High employee turnover to persist in India's financial sector in FY24: TeamLease

A senior executive at TeamLease, one of India's leading staffing services providers, has predicted that the high staff churn in India's financial sector will continue into the next fiscal year, citing a persistent demand-supply mismatch.

HDFC Bank, India's largest private lender, witnessed a rise in its employee turnover rate to 34 per cent in the last fiscal year from 27.6 per cent the previous year. Similarly, Axis Bank experienced an increase to nearly 35 per cent from 31.6 per cent.

Kotak Mahindra Bank faced a surge in attrition to about 50 per cent, while its smaller peer, Yes Bank, followed closely at 43 per cent.

"The demand for salespeople (selling personal, home, agriculture, and other loans) is huge," said Kartik Narayan, Chief Executive for Staffing at TeamLease, during the Reuters Trading India forum. He highlighted that these employees are often underpaid and undertrained, making even a modest salary hike of 1,000 rupees ($12) per month sufficient to prompt job switches.

Narayan anticipates this trend to persist, emphasising that the employment landscape in the Banking, Financial Services, and Insurance (BFSI) sector is under "tremendous pressure," with frontline attrition rates remaining at 30 per cent-40 per cent.

Despite recent measures by the Reserve Bank of India to tighten norms for personal loans and credit cards, potentially impacting loan growth, Narayan believes that the central bank's actions will not significantly affect the sector's employment needs, at least in the immediate future.

"While the general staffing business is growing robustly, tech staffing is going through a different cycle," Narayan added. He noted that the hiring boom in technology during the pandemic has moderated, but expects a recovery in tech hiring within the next two quarters as the sector adjusts to evolving demands.

(With Reuters inputs.)