As talent war looms, banks offer fat pay hikes

The mantra for banks and financial institutions in India these days is employee retention, especially as new private and foreign banks hot up the market for human resource. Mahua Venkatesh reports.

The mantra for banks and financial institutions in India these days is employee retention, especially as new private and foreign banks hot up the market for human resource.

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HDFC, ICICI Bank, Standard Chartered, Citigroup and their ilk have offered salary hikes in the range of 30% to top performers, industry analysts and human resource executives say.

The average salary hike is around 15%, and as a senior executive at a multinational bank put it, the focus is on rewarding middle management.

Industry experts said more than half a million jobs could be created in the coming 12-18 months with the sector opening up to more players.

Banking was one of the sectors worst hit by the global financial crisis, with several firms resorting to downsizing to keep costs under control. Last year, average increments were barely 10% though sentiments had started to turn positive. In 2009, most financial firms and banks had offered no increments to their employees.

“General sentiments have been more buoyant than last year,” Deepak Verma, chairman, Sheffield Haworth, a financial services executive search major told Hindustan Times. “We estimate that average compensation increase has been between 13 and 15% this year, compared to 10% last year. The middle management appears to have been the biggest beneficiary.”