Lateral hiring frustrates staff: Pratip Chaudhuri

State Bank of India Chairman Pratip Chaudhuri on Monday said that lateral hiring in banks had led to frustration among existing employees.

Speaking at the curtain-raiser of the Ficci Banking Conclave, Chaudhuri said, “A high degree of lateral recruitment brings disappointment and frustration to the existing cadre and they end up saying ‘what was our fault’.” Chaudhuri said lateral recruitment has to be done with a lot of care. In addition, he said, lateral recruitment done by some banks at general manager level, except in specialist positions such as economists or law, has not worked out well.

For SBI, Chaudhuri said, there is very little lateral recruitment, and attrition is at the end of career span (after 30-35 years).

Talking about banking in rural areas, he was of the view that employees are not ready to relocate to rural areas. “Mostly what happens is that if you say that an employee is posted at Mumbai, he/she is very happy. But the day you tell them that you have to relocate to Surat or Nashik, that is when attrition happens.”

As a solution to this issue and to boost financial inclusion, Chaudhuri suggested that banks change the way they compensate people. He explained that the compensation structure of any employee was biased in favour of metros.

“I think we need to have a reverse compensation.

There should be a compensation to work in rural, semi-urban areas. In the next wage revision with the Indian Banks’ Association, this would one of the things (that would be addressed),” he added.