Management consulting firm BCG has found that, on an average, 12 per cent of the new recruits hired by public sector banks quit within the year.
This compares favourably with the corresponding figures of 22 per cent and 20 per cent for new and old private sector banks, respectively.
“Contrary to popular perception, public sector banks are not losing their fresh hires in large numbers.
“Clearly, there is an element of public sector culture and work environment that is working for the fresh hires to stay,” said BCG in its report on productivity in Indian banking.
PSBs may not be facing attrition today because relative compensation at junior levels in good.
However, the firm cautioned that as the new hires reach middle management levels, the threat of losing the best people will be very high due to compensation mismatches.
Retention strategy
The smaller new private sector banks, which suffer from attrition the most, are most alert about using all the levers for retention, said BCG.
The levers of retention being used by them are: special training programs, talent pool program, onboarding of new recruits, job rotation, preferred location posting, incentives, and fast-track promotion.
PSBs are focusing on special training programs, fast-track promotions and preferred location posting, apart from job rotations.
However, their emphasis on talent pool program and onboarding of new recruits as retention tolls is low. “Overall, retention of employees is the ultimate acid test. In a competitive market, it is only a matter of time before banks with disengaged work force lose staff to other banks or other industries,” cautioned BCG.
The firm, among others, recommended strategic work force planning; round the year recruitment engine backed by employer brand; ‘intrusive training’ as a new training and onboarding paradigm, and smarter work environment.