SBI Deputy MD Prashant Kumar says the bank will focus on special skills for jobs, but succession planning, missing middle are big challenges.
India’s biggest lender State Bank of India (SBI) is faced with three immediate challenges of filling qualified mid-level positions, succession planning and constant skill upgradation required with changing technology and risks in the banking sector, says SBI’s Deputy Managing Director Prashant Kumar.In a freewheeling conversation with Moneycontrol News, Prashant Kumar — in charge of the bank's HR or the Corporate Development Officer — said there is an immediate need conduct lateral hiring for specialised skills such as credit, risk, IT or information technology. The bank is also seeking government help to allow more performance-based incentives to employees.
Kumar said that post SBI’s merger with its five associate banks and Bharatiya Mahila Bank from April 1, 2017, SBI is working on a number of initiatives including leadership programmes, training to improve efficiency with the use of technology, more lateral hiring of skilled people for specialized roles and 360-degree feedback for managerial positions to make SBI and overall public sector banks more competitive.
Kumar, who joined SBI as a Probationary Officer (PO) in 1983 and worked for 34 long years rising through the ranks at the bank, assuaged concerns about employee retrenchment due to technological advances the industry is incorporating.
Excerpts from the interview:
What is keeping you busy post nine months of SBI merger?
Basically, retirement in SBI is happening to the extent of almost 10,000-12,000 annually. And across banks, retirements would be very high for the next 3-4 years. There would be hiring for sure but to what extent, needs to be seen, because digitisation is helping us improve efficiency.
Post-merger, almost 1,200 branches have been rationalised, the number of administrative offices have also been reduced, new circles have been created and branch related restructuring is over. There will be further realignment of people and more people will be required for front-line staff like marketing and sales. We also gave 25 percent more promotions than last year.
What about hiring plans?
This year (2017-18) we have recruited 2,200 POs, 400 lateral recruitments and the rest about 400 would be contractual employees. Clerical staff requirement till March 2019 is still being worked out. We recruit laterally for specialised roles and have done recruitment for 300 roles in SME financing at Scale 2 and 3 levels.
Has technology changed recruitment?
With technology, I don’t see downsizing of people but lot of efficiency of managing high level of work with existing people. In last 10 years, more or less the recruitment has been same but our balance sheet has grown 3 times, number of transactions have increased. Also, earlier public sector banks looked at lot of transactional banking roles. Now, we would like to redeploy the workforce to do more sales and marketing roles. We don’t recruit separately though because we have our standard exams, but our initial training and induction programmes are more towards front-line roles.
We also have a leadership institute in Kolkata. The plan is to train our top management and top executives of other public sector banks and work in collaboration with institutes such as IIMs, ISB, XLRI and other foreign institutes as well, entirely on leadership.
What more needs to be done to make PSBs more competitive?
I think digital adoption is key. For SBI, the YONO app will help that and everything end-to-end will now be done on digital. The digitization of credit process must also be completely online, it would help reduce the turnaround time and bring in more accuracy and also help us handle the large volume of applications that we get. NBFCs are doing that and this will be critical for the PSBs.
For employees, they need to be fully updated on their products. Also, customer service and use of technology in handling customer grievance is critical.
What are top 3 challenges for a big bank like SBI?
First, is there is a mid-level crisis in not just SBI but all public sector banks. There was a ban on recruitment for 10 years and the middle level has a huge gap now, we do not have skilled people. I think the most important part is there is a requirement of lateral hiring in the mid-level positions, largely in the specialized areas like credit, risk, IT, etc.
Second, there needs to be a better succession planning and forward looking manpower requirement. We have to look at the problems, the bank may face in the next 20-30 years.
Third, is the constant upgradation of skills as per the requirement of the organisation.
Is the mid-level vacuum is a recent phenomenon? What is the challenge?
Vacuum is already there for the last 3-4 years, and this vacuum is in terms of quality and not quantity. Identification of certain roles and then hiring for the same is key. Also matching the talent with the size of experience and qualification with our salary levels is challenge and we are working on it.
Do you think salaries need to be increased?More than the salary increment, we need to increase incentives, performance linked incentives like ESOPs – employee stock option plans, etc. Proposals are pending with the government and we are looking at it. Even in the wage revision (effective from November 2017), we are looking at more performance linked wages. As of today, the government guidelines allow that only 1 percent of the total profits can be given as performance linked incentives, which is hardly anything, given the large headcount in public sector banks.The Great Diwali Discount!
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