Thursday, June 26, 2008

Indian private banks lead 2007 hiring spree

by Jo Black

A recent ASSOCHAM Eco pulse (AEP) Study has revealed that Indian private sector banks are on a hiring spree with their average employee strength going up by as much as 40 per cent in the year 2007.

This is contrary to the minimal growth of 2.75 per cent in staff posted by public sector banks.

The ASSOCHAM Study on “Workforce Expansion in Banking Sector”, also revealed that in line with the massive hiring during the financial year 2007-08, the employee cost of private banks has also sharply risen by 50 per cent.

Accordingly, PSU banks witnessed meager rise of 2 per cent in their staff expenses.

Fall in the employee expense in the public sector is largely due to the workforce going down mainly because of employees retiring.

The AEP is based on the data collected from 16 public sector banks and eight private sector banks.

Fifty per cent staff growth in private banking sector in the year 2007, comes on top of the 32 per cent rise in 2006.

While IDBI Bank recorded the highest growth of 65 per cent in increasing its workforce, Axis Bank witnessed a growth of 52.30 per cent in the 2007.

Kotak Mahindra Bank too registered a sizeable rise of 51 per cent in fiscal 2007.

Others with noticeable growth in their workforce include HDFC Bank (44.35 per cent), ICICI Bank (31.27 per cent) and IndusInd Bank (10.49 per cent).

Axis banks topped the chart by registering a huge growth of 76 per cent in its employee cost in the fiscal 2008 as against 59 per cent in the corresponding period previous year.

Kotak Mahindra Bank ranked second by recording a growth of 74 per cent over and above 57 per cent in the previous financial year, followed by HDFC Bank (67.51 per cent against 59 per cent), ING Vysya Bank (33.07 per cent as compared to a low of 2 per cent) and ICICI Bank (28.59 per cent).

IDBI Bank registered a growth of 35.95 per cent in staff cost in the FY 2007-08 against a decline of 11 per cent the previous fiscal.

However, ICICI bank turned out to be an exception to record a drop of 28.59 per cent in its employee cost in FY 2008 as compared to a rise of 49 per cent previous year.

However, public sector banks exhibited moderate growth in its staff expenses.

In the financial year 2007-08, growth in employee cost has been quite low.

On an average, PSUs have recorded a rise of 1.89 per cent in the FY 2008 against 2.08 per cent in the previous fiscal.

Banks like State Bank of India, Dena Bank and Union Bank of India reported a decline of 1.85 per cent, 3.44 per cent and 3.25 per cent respectively in their employee expenses the fiscal 2007-08.

 

 

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