The banking sector has grown from a few institutions primarily involved in deposit acceptance and trade finance into complex multiplayer markets where many commercial banks, financial institutions, and specialized banks are operating with various products and activities. Like any organized sector, banking requires a multi-layer workforce for its different requirements of professionals and support staff.
“Attrition is a serious issue for banks and for good reason. Prime human resource concerns such as skills shortage and high attrition levels are causing bottlenecks to organic growth. Over the last 30 years, there has been a staggering increase in the size, range, and activities of banks in India. Bank branches have risen considerably during this period. The business profile of banks has transformed dramatically to include non-traditional activities such as merchant banking, mutual funds, bill payments, new financial services and products and human resource development.”
With RBI issuing banking licenses to new players like IDFC bank and Bandhan Financial Services a high demand is being created for skilled banking professionals in the financial sector. Add to that the entry of payment banks like Airtel and Paytm which opens up wider switching options for top talent from the traditional banks. The new banks are expanding their teams at a rapid pace, and existing banks are wrestling with talent retention. The current players are looking to reconstruct their teams to make the most of the favourable economic sentiments. Though all the existing players will try to retain talent by giving broad portfolio and appreciable compensation, the boom in the industry will make attrition higher than the ongoing rate. The moral is as new market entrants appear, there is bound to be an increase in attrition.
The big losers are the Public Sector Banks which grapple with the difficulty of paying competitive market-linked salaries. This obviates the ability of employees to have a long-term career with public sector banks. Moreover, specialists such as legal experts and chartered accountants expect a higher salary than non-specialized workers. Also, PSBs have been facing human capital challenges for a while now, following a recruitment freeze in the 1990s. The challenges are not only quantitative but also qualitative in nature. These can be met only by skill development, competition, and leadership. It is easier for new private banks to poach talent from PSBs as they have the ability to recruit the locals in a particular state, whereas, the PSBs have to conduct an all-India examination for the same. At the higher scales (say beyond deputy general manager level) salaries tend to stagnate in PSBs making it easy for private banks to woo them with higher wages. Therefore, the challenge is to find avenues to retain employees besides the age old technique of increasing salaries.
Management Trainee Programme
Management trainees are a widespread phenomenon in many industries where freshly qualified business graduates are engaged by organizations and a certain percentage of these well-equipped professionals stay back with the organization to grow into the footsteps of senior managers. This calls for an institutionalized talent acquisition program aimed at securing the best available management professionals, straight from the premier educational institutions in India. Such a program must foster young leadership by exposing the participants to stimulating roles and projects thereby driving high performance through structured Induction, learning programs, and mentorship by senior cadre. The main aim must be to instill reasonable risk taking attitude and developing leadership qualities among the trainees. However, such a programme can succeed only if it is able to inculcate a repertoire of skills that are unique, valuable and hard to replicate among the participants. The programme must be designed to meet and support the Bank’s future growth plans and challenges. This can be achieved only by making the participants undergo intensive on-the-job training by working on important assignments to build their expertise and confidence.
Employee Stock Option Plans
Offering Employee stock option plans (ESOPs) are a way to make the top management committed to the bank over a longer period. This is a particularly good option for PSBs as they are profit making entities. Hence, this option needs to be explored by taking it up with the government.
Selecting the Right Employee for the Right Job
Everyone in the bank wants to work in their preferred department, location and boss of his/her liking. An administrative deviation from any of these results in lowered job satisfaction. A disgruntled employee not only disrupts the smooth working of himself but also spreads the negativity to others through his/her de-motivated attitude.
Morale/Confidence Boosting Initiatives
Morale boosting of employees have long been overlooked by banks. Human beings need to be appreciated and encouraged constantly. Smart banks must realize this need and take measures to keep their employees driven through encouragement initiatives such as the star of the month awards, periodic get-togethers, sports events, conferences, team dinners and sponsored travel. This is an excellent way to invoke a feeling of cohesiveness amongst employees. Motivated employees have a higher chance of staying loyal to the organization.
Rewards and Recognition Mechanism
Rewards and awards help both the employee and the employer get the maximum from work. It generates a feeling of fulfillment for employees and results in higher productivity for the employer; thereby creating a win-win situation for both parties. Employees like recognition that is unexpected and comes with an element of surprise. Unmistakably, tangible assets such as salary, health insurance coverage, and vacation time are all essential elements that promote employee satisfaction levels. But in addition to physical rewards, it is also imperative that bosses understand and work to fulfill the emotional needs of employees as well. Understanding how to reward employees by ensuring that they feel appreciated enough and acknowledged by management and their coworkers can have an enormously positive impact on lowering the attrition rate.
Listen to your Employees
Banks, in general, are characterized by a very formal set up with a strong emphasis on following the hierarchical structure. Often this creates a tedious milieu for employees to be in, which conditions them to accept the status quo and not take the initiative to provide feedback proactively. The best way to create a more engaging condition to work in is by keeping it informal and embracing the open door policy. Bring in a culture that appreciates listening to employees and encourages them to come up with feedback periodically. This does a world of good for the organization to keep improving. Most organizations mistake feedback to be only a tool of relevant criticism. Instead, you can make it a two-way communication to improve transparency.
“Feedback also achieves the crucial goal of letting the employees know that the organization is watching out for them. It makes them feel that their work is not going unnoticed. An organization that makes its employees feel that their work counts, makes them feel more responsible for the work they do which in turn engenders a deeper sense of responsibility towards the organization itself.”
Introduce Stay Interviews
Banks tend to conduct exit interviews after the employee expresses his/her intention to leave in order to understand the reasons for the employee quitting the organization. However, a better way to understand the same can be to conduct ‘stay interviews’ proactively. This will illuminate the aspects that make employees remain in an organization and the reasons they may not want to continue. This can be accomplished by asking questions such as: What was the most exciting part of your job? Or Which aspect of your current job would you miss the most, if you were to switch to a different role/job? Conducting stay interviews periodically helps the bank to spot potential damage, giving it enough time to take corrective measures. Any organization that respects its employees should consistently work on fine-tuning its policies’ especially the ones that target employee retention.
Author Information:
Devnandha Pathy “Devnandha is a Manager at Yes Bank; completed his PGDM from IIM-Bangalore B.E from NIT- Trichy.”
