Talent deficit
S.C. Dhall

Public sector banks (PSBs) have now face a peculiar manpower problem and that too at the senior level. With one in every eight PSB official set to retire over the next three years, the banks will soon be hard pressed to fill the vacancies in their senior management level. The 27 PSBs had a combined workforce of 7.25 lakh employees at the end of March 2007, with 2.5 lakh employees belonging to the officer cadre and 4.75 lakh comprising clerks and sub staff.

Of these, 75,000 employees are to retire by March 2010, 44 per cent being officers and over 30 per cent clerks and the sub staff.

While 13 per cent of the 2.5 lakh officers currently employed would retire over the next three years, only 9 per cent of the 4.75 lakh clerks and sub staff would reach the end of their service by then.

It has been estimated by one of the chairman-cum-managing directors of a PSB that banks are losing 1000 officers every year to their private counterparts.

The PSBs have always been known for their vast pool of talented human capital and, therefore, it's little wonder that there has been a regular shift of ambitious public bankers to private banks. Recently, the story of movement of senior executives saw a new trend. A movement has started at the managerial level within the PSBs —one PSB is signing up senior officers from another one.

State-owned banks are handicapped by their inability to pay market-competitive salaries to talented people. But banks have now started attracting more specialised officers by offering them competitive salaries and are at the same time reducing the headcount of clerks.

In the technology-enabled business environment, mass banking has become viable now and clerks will increasingly find themselves redundant.

In one recent survey, it has been mentioned that 40 per cent of the banking staff now fully conversant with the technology of banking should be given VRS and if new people are not appointed in their place, it would be difficult for the state-owned banks to compete with foreign and private sector banks in the coming years.

New business needs and staff shortage due to retirements have sent public sector banks on a hiring spree, with the SBI planning to induct 10,000 employees in the current financial year and that too in special cadres — chartered accountants. law officers, marketing and recovery officer, technology officers and probationary officers, specially for agriculture and SMEs projects.

For chartered accountants, banks have decided to pay Rs 50,000 a month and it will be raised to Rs 9 lakh a month during the probation period and beyond. In case of the legal officer, there will be a yearly salary of Rs 3.5 lakh. Both the categories will get bonus at the rate of 20 per cent per annum.

Besides, other public sector banks — Union Bank of India, Bank of Baroda, Andhra Bank and Bank of India — are also planning to recruit 5000 prsons during the current financial year.

Most local banks are losing people to new-generation banks such as the ICICI, HDFC, UTI bank, among others.

Banks are also going in for campus recruitments in a big way.

Even Standard Chartered bank, to meet the rising demand of professionals in corporate banking, plans to introduce a special training programme in the subject for graduates. The bank plans to double its workforce by adding 1,000 employees at various levels in the next three years. And at the junior management level, it plans to pick up graduates from one of the research institutes. The students will be placed in the bank at an annual salary of Rs 4.5 lakh. The programme is to start from May, 2008.

The Union Bank of India is undertsood to have set a high-powered advisory committee to guide its HR department and facilitate knowledge management. The bank has also involved two eminent academics for infusing fresh ideas in manpower management. This is being done as in 2009 the bank is likely to face a vacuum at the top with 10 of its dozen general mangers slated to retire.

That is why it is trying desperately to handpick and groom the next line of employees to fit into the general managers' slot.

The bank has also tweaked its promotion policy to enable better performers to become general managers at the age of 40.

During 2008, over 10 chairman-cum-managing directors of public sector banks will retire and the respective finance ministers are planning to hold interviews for these positions in February, 2008.

Experts in the field feel that the single biggest hurdle is that all hiring efforts have hitherto been focused on urban India and equate English education with talent.

Once we break form this model of urban dependent sourcing of talented manpower, there won't be any crunch, feels Hardarshan Singh, a retired general manager of one of public sector bank and a financial expert.

He points out that 80 per cent of the bank customers engage with staff in their local language. So, where is the need to be fixated on English?

Once we remove this filter, the gates will be wide open to talented people from less English-centric backgrounds.

The State Bank of India's recruitment policy had been appreciated by the industry. A number of banks are taking a cue from the SBI's process of management-level appointments. It not only has the maximum number of training institute which are providing training to not only its own officers/employees but those from other banks too.

The best way to attract talent is from the specialist pool. Current-day banking operations call for specialised knowledge in marketing, finance, and accountancy and front office management.

Banks are increasingly looking towards specialists to man different positions, right from the bottom of the pyramid.

Banks are now being proactive about cutting down attrition rates Most are counting on innovative HR schemes to plug the skill gap.