 "BFSI on hiring sprint, IT sector stumbles in headcount marathon in FY24")
The fast-expanding banking, financial services and insurance (BFSI) sector has emerged as the largest recruiter in Corporate India for the second consecutive year. In 2023-24 (FY24), listed BFSI companies, including public sector banks (PSBs), added nearly 200,000 employees. In contrast, the headcount in the information technology (IT) services sector declined by nearly 66,000.
In comparison, BFSI firms hired 172,000 on a net basis in FY23, while IT services companies had a net recruitment of 131,000 employees.
This analysis is based on BFSI and IT services companies in the S&P BSE 200 Index. The Business Standard sample includes 34 BFSI companies, 10 of which are listed PSBs, along with 12 IT services companies.
Including PSBs, the total employee base of the 34 BFSI companies in the sample increased to nearly 2 million in FY24 from 1.8 million the previous year. Meanwhile, the total headcount of IT services companies in the sample dropped to 1.73 million from 1.79 million at the end of FY23.
With this shift, BFSI companies in the BSE 200 now employ more people than IT services companies, reversing the trend seen in 2021-22 and FY23.
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Private sector lender HDFC Bank was the largest recruiter in FY24, adding 40,000 employees. Bajaj Finserv followed, increasing its workforce by 39,000, while Kotak Mahindra Bank expanded by 22,000 employees.
In contrast, Infosys saw the biggest decline in the IT sector, with its headcount falling by nearly 26,000 to 317,000 by the end of FY24. Wipro and TCS followed suit, reducing their workforce by 23,257 and 13,249 employees, respectively. Despite these reductions, TCS remains the largest corporate employer with nearly 600,000 employees, followed by Reliance Industries with 347,000 and Infosys with 317,000.
In the BFSI sector, State Bank of India (SBI) is the largest employer, with a workforce of 232,000, followed by HDFC Bank with 213,000 and Bajaj Finserv with 139,000 employees.
Hiring in the BFSI sector was exclusively driven by private sector banks, non-bank lenders, and insurance companies, while PSBs reported a decline in their workforce for the sixth consecutive year.
Private sector BFSI giants such as HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Bajaj Finance, Bajaj Finserv, Shriram Finance, and HDFC Life Insurance collectively added nearly 211,000 employees in FY24. Their total headcount grew by 20.1 per cent year-on-year, reaching nearly 1.26 million, up from 1.05 million in FY23.
This level of hiring was the highest for private BFSI firms in at least a decade. For instance, they added 183,000 employees to their rolls in FY23.
Analysts attribute this trend to the faster growth of the financial services industry in recent years.
“The banking and financial services industry is growing at 12-13 per cent annually, while IT services companies are seeing revenue growth in the low single digits. Moreover, IT companies were forced to cut employee costs to improve their operating margins,” says Chokkalingam G, founder of Equinomics Research.
He expects the BFSI sector to remain the top recruiter, driven by continued growth and diversification in the financial services space in India.
However, the numbers suggest that this growth is largely confined to the private sector. PSBs such as SBI, Punjab National Bank, Bank of Baroda, and Canara Bank continue to shrink their workforce on a net basis.
The combined employee strength of the 10 listed PSBs in the sample declined to 733,000 in FY24, down from 745,000 the previous year and an all-time high of 811,000 employees in 2017-18. This includes former employees of erstwhile PSBs like Corporation Bank, Oriental Bank of Commerce, and Syndicate Bank, which merged with larger peers in 2019 and 2020.
Over the past five years, the BFSI sector’s headcount has grown at a compound annual growth rate (CAGR) of 7.1 per cent, slightly lower than the 8 per cent CAGR in IT companies’ headcount during the period from 2018-19 to FY24.