Hiring At Private Banks Rose In FY19 Despite Tech Scare

Data compiled by BloombergQuint for the top five private sector banks—HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Yes Bank Ltd. and Kotak Mahindra Bank Ltd.— shows that the aggregate number of employees at the lenders rose by 9.3 percent in FY19 compared to growth of a little over 2 percent in the last two financial years.

Among the banks, the steepest jump in net additions to the employee base came from HDFC Bank, which hired 9,808 employees in FY19.

ICICI Bank, which saw a net reduction in employees in FY18, added 5,215 recruits in FY19. Kotak Mahindra Bank saw net additions rise from 2,704 in FY18 to 6,036 in FY19, while Yes Bank added 2,898 employees this year after recording a fall in the total number of employees last year.

Axis Bank was the only one of these lenders which saw a drop in the pace of hiring.

What Was Hiring Focused On?

According to the ‘Jobs and Salaries Primer: 2019 versus 2018’ report from TeamLease Services Ltd., cyber security, enterprise architecture, issue redressal, wealth management and risk modelling are the top areas for recruitment for banks.

Traditional roles like portfolio managers, financial managers, cost accountants, accounts executives, collection officers, data analysts, equity dealers and relationship managers also continue to see employment opportunities.

Amit Vadera, head of the financial services and PSU verticals at TeamLease Services, said there has been an upsurge in hiring from private banks in the last year. Vadera attributed this, in part, to the crisis faced by non-bank lenders, which has allowed banks to capture market share.

There are two distinct trends for fresh recruitment in private banks, Vadera said. The first is that new, back-office and technology-focused areas like cyber security and risk-modelling are gaining prominence and traction within the banking hierarchy. At the same time, banks are beefing up their legal and compliance teams given the spate of issues facing the sector, from insolvency proceedings, frauds, regulatory changes and compliance with regulations like know-your-customer rules.

The second trend for recruitment in banks is directly linked to their lending strategy. Given the renewed focus by private banks to provide loans to “new-to-credit” customers, especially in the small medium enterprise and retail lending segments, banks are also growing their pool of front-office staff, said Vadera.

Further as banks are reaching out to unbanked customers and businesses in semi-urban and rural India, the annual reports for the top five private banks note that new recruits with key specialisations are being sought more than in the past.

In its Annual Report 2018-19, HDFC Bank notes that the “one-size-fits-all approach is no longer relevant and customisation is the need of the hour,” which requires banks to leverage technology so that routine activities are automated and employees focus on providing specialised solutions.

Meanwhile, new technologies being employed by banks are opening new areas of hiring and for employees to work on.

“The broader trend we are seeing is that for a majority of financial services there is move towards a hybrid or a phy-digital model. Technology is being integrated across areas, therefore having a digital IQ is very important from a skills point-of-view,” said Vivek Belgavi, partner and fintech leader, PwC India. He added that employees are required to wear multiple hats, essentially meaning that there is greater flexibility and fungibility in roles and banks are focused on providing their employees with multiple-skills.

Belgavi gives the example of automation of routine banking tasks. You may employ artificial intelligence or machine learning but you need a sizeable workforce to work on the technology.

Branch Network Expands

The pace of branch expansion also picked up in FY19.

The top five private banks added more branches, around 802 in total, to the entire banking network compared to 607 new branches in FY18.

HDFC Bank added around 316 new branches in the past year, followed by Axis Bank with 347 new branches and Kotak Mahindra Bank with 112 new branches. ICICI Bank added seven new branches in the last year, while Yes Bank opened 20 new ones.

With urban markets saturated, new branches are being targeted at rural and semi-urban areas.

HDFC Bank now has 53 percent of its branches located in semi-urban and rural areas, whereas ICICI Bank has 50.1 percent and Axis Bank has nearly 48 percent of their respective branches in semi-urban and rural areas. For Yes Bank and Kotak Mahindra Bank, however, branches continue to be centered in urban and metropolitan areas.

While banks are adding branches, they are using these branches differently than before.

“Digital initiatives have played a key role in driving growth and efficiency in the retail business. These initiatives have improved the efficiency of branches. The bank is now able to serve more customers at its existing branches and has enabled employees to perform more -added activities,” said ICICI Bank in its annual report for FY19.