Gobal information technology consulting firm Gartner has suggested that Bank of Baroda (BoB) prune its workforce by 15,000 through a fresh voluntary retirement scheme. In percentage terms, this works out to 37 per cent of the staff.
Infotech consultancy major Gartner has suggested that Bank of Baroda (BoB) slash its workforce by 15,000 through a fresh voluntary retirement scheme (VRS). In percentage terms, this works out to 37 per cent of the bank's payroll strength of 40,000.
Gartner was hired by the bank in this financial year to chalk out a business-driven infotech strategy, which could be implemented through a combination of business process re-engineering, implementing core banking systems, web-enabling and a series of VRS.
P S Shenoy, chairman and managing director, BoB, said: "The thrust of the report was on rightsizing and Gartner has shown how productivity can go up. We have not taken any decision on the VRS. As of now, there is no plan to introduce the scheme."
BoB, which shed 7,054 employees through the first-ever VRS in the industry last year, will need to dramatically change the composition and structure of its workforce to meet the demands and changing nature of customer base and restructuring of its operations, Gartner said in its report.
The consulting firm said the transition of branch-based transaction processing to centralised data or transaction processing centres within India will be crucial to attain the targeted workforce and associated productivity improvement.
To buttress this point, it cited the example of the Australia-based Westpac Banking Corporation, which has outsourced its day-one processing activity, a component in the three-day cheque clearance, to Unisys Payment Services.
Unisys uses imaging technology to scan and electronically store Westpac cheque vouchers. The savings on account of this outsourcing activity for Westpac has been estimated at 30 per cent.
In the light of these developments, Gartner has recommended that the bank will need to assess opportunities to initiate BoB-specific VRS in key functions.
An examination of the bank's competitive profile shows that the average age of the senior management team is around 55 and their average service tenure was 30-odd years.
In sharp contrast, the global best practice is that the average age of the executive management team should be close to 50 and their average length of service with the institution must be 7 years. BoB will also need to build a management team capable of dealing with domestic and international issues/ trends.
Gartner said it anticipates that the domestic banking sector could shed up to 40 per cent of its workforce over the next five years. Those retrained will handle delivery of new products and services.
Furthermore the report suggests that for the success of the banking system it is critical that lateral entry be encouraged, foreign talent sourced and hiring made attractive.
