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In the days and years to come the Indian Banking Industry in the public sector domain will undergo a crisis situation in HR.
As pointed out in the recent report (2009) by the Committee on Financial Sector Assessment (CFSA) headed by Dr Rakesh Mohan, the former Deputy Governor, Reserve Bank of India, the structural composition of workforce in Indian public sector banks (PSBs) indicates that out of the 0.73 million employees in these banks 35 percent comprise of officers, within this roughly 7 per cent were in the middle and senior management cadre.
The Indian Banks face several HR challenges like:
• Seniority based Promotion
• Limited performance incentives
• Inadequate compensation policies and
• Age and experience profile.
The most serious issue that is affecting the Indian public sector banks is that of age and experience profile: The banks were sluggish in the recruitment process over a period of time. Majority of the recruitment was in the Sub-staff cadre. With limited direct recruitment in the Direct Officer cadre, the majority of the junior management posts were filled up by promotion from clerical cadre. During the period 1992-97, the growth rate of employment was less than 1 per cent. This has declined by an average of 3.2 per cent per year during next 5 years and further by 0.7 per cent per year in the subsequent 5 years ending March 2007. Therefore the adverse age profile already existing in Officer Cadre is likely to have got accentuated over this period.
The Committee points out that, the experience band of people across different management cadres has also become positively skewed (with value 0.96) with less than a quarter of the management cadre in the middle and senior management categories. The evidence indicates that 17.3 per cent of the present bank staff strength (as at end March 2007) are due for retirement over the next four years, with just over 7 per cent of them being in the officer cadre. Of the over 90,000 retiring employees over 2007-10, over 40 per cent belong to the officer cadre.
It also points out that “more alarmingly roughly 34 per cent of the officers in middle and senior management are retiring over the four years beginning 2008. As a result, there is likely to be a serious skill and experience gap in the PSBs without any concrete succession plan to fill the breach. Anecdotal evidence suggests that the quality of people retiring in PSBs far outweighs the present quality of intake. As the economy attains a higher growth trajectory and the banking system intermediates a large quantum of funds and becomes more knowledge-oriented than at present, the quality of human resources will become the cornerstone of increasing productivity and efficiency. The lack of a structured skill accumulation, enhancement and its applicability programme in PSBs in crucial areas such as marketing, treasury, product development and technology application could prove to be a major stumbling block to effectively compete in an increasingly competitive financial marketplace.”
Hence, in my opinion in the days and years to come the Indian Banking Industry in the public sector domain will undergo a crisis situation in HR.
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