 "High staff churn in India's financial sector to persist in FY24: TeamLease")
Soaring attrition in India's financial sector will persist through next fiscal year due to a demand-supply mismatch, a senior executive at TeamLease, one of India's largest staffing services providers, said on Tuesday.
HDFC Bank, India's largest private lender, saw its employee turnover rate rise to 34% in the last fiscal year from 27.6% a year earlier. At Axis Bank, it climbed to nearly 35% from 31.6%.
Meanwhile, Kotak Mahindra Bank's attrition surged to about 50%, with smaller peer Yes Bank in tow at 43%.
"The demand for salespeople (selling personal, home, agriculture and other loans) is huge," Kartik Narayan, the chief executive for staffing at TeamLease, told the Reuters Trading India forum.
These employees are underpaid and undertrained and a salary hike of even 1,000 rupees ($12) per month is enough to make them switch jobs, he added.
Narayan expects this trend to continue, adding that employment in the BFSI (banking, financial services and insurance) sector is under "tremendous pressure", with frontline attrition rates persisting at 30%-40%.
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Further, the central bank's measures to rein in unsecured lending will not impact the sector's employment needs, he said.
Earlier this month, the Reserve Bank of India tightened norms for personal loans and credit cards, raising concerns about a potential slowdown in loan growth.
"I feel that (in the) immediate (future), perhaps there won't be an effect," Narayan said.
While the general staffing business is growing robustly, tech staffing is going through a different cycle, he added.
The hiring boom during the pandemic due to a sharp rise in demand for digital products has now moderated.
"Some of this (tech hiring) is also cyclical and we do expect it to start recovering in another two quarters," Narayan said.
(Reporting by Savio Shetty; Editing by Sohini Goswami)