HDFC Bank: With 34% Attrition Rate, CEO Calls For More 'Inclusive' Workplace

In the year ended March 31, India's largest private-sector lender, HDFC Bank Ltd., reported an attrition rate of 34.15% among its base of employees.

As many as 53,760 employees left the bank in 2022–23, including 42,457 men and 11,303 women, the bank said in its latest annual report. A significant chunk of the people who left the bank were from the non-supervisory staff levels, which includes sales officers.

During the last financial year, attrition rates among the senior, middle and junior management levels were 6.5%, 5.1% and 14.4% respectively. However, it was 39% in the non-supervisory staff level.

"One reason that can be attributed towards this increase is a post-COVID phenomenon, that may have prompted the younger workforce to recalibrate what they 'want from the lives'," Sashidhar Jagdishan, managing director and chief executive officer, said in his letter to the shareholders as part of the annual report. "This has led to increased attrition across all sectors."

Jagdishan acknowledged that the experience of working with HDFC Bank could be improved further on several counts, especially culture. "We are taking concrete steps towards building an INCLUSIVE organisation, which will go a long way in reining in attrition in the coming years," he said in his letter.

Jagdishan said the bank adopted a culture of "nurture, care and collaborate" among its managerial staff. However, he said, there "may be" instances of transgressions by some of the bank's employees.

"We have the resolve to nip this in the bud, both by way of training/counselling and appropriate action, to ensure that the same is not attempted by anyone else," Jagdishan said.

In June, the bank had suspended a senior manager of one of its offices in Kolkata after a video of him abusing his subordinates surfaced on social media. This had created a furore about the culture at HDFC Bank.

The culture at HDFC Bank also took centre stage when discussing the mega merger with parent Housing Development Finance Corp. About 4,000 of HDFC's employees joined the bank on July 1 when the merger was officially closed.

Speaking to the press on June 28 ahead of the merger closure, HDFC Chairperson Deepak Parekh had said the mortgage lender had fostered a culture where employees carefully listen to the customers' concerns and respond to them effectively. Parekh hoped that HDFC Bank would continue to maintain that culture as it started in the housing finance business for the first time since its creation.

"The bank upholds RESPECT for ALL as a fundamental tenet in the way we work with each other and our customers," Jagdishan said in his letter.

Speaking about the HDFC–HDFC Bank merger, Jagdishan said it could not have perhaps been timed better. "As India grows, home buying across the country will only accelerate and emerge as a key driver of India's GDP over the next decade, especially affordable housing."

The bigger balance sheet created by the merger will aid HDFC Bank in taking larger exposures in infrastructure projects, according to Jagdishan. "This means we can participate more meaningfully in India's growth story and contribute to nation building."

Keeping this in mind, the pace at which the bank intends to grow, it could create a new HDFC Bank every four years, he reiterated.

The HDFC–HDFC Bank merger has created India's second-largest bank and the world's fourth most-valued bank.

According to disclosures made in the annual report, Jagdishan took home a compensation of Rs 10.55 crore in 2022–23 in comparison to Rs 6.5 crore in the preceding fiscal. While his basic pay went up 12% year-on-year to Rs 2.8 crore, the allowances and perquisites component remained largely flat at Rs 3.31 crore.

Jagdishan received a performance bonus worth Rs 3.64 crore, while he did not receive any bonus in fiscal 2022. His remuneration was 150.21 times that of the median employee remuneration at HDFC Bank, according to the annual report.