Employee retention and attracting talent have emerged as latest challenges for public sector banks. As the government steps on the pedal to boost financial inclusion and rural expansion, public sector banks are racing against time to fill in a large number of vacancies in the next two years.
Finance Minister Pranab Mukherjee in a meeting with Indian Banks Association (IBA) last month said banks would have to resort to technology and business process re-engineering to reduce the gap created by staff shortage and improve overall manpower efficiency.
A proper human resources plan outlining a promotion and transfer roadmap could be chalked out by bank managements in a bid to address the issue, said a source who did not wish to be identified.
About 35 per cent of public sector banks’ employees are set to retire by 2012. At present, public sector banks engage around 8 lakh employees.
The attrition rate in state- owned banks has increased significantly in the last few years, said a senior executive of a public sector bank.
“The other problem is that there is talent crunch and a reluctance to join a government bank as they do not see it challenging enough to offer any concrete career growth path,” the executive told HT on the condition of anonymity.
Attrition levels dropped to below 15 per cent in the latter part of 2008 and 2009 when the global financial crisis hit its peak.
“With the economic recovery on course and corporations opening their doors again for talent, state-owned bank employees are looking out for jobs,” said CM Puri, director, Central Bank of India.