HDFC Bank raises headcount by 8k

Move necessitated by increased volumes and distribution

HDFC Bank, the country's second-largest private sector lender, has pushed the pedal on hiring after a gap of over a year. In the first three quarters of this financial year, the lender has hired 8,333 employees, which is about 11 per cent of its total workforce.

Paresh Sukthankar, HDFC Bank's deputy managing director, said the increase in the pace of hiring was needed as the volumes and the distribution had increased. "In the last year or so we have substantially increased the staff strength. Some of this was a catch-up from the previous year when we were virtually flat in terms of a staff increase and some of it is that even after we have done a catch-up with some of our businesses, some of our distribution increase requires it and volumes that have followed thereafter requiring incremental staffing," he said in a conference call with analysts.

The increase in branch additions hadn't kept pace with the increase in employee count. In the last three quarters of the financial year, the bank added only 267 branches compared with over 8,000 employees. However, Sukthankar explained that apart from deploying people in branches, the head count was also increased to beef up the distribution team and several other verticals, including the back-end. He added this pace of increase in hiring was an aberration and was not likely to continue in the coming quarters. "We don't believe that we will maintain it (hiring) at this pace. The spike that we saw was a bit of a catch-up but we may continue to see some increase in staffing. But we will remain in a mode where we are investing in distribution, reach and so staffing." Experts said the lender's focus on hiring was also a result of the bank upping its retail play.

Among private banks, the lender is believed to have a majority share in several retail businesses such as personal loans, gold loans, credit cards etc., analysts said.

At the end of the quarter ended December 2015, the size of the bank's domestic retail portfolio stood at Rs 2,74,912 crore compared with Rs 2,12,856 crore in the corresponding quarter a year ago.

Another reason the bank is increasing its workforce is probably in anticipation of the competition that is likely to arise with the coming of the niche banks by this year. "HDFC Bank has stated clearly that it is not looking at tying up with any of the payments banks where as we have seen some other big lenders like SBI etc. entering into a tie-up with these new banks. Therefore, the bank will have to increase its distribution reach, especially in the hinterland, as competition from these banks in the rural and semi-urban areas will be inevitable," said an analyst requesting anonymity.