Opening Bells: Brokerages step up hiring to keep pace with stock market surge

2020 was forgettable for most sectors of India Inc as businesses took a severe hit due to the nationwide lockdown and allied restrictions. There were large scale layoffs and salary cuts as enterprises of all shapes and sizes looked at ways to cut costs at a time when income was at an all-time low level.

In this mayhem, however, there was one sector, for which the pandemic actually turned out to be a blessing in disguise. The stock broking industry saw huge additions in terms of new clients with the overall buoyancy in the secondary markets, especially in the second half of the year, pushing up business volumes.

The combination of these positives made the stock broking industry hire people at a time when reports about layoffs across sectors were rampant. Most of the leading broking entities added to their overall strength of employees in 2020, with some – unbelievably - even registering their biggest-ever annual recruitment.

“We added as many as 3,000 employees last year in our broking business, which would rank among the highest ever additions in any calendar year,” said Sudhir Dhar, Director & Head, Human Resources, Motilal Oswal Financial Services.

He added: “2020 was a fantastic year for brokerages as the industry saw a huge number of new client additions and with the upswing in the market, there was big business potential. We added as many as 50 branches last year and hired many people across profiles, but especially in sales, advisory and online business development roles.”

The buoyancy in the secondary markets cannot be disputed. In terms of returns, the year saw the benchmark Sensex closing at 47,751.33 while gaining 15.75%, which was the best annual return since 2017 when it had gained nearly 28%.

More importantly, the Sensex attained more than 86% when compared to the year’s low of 25,638.9, which the index had touched on March 24, 2020. This was the best-ever such return in over a decade since the benchmark barometer rose 117% in 2009 when it closed at 17,464.81 after touching a low of 8,047.17 during the year.

Said Sandeep Bhardwaj, CEO - Retail Broking, IIFL Securities: “The hiring process for the broking business is in full swing across areas of sales, marketing, technology, digital platform and innovation.”

“We had hired critical resources even during COVID. The broking industry is doing well and we intend to add relevant resources to aid our growth," he added.

Incidentally, the broking business of IIFL Securities’ registered an average daily turnover of ₹33,012 crore during the third quarter, which was 38% higher when compared to the second quarter. Further, the retail broking revenue was pegged at ₹73 crore for the quarter ended December 31, 2020 – an increase of 40% compared to the same quarter a year ago.

ICICI Securities, which is among the country’s largest brokerages in terms of active clients, used the pandemic year to beef up its staff strength to manage their record client additions. The brokerage added 1.39 lakh new clients in the third quarter, which was the highest-ever addition for the brokerage in any quarter till date. Plus, around 38,000 of the new additions were sourced through digital channels.

“We did not experience any loss of jobs during the pandemic. On the contrary, we used the opportunity to fill up some key positions as we had access to high quality talent during the period. So far, in the current financial year, we have on-boarded more than 700 people,” said an ICICI Securities spokesperson, while adding that going ahead, the company would continue to scale up resources in areas like digital, technology, analytics, cyber security and customer relationship management (CRM), among others.

The hiring by the broking industry assumes significance as it coincides with the rise in overall unemployment in the country during the Coronavirus pandemic that forced many businesses to shut shop.

According to the Centre for Monitoring Indian Economy (CMIE), India’s unemployment rate registered a sharp rise to touch 9.1% in December 2020, which was the highest since June when it was 10.99%.

It was also a steep rise from November’s unemployment rate of 6.5%.

The capital market is a huge source of employment with its thousands of broking entities along with exchanges, depositories, mutual funds, investment advisors and foreign portfolio investors (FPIs).

According to the Securities and Exchange Board of India (SEBI), there are nearly 4,700 registered brokers in the cash segment and nearly 10,000 registered FPIs that collectively employ millions of people across profiles including, research, sales, technology, advisory and portfolio management, among the many key roles.