The private sector banking industry is facing a growing crisis in employee retention, particularly within entry-level and sales teams, according to recent data compiled by TeamLease Services. With turnover rates skyrocketing in roles such as loan and credit card sales, the situation has become a pressing concern, with attrition more than doubling by the end of December.
TeamLease, which manages over 80,000 frontline employees across sales and customer service for commercial banks and non-bank lenders, reported a staggering overall attrition rate of 103% among the workforce it oversees. This alarming statistic underscores the challenges of maintaining a stable, experienced workforce in crucial customer-facing roles. The agency’s data reveals that non-bank financial companies (NBFCs) have seen an annual attrition rate of 77%, while insurance companies have reported a 62% turnover rate.
“Retail-facing roles in personal loans, credit cards and other sales-related segments continue to face high attrition. This is seen largely at the entry-level and among junior staff,” said Krishnendu Chatterjee, Vice President and Business Head at TeamLease Services. “Junior staff are often moving jobs in search of a quick raise. Their starting salary is around ₹15,000 a month, and even a modest monthly increase of ₹1,000 is enough to entice them to switch roles,” he added.
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According to TeamLease, loan sales teams are grappling with monthly attrition rates between 9% and 13% throughout 2024. The Reserve Bank of India (RBI) has also expressed concern, closely monitoring the situation. RBI’s data reveals that, for the financial year ending March 2024, the average attrition rate in private sector banks stood at approximately 25%, with some institutions reporting even higher turnover rates over the past three years. Notably, small finance banks have been hit hardest, with frontline staff and junior management seeing attrition levels close to a staggering 40%.
During a recent meeting with private sector bank directors, RBI Deputy Governor Swaminathan J addressed the issue, acknowledging the strides made since previous discussions, but emphasising the need for further improvement.
“Attrition rates are not just numbers; they reflect deeper challenges in the banks’ employee engagement and retention strategies. Losing talented employees at the junior and frontline levels means losing experience, customer relationships, and operational continuity,” stated Swaminathan. “This can significantly impact customer service, leading to a less-than-satisfactory experience at the frontline counters.”
In response to the growing crisis, the RBI has urged banks to consider and implement measures that prioritise career development, mentorship programmes, competitive benefits, and the creation of a supportive workplace culture that makes employees feel truly valued. The long-term success of banks may depend on the industry’s ability to effectively address these issues and build a more loyal and engaged workforce.
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