Analyzing the Trend: Why Did BFSI Attrition Decrease in 2022?

2022 witnessed unprecedented job turnover as businesses adjusted to a new post-pandemic reality with evolving employee preferences. Corporates, tech firms particularly, were forced to grapple with a dramatic uptick in resignations even during early 2022– a result of the Great Resignation phenomenon that was in full force in 2021.

The Great Resignation had a global impact and caused a sharp spike in attrition rates in India, leading to decrease in employment numbers and an increase in job-hopping. 2021 saw an average attrition rate of 25%, followed by a slightly reduced 20.3% rate in 2022.

The banking and financial services industry (BFSI), however, was on reasonably good footing in 2022. Despite the spillover effect of the Great Resignation that left many companies struggling to retain key personnel, the BFSI sector reduced its attrition rate from 34.2% in 2021 to around 16-20% by the end of 2022, primarily by improving their recruitment strategy.

But, what did the industry do right to reduce attrition so significantly?

The Decoding Jobs 2023 survey on the BFSI sector identified certain key trends and practices, such as automation in hiring, that contributed to the decrease in attrition rate in this sector in 2022. Let’s look at that and some more factors to understand how the BFSI industry limited employee exits.

Using Automation to Hire Right

Banks and financial institutions increasingly turned to automation and technology to help them refine their hiring strategies and improve the quality of internal decision-making. Companies adopted modern HR technologies like digital recruitment platform to attract and retain top performers by automating several tasks to speed up the hiring process and enhance the interview experience- a key factor in attracting top talent.

BFSI companies integrated HR tech solutions to optimize and remove inefficiencies in several parts of the hiring process, such as filtering candidates, documentation, scheduling interviews, and following up. All this helped in fine tuning the hiring process and ensured that the right candidates did not slip away due to process delays and red-tapism.

Learning Opportunities

The BFSI sector in India has started focusing on providing its employees with more than just competitive pay packages They are willing to provide opportunities for learning and development. This will help create an environment that drives motivation and creates a unified team of individuals seeking personal growth through a collaborative learning atmosphere. Such an ecosystem can immensely benefit each employee’s professional development.

Focus on Company Culture

Employees want something more than a lucrative compensation. They seek an encouraging workplace culture. Companies must strive to create an environment that aligns with their employees’ values and ethics to attract and retain talented personnel.

Banks are now offering flexible work models, paid holidays, health plans, and parental leave as part of their benefits to make the working environment more satisfying. This provides a sense of security to the employees and helps them connect with the organization better. By creating a culture that considers the needs of employees, banks can ensure an engaged and productive workforce.

Companies are also investing in their employees’ well-being by providing wellness programs, attending offsite activities and team-building events, and conducting professional development workshops to foster a positive working environment.

Companies have implemented intelligent hiring strategies and provided employees with a positive work environment, enabling them to remain competitive and strive for growth.

In addition, the BFSI sector embraced new technologies and learning opportunities to foster an environment of innovation and development. Bridging the gender and inclusivity gap is also becoming increasingly important for the BFSI sector. With hybrid working arrangements, women are now being offered opportunities to hone their skills and take on roles in areas, such as data privacy, coding and process specialization at both mid-level and senior positions.

Changes in company culture have allowed BFSI companies to attract high-quality talent, bolstering their existing teams as they look towards sustained success in the years ahead.

Discover the latest trends and practices in the BFSI sector by downloading the Decoding Jobs India 2023 report today.