As new-age companies compete for talent by offering attractive salary packages, particularly in the IT sector, lenders are witnessing an abnormally high level of attrition.
Between 30-50% of employees at banks, including HDFC Bank, Axis Bank, IndusInd, and Bandhan, have left the company. The microfinance industry has been the most severely impacted, with companies reporting attrition rates of up to 60% among young employees.
The overall attrition rate of HDFC Bank is 19%, with sales officers seeing attrition rates of well then 40%.
“The bank’s attrition has gone up to 19% with the reopening of the economy post the pandemic-induced slowdown,” said Sashidhar Jagdsihan, managing director of HDFC Bank, at the recently held annual general meeting. “The number is ’embarrassingly’ higher among the youngsters and efforts will be made to reduce it.”
IndusInd Bank, too, is seeing high levels of attrition among the junior staff. “At the junior level the churn is around 32% and it’s happening across the industry in the tech and frontline support staff; managing this is not possible beyond a certain point,” said Sumant Kathpalia, managing director of IndusInd Bank. “At the senior level, we have had no exits at all.”
High attrition levels have persisted in banks across the board, particularly among junior staff drawn to the lucrative salary packets and an increase in talent hunting, particularly in the IT industry. They have resorted to providing benefits like renting housing to new employees from different states and cities. Employees who make less than 25,000 per month are eligible for an education grant for children from Suryoday Small Finance Bank, up to 500 per kid. In July, this had a positive impact on 250 employees.
“We have attrition levels of 35%,” said Baskar Babu, founder-CEO of Suryoday SFB. “We have introduced education allowance and health insurance benefit schemes to retain employees, the limits are the same across all employee levels. We have also introduced free group accommodation for junior staff who come from outside Mumbai to ensure they are saving up on rent outgo.”
“As a policy, we focus a lot on building and developing our staff, we recruit freshers and we have our own training centre,” said Chandra Shekhar Ghosh, managing director of Bandhan Bank. “We have this infrastructure in place where we keep getting people, train them…. To that extent, the impact will be lower.”
According to data from MFIN, the total attrition rate among microfinance lenders is 48.7%, while those on probation – less than six months of employment – is 76%.
