Axis Bank, Kotak Mahindra Bank see lower attrition in FY24

Industry experts said that high attrition in banks, especially in the junior level employees, is the reality and most of them shift majorly to fintech companies.

Though still inordinately high, top private sector lenders Axis Bank and Kotak Mahindra Bank saw a drop-off in the number of employees leaving in 2023-24, an analysis of the banks' annual reports showed. Data from Axis Bank’s annual report showed that the bank reported a total attrition rate of 28.8 percent in FY24 compared to 34.8 percent in FY23. Kotak Mahindra Bank saw an attrition rate of 39.6 percent in FY24 versus 45.9 percent in FY23.

Overall, the banks continued to record their highest attrition rate at the junior level but on a year-on-year basis, they reported a fall in the number. For Axis Bank, employees in the 21-30 age group constituted the largest segment of those quitting, with a 25 percent attrition rate. However, this was lower than the 35 percent recorded last year. Kotak Mahindra Bank saw an attrition rate of 43 percent among its junior level employees, an improvement over last year's 58 percent.

“Higher attrition was observed primarily in field sales personnel and contact centers,” Kotak Mahindra Bank said in its annual report.

The top private banks saw an average attrition rate of 35-40 percent in the last financial year. In a bid to retail talent, many plan to introduce training and other benefit programmes.

For instance, Kotak Mahindra Bank said that it has launched a raft of measures to provide growth opportunities to its employees. “In an effort to improve the Bank’s attrition rate and enhance engagement, multiple initiatives have been introduced and strengthened throughout the year to address three major areas: Career Growth, Salaries and Benefits, and Manager/Management Style,” the bank said in its annual report.

Industry experts said that high employee turnover in banks, especially at the junior level, is the reality with most leaving for fintech companies.

Though the attrition rate has eased, industry experts said it would be difficult to maintain it at these levels. The human resources head of a bank, who did not wish to be named, highlighted that the industry has been evolving from the jobs perspective. “Largely, employees look for a change in their role every one year or so and we have seen that sustaining employees at the junior level is tough as they move to different opportunities,” the HR head said.

In November 2023, Reserve Bank of India (RBI) governor Shaktikanta Das expressed concerns over high attrition rates in certain private sector banks and emphasised the need for dedicated core teams to tackle this issue. Speaking at the annual BFSI Insight Summit of CNBC TV-18, Das highlighted changing career perspectives among the younger generation.