Bank said very high attrition levels were witnessed in the IT segment and frontline staff, with MD and CEO Sashidhar Jagdishan attributing it to the post-Covid phenomenon “which might have prompted the younger workforce to“ recalibrate what they “want from their lives”.
The bank also quoted an HR trend analysis by consulting firm Aon, which estimated the overall attrition rate for the banking sector at 24.7 per cent between January 2022 and September 2022.
Banks insist that the bulk of the attrition is at the lower and entry levels. Earlier this week, HDFC Bank CFO Srinivasan Vaidyanathan said the highest attrition of 40-50 percent was in entry-level positions, whereas the rate for mid-level positions was mid-20 to 30 percent, and for senior-level positions much lower at around 7 percent.
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