Mounting Pressure! Resignation Wave in Indian Banking Industry, Resignation Rate Exceeds 50% in Major Private Banks

With the credit boom and strong economic growth in India, the Indian banking industry is rapidly expanding. However, as more and more Indians seek loans, some bank managers are putting significant pressure on young employees, leading to a high turnover rate of Indian banking professionals.

According to media reports, although the turnover rate has slightly decreased in the latest data, the turnover rate of Indian financial professionals is nearly twice the global average, much higher than other countries such as the United States, Japan, and Germany. In particular, the turnover rate among junior bankers in India is particularly severe, with some large private banks having turnover rates exceeding 50%.

Persistently low wages for grassroots employees leading to widening wealth gap in India

The reasons for this phenomenon are complex and varied. Firstly, the growth rate of bank deposits in India has lagged behind the credit growth rate, leading to intensified competition between traditional banks, modern financial technology companies, and shadow banks (informal lenders). Companies are forced to compete for customer resources in an increasingly competitive market. Kamal Karanth, co-founder of Bangalore-based solutions company Xpheno, pointed out:

"Many investors are confident in the potential of the Indian market and expect banks to fully expand their business. However, this high-pressure work environment often puts the greatest pressure on young employees, exacerbating the conflicts between employees and institutions."

"The sales team is most affected. Frontline employees must actively promote company products, facing tough working conditions and customer dissatisfaction."

Secondly, the rapid economic growth in India allows some junior bank employees to increase their salaries by switching jobs.

Thirdly, due to limited training and promotion opportunities, they can only seek development through resignation.

Fourthly, while the salaries of senior bank positions in India have risen significantly, approaching the level of Singapore, the wages of grassroots employees have always been very low. This has led to a widening wealth gap in India, which some compare to the "Gilded Age" in the late 19th century United States.

Fifthly, junior employees generally believe that management has failed to provide new employees with the skills needed to adapt to the current financial system. In the past decade, hundreds of millions of Indians have opened bank accounts for the first time. At the same time, many banks have expanded their business into previously unimaginable areas, which was unthinkable for most of India's modern history, as the Indian financial market was very closed off before.

Sixthly, with the expansion of financial services, young employees are sometimes hired as wealth advisors but are actually assigned to other positions, making them feel undervalued. This situation is particularly evident among employees who did not graduate from elite schools, as they are often assigned to less desirable jobs, such as promoting bank products at gas stations or airports.

Seventhly, unlike in other countries, the primary language in the Indian business environment is usually English, which most Indians do not speak. This means that those who did not grow up in major cities are often at a disadvantage when communicating with the country's elite.

Furthermore, gender inequality issues are also evident in the financial industry. According to data from human resources consulting firm Aon, the promotion rate for female employees in the financial industry is much lower than that of male employees, with only 1 out of 13 female employees receiving a promotion, compared to 1 out of 8 male employees This phenomenon is in line with the global low female labor force participation rate in India, making the career advancement of women particularly difficult.

India's deep-rooted caste and family hierarchy system make it difficult for outsiders to enter this industry. Priya Agrawal, founder of the Antarang Foundation, pointed out that many talented individuals are unable to break through the "invisible glass ceiling" due to economic constraints.

The Reserve Bank of India and the banking industry are working to reduce employee turnover

High employee turnover not only affects customer experience and damages the reputation of Indian banks, but also increases recruitment and training costs. Additionally, as one of the youngest countries in the world, with the financial sector being India's largest employment sector, high attrition rates mean that companies may lose out on crucial young talent vital for driving India's economic growth. Last October, Reserve Bank of India Governor Shaktikanta Das stated that the central bank is closely monitoring this phenomenon and has set up a dedicated team to address the issue of employee turnover.

Despite facing numerous challenges, the Indian banking industry is also seeking improvements. Top banks are striving to reduce employee turnover rates, with data from Macquarie Group Ltd showing that Axis Bank's attrition rate has decreased from 34.8% to 28.8%. Kotak Bank and HDFC Bank have also reported similar declines, with the latter two banks even establishing dedicated teams to enhance employee retention and provide training for management personnel.

Furthermore, some banks like Kotak Bank and HDFC Bank have initiated internal career development programs, such as HDFC Bank's "Project Thrive," aimed at nurturing employees' internal career growth.

Agrawal emphasized: "Banks need to take concrete actions in terms of diversity, not just make commitments. It is recommended that companies provide mentors for low-income employees to prevent talent loss. Commitments to diversity in banks need to be fulfilled through tangible actions, otherwise we will create more inequality."