Top private banks see highest attrition at junior level in FY23

According to experts, fintech companies and some banks lure junior-level employees with various conveniences.

A number of private banks saw an average of 35-40 percent attrition at the junior employee level in the financial year 2022-23 (FY23), said bankers, and the annual reports of the top four banks analysed by Moneycontrol showed. The attrition rate at the junior level was the highest among other employee levels in the bank.

The country’s largest private sector bank, HDFC Bank, saw around 40-50 percent attrition at entry-level jobs.

"On average, we saw the attrition rate at around 30 percent. But the highest attrition was seen at the entry-level positions, which stood at around 40 percent to 50 percent," Srinivasan Vaidyanathan, Chief Financial Officer (CFO) of HDFC Bank, said at a post-results media call.

Amitabh Chaudhry, Managing Director (MD) and CEO of Axis Bank, said that the bank saw maximum attrition at the junior level.

Also read: Axis Bank sees 34.8% attrition rate in FY23, higher than FY22 and FY21

"Axis Bank has seen maximum attrition at around 33-35 percent at the junior and branch levels," said Chaudhry at a post-results media call.

The annual report of Kotak Mahindra Bank for FY23 showed a massive 58 percent attrition rate among employees at the junior level, the highest among the top private banks.

For IndusInd Bank, attrition at the junior level stood at 30 percent.

What is the overall attrition?

An analysis by Moneycontrol showed that the overall attrition among the top private banks stood at the highest level in the last three years.

HDFC Bank’s attrition for FY23 stood at 34.1 percent compared to 27.6 percent in FY22 and 15.4 percent in FY21.

Also read: HDFC Bank sees employee attrition of around 30% in fiscal year 2023, says CFO

Axis Bank’s overall attrition for FY23 stood at 34.8 percent compared to 31.6 percent in FY22 and 19.1 percent in FY21.

For Kotak Mahindra Bank, the overall attrition in FY23 was 45.9 percent, up from 39 percent in FY22 and 28.8 percent in FY21.

Overall attrition in top private banks

Whereas the attrition rate for IndusInd Bank in FY23 stood at a whopping 51 percent compared to 37 percent in FY22 and 21 percent in FY21.

What do the banks say?

HDFC’s Vaidyanathan highlighted that, to counter high attrition at all levels, the bank is planning to introduce more training programmes.

"We are working on more training programmes for the employees. It is a work in progress," Vaidyanathan said.

Chaudhry of Axis Bank, in a post-results media call in July 2023, highlighted that attrition is an industry-wide issue and Axis is making efforts to work on the same.

"Attrition is an industry-wide issue. We are constantly working to make more efforts to work on reducing attrition, but it is the reality of the industry," said Chaudhry.

Shanti Ekambaram, Whole-Time Director, Kotak Mahindra Bank, said that attrition at the senior and middle levels is low compared to the junior level.

"At the senior management level, attrition is less than 10 percent. At the middle management level, it's less than 20 percent. It's only in junior management that it's at about 50 percent. This is largely in sales, service, and call centres," Ekambaram said in a post-earnings conference call on July 22.

According to experts, fintech companies and some banks lure junior-level employees with various conveniences.

"Employees at the junior level look at the conveniences like proximity to their home, quality of work, etc. at private banks. If they find better options someplace else, they switch," said Chandan Sinha, former executive director, of the Reserve Bank of India (RBI).

A former banker, who did not wish to be named, said that banks have partnerships in place with some business schools wherein they hire junior-level employees. However, these employees are paid salaries that are below market level, and that are not commensurate with the high fees they have paid to the business school.

"At the junior level, they do not get a good salary compared to the fee they pay for their higher education at top business schools. Also, some of them enter public sector banks since they already have exposure to banking operations, and the PSU banks offer them a more secure life," said the former banker.