India's Public Sector Banks
Dear Readers, recently there were reports that a large number of bank officers, recruited in 1970s & 80s, soon after banks' natonalisation, are going to retire in next few years and it is going to create a huge talent deficit in India's PSBs. Someone opined that it is scary.
However, in my view, it is not scary ; it looks like just some unnecessary hype. There is hardly any substance in this kind of reports. Bank officers retire all the time and are replaced by new ones. Only difference this time is that the number is likely to be higher than usual but then there would be proportional fresh hiring too, if not exactly equal due to the flawed notion of down sizing.
Number of retirees is higher because there was mass intake during 1970s due to rapid spread of branch networks after bank nationalisation initiated in 1969, and also the process of recruitment was made simple and somewhat democratic. Thanks to Late Prime Minister Indira Gandhi ji for that.
Also, we can not say that retirees are all so highly talented that people still working in banks and new recruits together would not be able to meet the so called talent deficit. As such, second generation is usually smarter than the last.. betters the outgoing one....
As I see it, talent deficit occurs when people working in key areas requiring specific skills (and some experience too) leave while they are still in active service........ as had happened in 1990s when new private banks were coming up........were spreading their branch networks.. ...and the existing PSBs were their natural targets for human resources...and in some cases.....even the book of instructions.....
New banks were essentially looking for working hands with basic knowledge of banking, its systems & processes. The idea was not to hunt for talent. New banks knew that while machines make things easy but also that the machines too need workers to operate.
In 2001, banks were enticing employees to quit by offering lucrative package. Thankfully, some people in SBI, the largest PSB, still had their heads in the right place, and they curtailed the scheme a bit, making it applicable to officers above the age of 55 years . I have often wondered as to why no one in PSBs thought (in 2001) that deploying computers would require more working hands and thus, rather than reducing numbers, they need to go for fresh recruitment of techies - in addition to skill enhancement of oldies.
The loss of workers (numbers - not talent necessarily) to VRS of 2001 pushed back the PSBs and gave a walkover to the new private banks - at least in urban centres - and the realisation dawned (in PSBs) only towards the end of the decade (2010) when growth rate started falling .. .. and thus, fresh rounds of mass recruitment are now in vogue.....and are being announced rather proudly.
An area that amuses me the most is that the idea behind VRS of 2001 was to reduce costs, and to improve business & profit per employee; but top honchos of PSBs have since realised that human resource is still the cheapest. Also, human resource can be bullied easily.
PSBs know now that the collective cost incurred in upkeep of human resources is far lower than the capital cost as well as the recurring cost involved in purchase, maintenance, replacement, novation, renovation, up-gradation, and even disposal of old computers, and such technological support systems etc, is far far more higher than the cost of maintaining their human resources.
However, the ones against use of technology in banks should see reason and should realise that PSBs have been laggards in this area. In the present day scenario, no one can imagine a bank without computers / technology. Actually, if one were to talk to some youngster today of the era of loose leaf ledgers and assorted kinds of registers etc., that were being used in PSBs right up to early 2000s, it would appear to the younger ones that this guy has arrived from somewhere like Jurassic Park.
One good outcome of these mass retirements would be that the young generation of today would have an opportunity of getting reasonably well paying employment in these PSBs.
Dear Readers, recently there were reports that a large number of bank officers, recruited in 1970s & 80s, soon after banks' natonalisation, are going to retire in next few years and it is going to create a huge talent deficit in India's PSBs. Someone opined that it is scary.
However, in my view, it is not scary ; it looks like just some unnecessary hype. There is hardly any substance in this kind of reports. Bank officers retire all the time and are replaced by new ones. Only difference this time is that the number is likely to be higher than usual but then there would be proportional fresh hiring too, if not exactly equal due to the flawed notion of down sizing.
Number of retirees is higher because there was mass intake during 1970s due to rapid spread of branch networks after bank nationalisation initiated in 1969, and also the process of recruitment was made simple and somewhat democratic. Thanks to Late Prime Minister Indira Gandhi ji for that.
Also, we can not say that retirees are all so highly talented that people still working in banks and new recruits together would not be able to meet the so called talent deficit. As such, second generation is usually smarter than the last.. betters the outgoing one....
As I see it, talent deficit occurs when people working in key areas requiring specific skills (and some experience too) leave while they are still in active service........ as had happened in 1990s when new private banks were coming up........were spreading their branch networks.. ...and the existing PSBs were their natural targets for human resources...and in some cases.....even the book of instructions.....
New banks were essentially looking for working hands with basic knowledge of banking, its systems & processes. The idea was not to hunt for talent. New banks knew that while machines make things easy but also that the machines too need workers to operate.
In 2001, banks were enticing employees to quit by offering lucrative package. Thankfully, some people in SBI, the largest PSB, still had their heads in the right place, and they curtailed the scheme a bit, making it applicable to officers above the age of 55 years . I have often wondered as to why no one in PSBs thought (in 2001) that deploying computers would require more working hands and thus, rather than reducing numbers, they need to go for fresh recruitment of techies - in addition to skill enhancement of oldies.
The loss of workers (numbers - not talent necessarily) to VRS of 2001 pushed back the PSBs and gave a walkover to the new private banks - at least in urban centres - and the realisation dawned (in PSBs) only towards the end of the decade (2010) when growth rate started falling .. .. and thus, fresh rounds of mass recruitment are now in vogue.....and are being announced rather proudly.
An area that amuses me the most is that the idea behind VRS of 2001 was to reduce costs, and to improve business & profit per employee; but top honchos of PSBs have since realised that human resource is still the cheapest. Also, human resource can be bullied easily.
PSBs know now that the collective cost incurred in upkeep of human resources is far lower than the capital cost as well as the recurring cost involved in purchase, maintenance, replacement, novation, renovation, up-gradation, and even disposal of old computers, and such technological support systems etc, is far far more higher than the cost of maintaining their human resources.
However, the ones against use of technology in banks should see reason and should realise that PSBs have been laggards in this area. In the present day scenario, no one can imagine a bank without computers / technology. Actually, if one were to talk to some youngster today of the era of loose leaf ledgers and assorted kinds of registers etc., that were being used in PSBs right up to early 2000s, it would appear to the younger ones that this guy has arrived from somewhere like Jurassic Park.
One good outcome of these mass retirements would be that the young generation of today would have an opportunity of getting reasonably well paying employment in these PSBs.
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