How to Benefit From the Banking Jobs Explosion

Jobs in India’s banking sector are set to grow over the next few years as the country allows new banks to set up shop, says Rajesh K. Dahiya, president of human resources at Axis Bank Ltd., India’s third largest private sector bank by assets after ICICI Bank Ltd. and HDFC Bank Ltd.

Around two dozen industrial houses have applied to India’s central bank for permission to start banking operations, and a decision on their application is expected in the coming weeks.

To begin with, the new banks are likely to poach employees from existing banks such as Axis, but Mr. Dahiya says that in the long term, they’ll need to train new staff. “The available pool of bankers in the country will increase,” Mr. Dahiya told The Wall Street Journal in a recent interview.

Edited excerpts:

The Wall Street Journal: India’s central bank will soon issue licenses to new banks. Does that pose a threat to your talent pool?

Rajesh K. Dahiya: I look at this new competition challenge in two ways: For the next 18 months, there will be waves of movement of people in and out, as these new banks look for good talent from the existing industry.

But not in the long term.

The making of a good large bank takes many years. I’m hoping that the new banks will create more bankers.

WSJ: The mid and top-level managers at existing private sector banks are young. Will they be inclined to leave for bigger roles at the new banks?

Mr. Dahiya: Young people will look for opportunities for faster growth, but that will be available at both places.

We are opening many more opportunities for our young people. In an existing organization, one has visibility of his career growth, and a record of achievements.

I’m not saying that people won’t leave, but people don’t move only for a higher offer. They give a lot of weight to the equity they have created in the existing company.

WSJ:  Are you trying to retain your top talent by offering greater pay and other monetary rewards?

Mr. Dahiya:  Reward-based hiring happens, but in the long term, you push yourself beyond your means and business plans.

Instead, companies will try to retain employees through their brand proposition, growth proposition and through their opportunity proposition.

Even the new banks will attract people with their business plans, their opportunities.

And that is what an existing bank like ours should be investing in. We are looking at employees’ whole career at Axis bank.

We have designed a talent management program. At the top level, we have identified 50 people who at any point of time are capable of taking up two or three roles at the bank. That gives them an opportunity to learn.

At mid-level management, we have a pool of 500 people, vice presidents and above. Every time there is an opportunity where we need someone to take on a larger role, someone from this pool is identified and mentored.

WSJ: Tell us about Axis Bank’s hiring process.

Mr. Dahiya: We hire people in the age group of 25 to 55 years, so it is a broad spectrum.

We hire a large number of people who have just completed their post-graduation and looking to start their career. There is a healthy number of mid-level hiring for large roles. Hiring top leaders [from outside] is rare.

The way you hire today is changing a lot.

It is not only enough to physically visit college campuses. Hiring through Facebook, Linkedin.com, and referral programs are becoming much stronger and reliable.

WSJ: What are your hiring plans for the fiscal year starting April 1?

Mr. Dahiya: I’m not seeing any decline in our need.

We have a strong need for staff for the retail bank. The makeup may change, given the bank’s expansion into rural markets.

The net additions may be about 4,000 to 5,000 people for the year.

WSJ: You mentioned a rural banking push. Will the bank be hiring more employees from small towns?

Mr. Dahiya: There is no point in taking urban people to rural India where both — in terms of our ability to take them there as well as their own readiness to work — are very limited.

We have to find resident professionals in smaller towns.

I don’t see much of a problem in hiring staff in Tier II-III cities [mid-sized cities] as there are enough educational institutions there. The challenge will come when we will start going really rural.

WSJ: How are you dealing with this problem?

Mr. Dahiya: Till now, we’ve focused largely on hiring post-graduate students.

Now, we are looking at partnering with undergraduate colleges in small towns, and hiring students who graduate from them. Graduate professionals is what we call them.

Of the 4,000 to 5,000 net additions in the next year, between 10% and 20% will be graduate professionals.

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