Hiring of employees by banks is expected to go up in 2008-09
Owing to rapid branch expansion to meet the financial needs of the growing economy, private sector banks are on 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, an ASSOCHAM Eco pulse (AEP) Study has revealed.
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.
“Consistent rise in workforce of the private banks is a very positive development, in both respects of employment generation and branch expansion”, says study.
However, the trend may change in the current fiscal, since most of the banks in the public sector are expanding their branch net work. According to the Reserve Bank data, State Bank of India and its Associates have increased their branches by more than 500 over a period of five years and collectively branches of all the public sector banks have gone up by 3571 from the year 2003 to 2007.
Thus, in tune with the branch expansion plans, requirement of new staff in all categories is likely to go up in the years ahead and hence the employee cost of the PSUs may also increase proportionately. Also, hiring of employees by public sector banks is expected to go up in 2008-09 due to increase in business opportunities in retail banking, marketing and expansion in rural banking.
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