Feb 24: A permanent job with a nationalised bank. Until a few months ago, being employed with a public sector bank was a matter of pride and drew the choicest wedding proposals. Unfortunately, that position is losing its lustre as it may no longer be a job for life.
After its associate banks are merged into the State Bank of India (SBI), about 200,000 jobs could be cut, said CH Venkatachalam, General Secretary, All India Bank Employees Association (AIBEA).
Human resource officials said that this is still a conservative number. With automation, the numbers could double. Voluntary retirement offers are expected to climb steeply not only in SBI associate banks but also in other public sector banks.
This is not a problem restricted to only SBI and associates. The number of senior executives being asked to take voluntary retirement in PSU banks has seen a 25 percent jump over the last two years.
“The competition between public sector and private sector banks has intensified in the last one to two years. PSU banks, which were shy of going digital, are getting into this game in a big way. Naturally, we would want more niche talent for such roles and they don"t come cheap,” said the general manager of a mid-size public sector bank.
Many skill sets of cash managers and those in branches have become redundant, making their positions vulnerable.
Aditya Narayan Mishra, CEO, CIEL HR Services, said that the opportunities for reskilling are also limited in banks. This means that a large portion of the clerical staff which were once the core strength of banks are no longer required.
“Rather than reskilling existing operations staff, banks are choosing to hire more younger job-ready talent,” he said. As per estimates, almost 500,000 clerical jobs will be replaced by automated processes.
Customers have also opted to keep branch visits to the bare minimum. Hence, branch banking, which had 60-65 percent of total bank staff, will soon have 15-20 percent fewer people in the next three years. Approximately, 100,000 jobs in branch banking will go missing in the next three to four years.
Banks setting up robots may not lead to jobs getting cut immediately, but over 12-24 months, recruiters said, cuts are bound to happen.
Mishra said that compared to earlier times, automation has led to private banks cutting down branch banking costs. This translates to job cuts across their branch networks.
As younger talent is becoming the need of the hour, many banks want older staff, who are often not tech-savvy, to leave. The younger staff also come cheaper, resulting in useful savings.
“Employees who have crossed 45 and are being asked to quit have fewer options since banks only want 23-25 year-olds,” said a senior HR head.
The situation is no better in other segments like insurance where regulatory whip on managing expenses has forced companies to trim down teams across roles. Positions in teams like investment and top management are now also being reviewed on a quarterly basis and those who are off targets are constantly put under watch.
The big foreign investment numbers are no longer coming in. Insurers have opted for cost-cutting through letting go of people and having smaller teams.
Company executives said that with even the debt market getting volatile, churn in investment teams in insurers and mutual funds has been high. This, they said, is expected to continue even this year.
Rather than having big investment teams, numbers are being gradually cut to 4-5 people to look into daily trading. Smaller insurers are the worst hit since the new norms on expenses of management mean that salary costs would have to be drastically reduced.
Further, with mergers of insurance companies also on the anvil, consequent job losses are certain, though they would come with a lag.
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