If there is one sector that is certainly brimming with action in expanding the talent force in India, it is the banking sector. Some of the top private banks who have been pulling up their headcount through much of 2022-23, maintained or stepped up their hiring activity through the last quarter ended March 31, 2023, to square up a solid show.
Although not all private banks disclose their employee count on a quarterly basis, we sifted through the data shared by some of the top banks to draw broader trends. The most notable point is that HDFC Bank, the largest private lender, added over 6,000 employees to its rolls in the first three months of 2023 alone. Although this was not as aggressive as the bank’s hiring activity in the first half of 2022-23 (April-September), it allowed the lender to up its game by adding a record of more than 31,600 people in the whole of the last financial year. This translates into a 22.3% increase in total headcount during the year, a tad higher than a nearly 18% rise in 2021-22, when the bank had added around 21,500 people to its rolls.
In other words, HDFC Bank accelerated the pace of hiring last financial year as it geared up for a broader revival in economic activity in the country, partly powered by bank lending.
HDFC Bank is not an outlier–although it’s the leader—in adding to its headcount.
Take Axis Bank for instance. The lender added over 4,000 people to its headcount last quarter, the fastest pace in the recent past. This helped the bank not just turn around the decline in its total employee count of the previous quarter but also accounted for two-thirds of the net addition in the workforce in all of 2022-23. Indeed, this was propelled by additional people who came under its fold as the bank completed the previously announced deal to onboard Citibank’s consumer banking business.
YES Bank is another example. The private sector lender also stepped up hiring. The bank was hit by a corporate governance scandal involving its co-founder and former boss Rana Kapoor. It saw the induction of rescue capital from SBI with a significant equity stake. More recently, it got funding from private equity firms Carlyle and Advent.
YES Bank had added a little over 1,000 people to its rolls in the first half of last year. It went on to more than double that number in the six months ended March 31, 2023.
While some banks did not share statistics about their employee count, taking their employee cost as a proxy for the hiring activity shows that ICICI Bank may have added around 5% to its employee count. Its sequential employee cost, which had risen 1.1% during the quarter ended December 31, 2022, over September 30, shot up nearly 5% in the following quarter. This number excludes the impact of a one-time expense of Rs 335 crore for retirement benefit obligations last quarter.
Kotak Mahindra Bank, in contrast, saw its employee expense decline marginally from Rs 1,478 crore to Rs 1,455 crore. However, this was partly due to changes in pension annuity rates. Excluding the associated impact worth Rs 87 crore, the total cost was marginally higher. IndusInd’s employee expense rose 4.6% on a sequential basis last quarter.
Among the mid-size private banks, IDFC First saw employee costs at both standalone and consolidated levels rising nearly 10% sequentially. AU Small Finance Bank, which had hit an employee strength of nearly 30,000 people by June 30, 2022, only to see the headcount skid for the next two quarters, has clawed back some of the losses by adding nearly 500 people last quarter. This took it above the previous year’s level. This placed it just marginally ahead of the FY22 headcount after seeing through three consecutive years of adding around 5,000 people each fiscal. Nevertheless, the last quarter’s activity shows the worst may be over.
All these syncs with what the Naukri Jobspeak Index March 2023 showed recently. The index had pointed at a sharp rise in job creation in the BFSI sector with banking taking the lead. It signalled how BFSI sector created the maximum number of jobs in the month of March, with non-metros witnessing a major spike in job creation.
The Naukri Jobspeak index reached an all-time high of 4555 for the sector, a 45% rise in year-on-year growth for the sector that clocked a level of 3138 in March 2022.
All these syncs with what the Naukri Jobspeak Index March 2023 showed recently. The index had pointed at a sharp rise in job creation in the BFSI sector with banking taking the lead. It signalled how BFSI sector created the maximum number of jobs in the month of March, with non-metros witnessing a major spike in job creation.
It noted that the banking sector witnessed a jump fuelled by the expansion of digital banking services in the rapidly evolving global economy.
Notably, the BFSI sector has brought the silver lining in the job market even as the IT sector plays the wait-and-watch game. Other non-tech sectors are also positive about adding to their headcount.
If the public pronouncements of the top banks are anything to go by, the tide is unlikely to ebb in the near term.
For instance, HDFC Bank hinted at a similar pace of expansion in the current year. Srinivasan Vaidyanathan – Chief Financial Officer, HDFC Bank, said in an investor concall after the fourth quarter results: “At this moment, we expect to continue the speed at which, not necessarily every quarter evenly, but the speed at which we have done over the last 15 months to 18 months, we will continue.”
He was referring to HDFC Bank adding over 2,000 branches in the last one and a half years. If the bank continues to add branches annually to a similar extent it would need to hire people to support such a physical branch expansion and would continue to be a hiring powerhouse in the short term.
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Endnote
The private banking sector at large has shown a strong propensity to add to their headcount last quarter in particular, though some have been hiring through the last financial year. With the spectre of inflation taking a breather and an understanding creeping into the market that the spike in the interest rate cycle, fuelled by the need to control inflation, could be tapering off, there is a wider optimism about the growth in the banking sector.
This would add some spice to the job market too as the private banks go about hiring talent to manage the new branches. All in all, the banking sector, led by HDFC Bank, is poised for some strong human capital addition drive in the near term.
Source: Company Reports
