Indian banks set a decadal record with 123,000 hirings in FY23

Mumbai: Indian banks witnessed their highest hiring numbers in a decade in FY23, and the trend is expected to continue in FY24, with top banking sector officials expecting a surge in headcount growth. This growth is likely to surpass the previous year’s record and potentially set an all-time high.

A collective of public and private sector banks posted the highest annual net headcount addition in the last 10 years as they hired 123,000 employees last fiscal, as per latest data released by the Reserve Bank of India.

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The record additions are being driven by aggressive hiring by private banks across functions such as customer interface, lending, assurance, and technology to drive their branch expansion into tier 3 and rural areas.

Net headcount addition in FY23 surged 61% over FY22, boosting the total employee count 7.4% year-on-year to 1.76 million. The sector saw its highest-ever annual net addition in FY11 at 125,000, followed by 124,000 in FY12.

As per an exclusive study for ET by specialist staffing firm Xpheno, the top 15 private banks added on average 350 employees each working day of 2023.

“If we add the replacement hiring count, the onboards per day moves up to nearly 600 per working day,” said Kamal Karanth, co-founder, Xpheno. “This level of talent action could well create the record for highest annual net headcount additions this fiscal,” he said. These include the likes of HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, IDFC First Bank, Bandhan Bank and AU Bank.Top banking sector officials say net staff additions this year are expected to beat the record high of FY11.”Private banks are seeing a mild shift from excessive dependence on digital platforms to good old fashioned branch expansion,” said Abheek Barua, chief economist, HDFC Bank. A rebound in retail credit to households, housing demand and a sharp increase in the credit intensity of the economy are leading to a massive demand for manpower at banks.

“Banks are on a roll as credit intensity of the economy has picked up sharply,” Barua added.

Axis Bank, HR head, Rajkamal Vempati, said: “Everyone is trying to exploit growth opportunities in emerging and rural India. After the previous fintech flurry, now banks are reaching out to semi-urban and rural areas in a big way. SME is also a key growth segment”.

There is a lot of demand for relationship managers, customer interface and branch network people. Axis Bank is likely to grow its manpower by 7-8% this fiscal year.

High attrition amid a war for talent among the major players is also spurring frequent need to refill vacancies.

The average attrition rate of the cohort of the top 15 private banks is at 11% for the last 12-month period, according to Xpheno data. Attrition triggered replacement hiring count is 70,000.

“Record high attrition numbers is prompting many to create a bench,” said Barua.

HDFC, ICICI and Bandhan Bank – among the few to have disclosed quarterly hiring numbers – have together made net additions of nearly 40,000 employees in the first half of the fiscal, according to data collated by Xpheno. The aggressive hiring by the private banks comes at a time when state-run banks have moderated their talent intake.

Madan Sabnavis, chief economist at Bank of Baroda, said: “Private banks are formulating new strategies on physical branch expansion whereas their public sector peers are focussing on digitisation.”

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