Human Resource Knowledge

Manpower crisis

In this article we are discussing a real case on Human Resources crisis at a reputed bank in India which is popularly known as IDBI Bank. There was a time when every fresh graduate after qualifying with a professional degree and most of the experienced professionals look forward to join this bank as an employee. Times have changed now with foreign banks setting up their organizations in India. This is consequential to India embarking upon its Globalization program in all facets of business from banking to software. Skilled professionals have opportunities one better than the other. This is making them to switchover from one organization to another better paying one.

Let us first look at the facts what exactly happened at IDBI,

IDBI operated their commercial banking and institutional banking as separate organizations. The merger between the two has precipitated the manpower crisis as the pay and seniority problems were not addressed to the satisfaction of all concerned.

Employees continue to desert IDBI Bank even as it struggles in a schizophrenic existence as a development finance institution and a modern commercial bank; the result of a merger with its new generation private sector bank two years ago.

IDBI lost 810 employees in 2005, majority of whom were from the commercial banking side, that is, the erstwhile private bank. Head of alternative bank channels and card products had left for Deutsche Bank immediately after the merger. Head of human resources had also quit to join another Bank. Sometime back the regional head of corporate banking also left to join some other Bank. Even the head of corporate banking at the bank, is the latest to quit the bank. Sources at the bank say that he left after the differences with the top management.

Their high salaries have often been the matter of envy for IDBI bank staff. A top official at IDBI commented that IDBI Bank officials need to understand that they are a part of the public sector organization and accept the rules. He added that IDBI was already working on ways to retain and develop the human resources and reduce the attrition.

International consultant Hewitt Associates has been helping the bank with post merger integration, the most critical factor of amalgamation or acquisition. IDBI is also seeking the help of National Institute of Bank Management on human resources development.

We presume the following could be strong reasons for the HR crisis. However the bank has taken steps to address the problems through proper expertise and it may take some more time before situation is normal.

·IDBI has lost 810 employees in 2005, majority of whom were from the commercial banking side

·Uneven pay scales have created rift between staff of the commercial and institutional banking units.

·The cultural difference between IDBI and IDBI bank has also led to a huge attrition in the organization.

·Attrition is a problem faced by entire finance sector but at IDBI the rate is abnormally high.

·The bank has added around 936 people in 2005 and plans to add another 250 during the year. However salary is not the only issue for all of them

·Cultural differences and uneven pay scales have created a wide chasm between the staff of the commercial and institutional banking units. At the time of the mergers the employees of the IDBI Bank, who were paid market salaries, were promised that their remuneration would be protected for three years.

Labels: HRM

posted by Paresh @ 11:27 AM