CONTENTS
Chapter
1.
INTRODUCTION
1.1 AIM
1.2 BACKGROUND
1.3 INDIA’S
BANKING SCENE
1.6 EMERGENCE
OF PRIVATE SECTOR BANKS
1.7 NATURE
OF PROBLEM
1.8 JUSTIFICATION
1.9 ATTRITION
2.
RESEARCH
METHODOLOGY
2.1 AIM
2.2 OBJECTIVE OF STUDY
2.2 RESEARCH TECHNIQUES
2.5 RECRUITMENT METHODOLOGIES
2.6 INTERNAL RECRUITMENT
2.7 EXTERNAL RECRUITMENT
3.
CASE
STUDY AT YESBANK
3.1 INTRODUCTION
AND GROWTH IN BANKING SECTOR
3.2 YES
BANK: AN OVERVIEW
3.3 YES
BANK GROWTH
3.5 STRUCTURE
OF YES BANK
3.6 HUMAN RESOURCES DEPARTMENT AT YES BANK
3.7 NATURE
OF RECRUITMENT PROBLEM FACED AT YES BANK
3.8 RECRUITMENT
PROCESS IN YES BANK
3.12 JOB
DESCRIPTION
3.13
ANALYSIS OF METHODOLOGIES FOR
RECRUITMENT OF SALES OFFICERS
3.14 JOB CONSULTANTS
3.19 ONLINE APPLICATIONS
3.22 REFERRALS
3.25 CAMPUS PLACEMENTS
3.27 DIRECT ADVERTISEMENT
3.28 INTERNAL RECRUITMENT
3.29 CURRENT SCENARIO AND TREND AT DELHI/ NCR
REGION
3.30 ANALYSIS FROM INTERVIEWS
3.31 SURVEY OF EMPLOYEES
3.32 EFFECTIVENESS
3.32 OVERALL EFFECTIVE RECRUITMENT STRATEGY
3.39 RECRUITMENT PLAN
3.40 LIMITATION OF THE PRESENT STUDY
4.
RECOMMENDATIONS
& CONCLUSION
5.
ANNEXURES
PREFACE
Effective recruitment, selection
and retention are critical to organizational success. They enable companies to
have high performing employees who are satisfied with their jobs, thus
contributing positively to the organization.
On the contrary,
in-effective recruitment methodology, selection and retention would result in
mismatches which can have negative consequences for an organization. A misfit
who is not in tune with organization’s philosophies and goals can reduce
output, productivity, customer satisfaction, relationship and over all quality
of work. Training a wrong hire can also be expensive. Effective recruitment are
therefore not only the first step towards organizational excellence, but are
important cost control mechanisms as well.
The study researches the spectrum of recruitment methodologies
followed in private sector banks towards developing an unique model, propose
suggestion that would reduce costs, time to recruit, be effective and help
overall organizational (in particular private banks) interests.
1
INTRODUCTION
1.1
Aim. To analyze the present recruitment
methodology of Sales Officers in a private sector bank and propose
modifications and improvements.
1.2
Background. Recruitment is the process of identifying and attracting a
group of potential candidates from within and outside the organization for
employment. Once these candidates are identified, the process of selecting
appropriate employees for employment begins. This means collecting from various
sources, measuring and evaluating information about candidates’ qualification
for specified positions.
India’s
Banking Scene
1.3
India’s
banking sector is growing at a fast pace. India has become one of the most
preferred banking destinations in the world. The reasons are economy is growing
at a rate of 8.5%, Bank credit is growing at 30% per annum and there is an
ever-expanding middle class of between 250 and 300 million people (larger than
the population of the US) in need of financial services. All this enables
double-digit returns on most asset classes which is not so in a majority of other
countries worldwide. Foreign banks in India are also achieving a return on assets
and are keen in expanding their businesses.
1.4
Indian
markets provide growth opportunities, which are unlikely to be matched by the
mature banking markets around the world. Some of the high growth potential
areas to be looked at are the market for consumer finance of about 2%-3% of
GDP, compared with 25% in some European markets, the real estate market in
India is growing at 30% annually and is projected to touch $50 billion by 2008,
the retail credit is expected to cross Rs 5,70,000 crore by 2010 from the
current levels of Rs 2,00,000 crore and huge SME sector which contributes
significantly to India’s GDP.
Major
strengths of the Indian banking industry, which have helped mark its place on
the global banking arena, are our Regulatory Systems,
Economic Growth Rate, Technological Advancement, Risk Assessment Systems and
Credit Quality. Regulatory
systems, Technological systems and Risk management systems of Indian banks were rated better than
China and Russia and at par with Japan and Singapore. China and India are one
of the fastest growing economies in the world as evident from the graphs
below:-
Source: Morgan Stanley
Research
1.5 Banks are also increasingly getting
attracted towards cross selling mutual funds, insurance policies, offering
credit cards to suit different categories of customers, services such as wealth
management and equity trading. These are indeed proving to be more profitable
for banks than plain lending and borrowing. The following figure indicates such
opportunities.
Emergence
of Private Sector Banks
1.6 The banking industry is fast becoming a
buyers’ industry with the new-generation private sector banks giving a strong
competition to the public sector banks. Yes Bank is one such new age private
sector Bank, offering high quality, customer centric service catering to
"Emerging India". Yes bank is the only Greenfield license awarded by
the RBI in the last 13 years. Yes Bank has fructified into a "full
service" commercial Bank that has steadily built Corporate and
Institutional Banking, Financial Markets, Investment Banking, Corporate
Finance, Business and Transaction Banking, Retail and Private Banking business
lines across the country, and is well equipped to offer a range of products and
services to corporate and retail customers.
Nature of the Problem
1.7 The
banking sector in India is undergoing a huge demand supply mismatch of skilled
resources, especially in the sales function. Every private sector bank in the
country today employs sales personnel for customer acquisition and business development
in their respective retail unit cross-selling mutual funds, insurance
policies, credit cards to different categories of customers and services such
as wealth management and equity trading.
A robust sales force consists of Relationship Managers, Sales Managers and
Sales Officers, depending on the customer segment they focus on. On a broad base,
customer segmentation in most retail banks is as follows:-
(a) High Net-worth Individuals* - Relationship
Managers
(b) Mass Affluent Customers** - Sales Managers
(c) Mass Banking Customers*** - Sales
Officers
* Average
income ≥ 15 L pa
** Average income £ 15 L pa
*** Average
income < 5 L
pa
1.71 Every branch of the bank employs close to 25-40
Sales Officers for business development. These officers work towards building
the customer base of the branch by selling liabilities products (Current
Accounts/Savings Accounts/Fixed Deposits) and cross selling Investment products
(Mutual Funds/Bonds/Insurance). Typically, all Sales Officers are supervised by
the Sales Manager. The purpose of this project is to study the current
recruitment practice of a leading private sector bank and to recommend
improvements/ strategies in this process. Below is
a list of common issues private banks today find themselves facing, having
adopted an adhoc recruitment strategy:-
(a)
Hires are often panic hiring ‘short gun
approach’.
(b)
No co-ordination, sharing of business
information or best practices.
(c)
No economy of scale/cost reduction.
(d)
No formalized agreements regarding terms of
business.
(e)
Isolated relationships with individual
suppliers and line/ HR managers.
(f)
Misinterpretation of job specifications.
(g)
No separate project-based recruitment
strategies.
(h)
Little use of internal recruitment.
(i)
Insufficient sector knowledge from job
consultants.
(j)
No consistency in approach.
(k)
Very high quantity of CVs and not enough quality.
(l)
Lack of consistent screening methods.
(m)
Loss of good candidates through
unprofessional or unstructured recruitment processes.
Justification
1.8
Significant growth in the private banking
sector over the past 5 years is stretching the manpower resource in the banking
sector. Growth has led to a significant demand for people at the operational
levels, and many banks are facing severe sales force crunch. The trend of
attrition and poaching is also growing. Attrition is particularly rampant in
the sales force in private sector banks leading to turnover as high as 30%
yearly. Data from some private sector banks indicate that on an average bank
spend 33% of organizations HR budget on recruitment and 18% on selection. 38% of organizations HR produce no reports on
recruitment activity whatsoever and are therefore unaccountable for the time
and spend involved. Only 8% have any form of competitor benchmark process
measurements, which focuses on quantity (number of CVs) rather than quality
(shortlist, initial CV rating against the job specification, hire ratios to
CVs). According to the data, the cost of replacing staff can be
anything between 50% and 125% of that person’s annual salary. We are all aware,
employees in the new millennium do not stay with a company for life as perhaps
their grandparents did. Countering
attrition has become the challenge. Attrition, as such, is
not a bad phenomenon. It has been known to exist. However, when jobs were
scarce and competition was less steep, banks managed it. Today attrition costs
and hurts. Private sector banks have to re-think their strategy in terms of
recruitment, selection and retention. The costs of repeatedly hiring and
re-hiring can be staggering. Attrition and turnover of sales officers is
becoming a serious problem in today’s environment. Thus
there is a need for identifying possible improvement strategies in recruitment.
As the market changes, there is a need to develop a wider and effective
recruitment network for recruitment to meet needs. The obvious question
therefore is what is the optimum recruitment strategy?
Attrition
1.9 Eight
out of ten sales officers said they have been approached by another bank or
organization during the last year to change. Recruitment of sales officer is
impacted by high turn over of the sales force. There is an ocean of restless
young professionals with low tolerance and high skills, ready to leave one
organization and join another at the drop of a hat. They may be angry with
their bosses, frustrated at work, or simply not satisfied with their pay
packets. They feel that loyalty does not pay, that passion is no longer
rewarded. These feelings are not new. They have always been there, in every
organization since time immemorial. But now, thanks to the growing economy and
the shift from socialism to market liberalization, there are many options
available. It is easier to jump now than ever before. Human resources are the
new ‘product’ in the market and vast corporations both Indian and MNC are the
new ‘consumers’. Only the market is unique. Here both, the ‘consumer’ and the
‘product’ have the right to choose. Processes are created to manage the high
attrition rate of employees. But they make the workplace so impersonal that
they end up contributing to the attrition rate. In the international market,
Indians are seen as poor team players and terrible at following processes. Yet,
it is precisely our creativity that makes us valuable in the banking industry
that demands creativity. Private sector banks face about 30% attrition per annum.
2
RESEARCH METHODOLOGY
Aim
2.1 To analyze the
present recruitment methodology of Sales Officers in a private sector bank and
propose modifications and improvements.
Objective of the Study
2.2 To
analyze the present recruitment methodology of Sales Officers in a private
sector bank and propose modifications and improvements with following
objectives:-
(a)
To
review the existing process of recruiting Sales Officers.
(b)
To
measure the efficiency of the hiring process.
(c)
To
suggest changes in the recruitment process.
Research Techniques
2.3 In order to develop
a meaningful recruitment strategy for the future, it is imperative that one first
fully understands the current process. The most effective way to achieve this
is to undertake a full 'recruitment process audit', which should look at every
aspect of the recruitment cycle. The following research methodologies were used
to arrive at the 'best strategy’ for recruitment of employees for any private
sector bank in India:-
(a)
Through
structured questionnaire filled in by internal, external candidates and line/
HR managers.
(b)
Interviews.
(c)
Collection
of raw data.
(d)
Industry
practices.
(e)
Trend
and Reports.
(f)
Bank’s
records and documents.
2.4 Banks have to consider innovative approaches for recruitment
ensuring that every 'route to recruit' is fully utilized effectively in a time
bound manner at minimal cost. There are many options available to private
sector banks to achieve best results in the recruitment of new employees. However,
to define this we will need to gain a clear picture of the present recruitment process.
Having fully audited and documented the current recruitment cycle from
attraction to induction, one will finally be in a position to offer 'best
strategy’ for any private sector bank.
Recruitment Methodologies
2.5 Following
are the two main recruitment methodologies employed by banks presently:-
(a)
Internal Recruitment
(b)
External
Recruitment
2.6 Internal Recruitment. This involves filling vacancies through
internal means from existing employees. Following questions should always be
asked. Is there an internal candidate who could take up the role? What are the
strengths, limitations and training required? Initial consideration should be
given to a bank’s employees, especially for filling vacancies above the entry
level. If external efforts are undertaken without considering the desires,
capabilities and potential of present employees, a bank may incur both short
and long run costs. In short run, morale may de-generate, in the long run banks
with a reputation for consistent neglect of in-house talent may find it
difficult to attract new candidates available through other channels.
2.7 External Recruitment. To meet demands and vacancies from
external sources for talent brought about by growth, desire for fresh ideas or
to replace employees who leave, banks periodically turn to the outside labor
market. The “Five” most popular external recruitment sources considered are:-
(a)
Job
consultants
(b)
Campus Placement.
(c)
Online
Application.
(d)
Recruitment
advertising.
(e)
Referrals
3
CASE STUDY OF PROBLEM AT YESBANK
Introduction and Growth in
Banking Sector
3.1 As brought out earlier, the India’s banking sector is growing at a fast pace. India
has become one of the most preferred banking destinations in the world. The
reasons are economy is growing at a rate of 8.5%, Bank credit is growing at 30%
per annum and there is an ever-expanding middle class of between 250 and 300
million people (larger than the population of the US) in need of financial
services. Banks are increasingly getting attracted towards
activities such as marketing mutual funds and insurance policies, offering
credit cards to suit different categories of customers and services such as
wealth management, insurance and equity trading. These are indeed proving to be
more profitable for banks than plain lending and borrowing. HR Managers in
private sector banks
need to think and act strategically in relation to the requirement of workforce
and ensure 'best
strategy’ for recruitment to meet goals at lowest costs.
Yes Bank: An Overview
3.2 Yes Bank, India’s new private sector
Bank, is the outcome of the professional commitment of top management team, to
establish a high quality, customer centric, service driven, private Indian Bank
catering to “Emerging India”. Yes Bank has adopted best international
practices, the highest standards of service quality and operational excellence,
and offers comprehensive banking and financial solutions to its customers. A
key strength and differentiating feature is its knowledge driven approach to
banking for its retail and wealth management clients. Yes Bank is built on a
foundation of trust, strengthened by knowledge, backed by technology, governed
by transparency and committed to responsible banking. The result is an
unstinted commitment. It is this commitment that has earned the Bank the
distinction of being ranked India’s No. 3 Bank in a recent survey of listed
banks in India by Business World. The same survey also ranked Yes bank first in
Safety, Efficiency & Growth. Yes bank won the Continuous Innovation in HR Strategy award at The Indiatimes
Mindscape Employer Branding Awards 2007, the RASBIC award for Innovative Recruitment & Staffing
Programme and the Global HR
Excellence Award for Innovative HR Practices at the Asia Pacific HRM
Congress 2007.
3.3 The
bank has been able to achieve this growth through four instruments. A focused
business strategy and entrepreneurial leadership, highly rated employees,
best-in-class processes and evolutionary technology. Yes Bank is pursuing a
Brand strategy to build one of the finest financial brands in India and to
provide an unprecedented delightful banking experience to all its customers. What
has worked well for Yes bank is that unlike the first lot of private banks that
came up in the mid-1990s, it did not get caught in a liquidity crunch that was
brought about by the high interest rate regime unleashed to contain
inflationary pressures in 1995. Yes Bank started its operations in 2004 with
branches in Mumbai, Delhi and Gurgaon (NCR).
3.4 Growth. The total net worth of the bank as on 30 Jun 07 stands at
INR 8231 million with about 60 branches in 35
locations across India within two years of operation. The bank made plans to be
about 100 branches by March 2008. The bank has
increased its headcount in North India region from around 500 people in Nov 06
to about 2000 people by Jun 2007. Each branch requires around 25-40 people to
be fully operational and run effectively.
Structure of Yes Bank
3.5
The bank has a matrix structure with
the Relationship Vertical on one axis and Product vertical on the other axis.
3.6 Human
Resources Department at Yes Bank. The bank is presently on an expansion
drive and the HR department is presently concentrating on recruiting to man
these branches. The organization has a tree structure with only three levels of
hierarchy in the HR department i.e. President, Vice President and Relationship
Managers. The organization is as follows:-
3.7 Nature of Recruitment Problem Faced at
Yes Bank (From Bank Records). Like any startup Bank, the HR department
faces the uphill task of recruiting the branch team and sales force for every
new branch. This could be close to about 25-40 officers per branch consisting
of Relationship Managers, Sales Officers headed by the Branch Managers and
Sales Managers. Further, there is a factor of about 30% attrition per annum,
which has to be made good to maintain sales force levels. The following data
substantiate attrition rates at Yes bank, Delhi.
Attrition at Yes Bank, Delhi - Tenure
wise Data from 360 Sales Officers
Recruitment Process in Yes bank
3.8 The sales force required for a branch to
function is Tellers, Customer Sales Managers, Customer Sales Executives, Sales
Manager and a Branch Manager. The line managers drive the recruitment process for existing branches, whereas the HR
drives the planned recruitment for the new and upcoming branches based on
defined norms. In case of an existing branch as the need against a position
arises, the line manager requests the HR department with the qualitative
requirement of the candidate. However, for an upcoming branch a planned
recruitment of the complete team as per defined norms and size of branch is
undertaken preferably on a top down approach. The HR department tries to follow
a pre-defined recruitment methodology to short list candidates and select
thereafter.
3.9 Selection
of right candidate is undertaken in a hierarchical process. The immediate Team
Leader along with HR takes the first round of interviews. The next round is undertaken
by either the Sales Manager or the Branch Manager as per the branch
requirements and norms. However, for senior managerial positions, there are a
series of interviews with HR, line managers, Head of the department and upto
the level of CEO. The top management is actively involved in selection and
compensation finalization. The salary fitment is made by HR keeping the fixed
cost of the employee and various other factors into consideration. Global sourcing is twice for senior managerial
positions than for middle management positions at Yes
Bank.
3.10 Any
candidate who has to be recruited is interviewed both by the line as well as
the HR. The line assesses the candidate on his current potential, skills and
knowledge. The HR on the other hand assesses the candidate on his attitude,
profile, dexterity, family background, educational parameters, compensation and
other YES parameters defined. The line managers look at the job fit whereas the
HR looks at the organization fit of the employee.
3.11 While
setting up a new branch the first step is to get the branch manager onboard.
The branch manager is either selected within the organization or hired by the
HR department and the Regional Head. Any new branch has to have a Teller, a
Customer Sales Executive/ Manager and a Branch Manager to be fully operational.
Training is the next most important process before a selected candidate begins
to carry out the assigned responsibilities in any branch. This is undertaken for
the Retail and Business Banking division of the bank. Often training is the
main purpose to assign the infant branch to a parent branch. The flow of the
recruitment process is as follows:-
RECRUITMENT FLOW IN
YES BANK
Job
Descriptions
3.12 They are lists of the general
tasks, functions and responsibilities of a position. Typically, they also
include to whom the position reports, specifications such as the qualifications/
experience needed by the person in the job, salary range for the position, etc.
Job descriptions are usually developed by conducting a job analysis, which includes examining
the tasks and sequences of tasks necessary to perform the job. The analysis
looks at the areas of knowledge and skills needed by the job. Bank keeps updating them and it is not a one-time description, but
a process which is kept up with ever-changing responsibilities and skills
necessary to perform the job, and the changing incentive plans.
3.13 Analysis
of Methodologies for Recruitment of Sales Officers. While
the recruitment methodology for sourcing both sales officers and senior
management positions have been discussed in the preceding paragraphs, the prime
focus the present study and report will be sales officers. The following
methods of recruitment being followed have been analyzed:-
(a)
External Recruitment
(ii)
Online applications
(iii)
Referrals
(iv)
Campus placements
(v)
Direct Advertisement
(b)
Internal Recruitment
3.14 Job
Consultants.
In this
process, the bank ties-up with an empanelled a list of job consultants. Whenever
a position arises, the bank requisitions their services and provides the
necessary job description, experience, place of work and compensation details.
The consultants then search their database and provide a list of potential
candidates after screening. The employer should insist that entry level
screening against the profile provided is undertaken by the consultants. The
advantages/ disadvantages of such methodology are as follows:-
ADVANTAGES:
(a)
Get candidates for specific skill set/ profile.
(b)
Resume are screened for specific profile.
(c)
Quick and effective way of matching employers and potential
candidates.
DISADVANTAGES:
(a)
Very expensive.
(b)
Not suitable for mass induction.
(c)
Dependent of credibility of consultants.
3.15 The
average cost for such services for sales officers in urban region is about Rs.
10000 and Rs. 7000 in rural region per sales officer. For mid level and high
level positions, the cost of services is about 8.5% of the yearly salary of the
employee. In case the employee resigns within three months, the bank insists,
the consultants provide replacement at no extra cost and insures for the
training costs. This method of recruitment is effective but expensive,
especially in case of senior level management and is not suitable in case of
mass recruitment. 45% of the positions at Yes bank at Delhi National Capital
Region (NCR) are presently being filled up through job consultants. However, due
to non-availability of suitable job consultants in rural areas, only 30% of the
positions at Yes bank outside Delhi were filled through job consultants.
3.16 During
the study, 25 line and HR managers that work with such job consultants were
asked for their opinion about the quality of the candidates provided by job
consultants, which resulted in an interesting finding. Majority of respondents
think that the quality of candidates provided is good (58%), 21% consider it to
be average and another 21% even think it is insufficient.
3.17 The author felt that the results concerning
quality of candidates are partly due to the way job consultants are being
engaged by certain companies as part of a “shot-gun approach", without
exclusivity and sometimes as a last resort after failing to fill the position.
3.18 Re-evaluating
Job Consultants. During
the case study, it was learnt that Yes bank has an empanelled list of 32
consultants and this is being continuously tracked & re-evaluated. The
evaluation process is built on Likert scale and has many parameters like
consultant credibility, quality of candidates, core competence, profile/
segment of operation, timeliness, flexibility, ability to source candidates for
difficult locations, network, ability to handle large scale recruitment etc.
This ensures that the consultants deliver consistent superior performance for
staying empanelled. Time savings, cost advantages, and better knowledge of the
market were given as the most important reasons for outsourcing the process to
recruitment agencies by HR department at Yes bank.
3.19 Online
Application. Banks
have online portal where they advertise all available positions and enables candidates
to post their resumes against vacancies. The bank also advertises such
positions on various job websites like naukri.com, google jobs, Monster.com
etc. The
advantages/ disadvantages of such methodology are as follows:-
ADVANTAGES:
(d)
Quick and easy way of matching employers and potential
candidates.
(e)
Inexpensive.
(f)
Wide publicity.
DISADVANTAGES:
(a) Lot of junk resume
for jobs irrelevant to their specialization. Therefore requires extensive
screening.
(b) Not all candidates
are accustomed to looking for jobs in this manner.
(c) Publicity limited to
internet users.
(d) Loss of human
interaction.
Industry statistics reveal
that 100 percent of the high tech companies in Global 500 list, and 89 percent
of Fortune 500 companies, use their corporate websites for recruitment. The
past year has shown major growth in e-recruitment advertisements, which cost 80
percent less than newspaper ads and is about 10 times cheaper than hiring
consultants. Online recruitment is of immense assistance in junior and
middle-level recruitment. Senior positions require a different strategy.
3.20 Online job advertising can however result in
candidates of very different capabilities seeking attention. Browser-based
pre-screening tools with qualifying questions derived from the job
specification can save many hours of unnecessary work for both the applicant
and hirer. Such technology, though at infancy stage presently can save hours of
screening effort.
3.21 Yes bank has an online portal on which they
advertise all openings and enables the viewers to post their resumes. Candidates
(internal and external) can apply for positions as per the positions and
locations advertised. This methodology of recruitment has been found to be cost
effective with vast coverage. However, line and HR managers feel many
irrelevant applications are being posted, which leads to waste of time in
screening/ interview and is at times discouraging. Based on available
statistics, 15% of the positions at Yes bank Delhi are presently being filled through
such online methodology. However, this is likely to grow substantially.
3.22 Referral. Companies/banks
runs an employee referral scheme, which encourages employees to recommend acquaintances/
friends as candidates for certain positions and also earn some incentives. Not
many companies realize the benefits of good referral programme. A successful
referral programme reduces cost per hire significantly and at the same time
promotes ownership. The advantages/ disadvantages of such methodology are as follows:-
ADVANTAGES:
(a)
Inexpensive compared to job consultants.
(b)
Referred candidates are aware of the culture.
(c)
Employees refer candidates with good potential.
(d)
Results are quick.
DISADVANTAGES:
(a) You may be obligated
to hire in certain cases when candidate is not suitable.
(b) May lead to inter-personal issues.
(c) May not always produce desired results.
(d) Not suitable for mass recruitment.
(e) Not sustainable in the long run.
(f) Issues arise when referred candidate is
selected and does not perform or quits.
3.23 Yes bank runs a successful employee referral
scheme, which encourages employees to recommend friends and earn incentives. “I
have happy employees, otherwise nobody would call their friends/ relatives"
says CEO, Yes Bank Ltd. Based on available statistics, 6% of the
positions at Yes bank Delhi are presently being filled through referrals.
3.24 The
employee is paid the referral fee after 3 months after the candidate joins. The
bank doesn’t pay for referring any fresher or referring a candidate for a
position who would be directly reporting to the person who referred him. The compensation
for successful hire through this scheme is about 5% of annual salary. The
success of such a system is when vacancies
are well advertised internally.
3.25 Campus
Placement. The banks go
Business schools for recruiting sales officers for the post of Sales officers.
The HR initiatives campus placements based on long term forecast of sales
officers. While recruiting from campus, the bank screens for candidate having a
good academic record, family background with sound academic records in both
Graduation and Class XII.
Yes bank goes to Tier I & II B-schools for recruiting sales officers for
the post of Client Sales Partner (CSPs) and about 15% of the positions at Yes bank Delhi are presently being filled through such methodology. The advantages/ disadvantages of campus placement are as
follows:-
ADVANTAGES & DIS-ADVANTAGES OF CAMPUS PLACEMENT
ADVANTAGES:
(a)
Inexpensive.
(b)
Good for mass induction at lower levels.
(c)
Allows hiring specific skills.
(d)
Source of talent that can be trained towards specific
competence.
(e)
Provides talented youth with drive.
(f)
Helps banks build reputation during such job fair/ campus
placement.
DISADVANTAGES:
(a) Competition is
fierce. Companies/ Banks all across India compete for similar un-experienced
low cost skills.
(b) Linked to academic session and therefore
useful towards long term manpower requirements.
(c) It has been observed
that often good candidates have many job offers. Therefore, may not ultimately
join.
(d) Training costs are very high for
candidates taken from campuses
3.26 Campus recruitment is a cost effective model
for mass recruitment after tying up with various B-schools. Business schools
have vast resource of talented students studying specialized courses in Banking
and Insurance. However, Banks
must plan staffing and be clear about its future manpower turnover/
requirement.
3.27 Direct
Advertisement. This is the
age old method of bringing employers and candidates together and is still widely
used. A clear and attractive newspaper advertisement with specific details is
eye-catching and invites immediate attention. The services of newspapers and
employment exchange are useful. About
10% of the positions at Yes bank Delhi are being filled through such direct
advertisement methodology. However, this is likely to grow substantially. The advantages and disadvantages are as
follows:-
3.28 Internal
Recruitment. As brought
out earlier, it involves filling vacancies through internal means from existing
employees. If external efforts are undertaken without considering the desires,
capabilities and potential of present employees, a bank may incur both short
and long run costs. In short run, morale may de-generate, in the long run banks
with a reputation for consistent neglect of in-house talent may find it
difficult to attract new candidates available through other channels. The
advantages and dis-advantages of internal recruitment are:-
Sources of
data:-
(a)
Line
and HR Managers.
(b)
Bank
records and documents.
(c)
Job consultants.
(d)
New employees hired through
various recruitment methodology list above.
(e)
Industry trends for online
recruitment.
(f)
Placement cells of
colleges the Bank visited e.g. ICFAI, IIPM, BIMT.
(g)
Internal
IT Helpdesk placed at Yes bank, Chanakya Puri Branch.
(h)
Questionnaire and survey
of HR/Managers/ Employees.
(i)
Wipro
Solutions, the vendor of the application software.
3.29 Current Scenario and Trend at Delhi/ NCR
Region. The percentage of recruitment undertaken by various methodologies at
Yes bank in Delhi and NCR are as depicted:-
3.30 Analysis from Interviews. Both the document based
research and questionnaire survey methods were used. Interviews
of 82 HR managers, Line managers, employees and candidates were undertaken to analyze
the trends in recruitment, which according to them are effective recruitment
strategies for private sector banks. The format of questionnaire is placed at
Appendix and results of effectiveness of each recruitment strategy according to
survey of HR / Line managers are as pictorially depicted:-
EFFECTIVENESS
OF RECRUITMENT STRATEGY
FROM
SURVEY OF HR/ LINE MANAGERS IN DELHI AND NCR
Survey of Employees
3.31 About
82 Line/HR managers and employees were interviewed on the effectiveness of a
particular recruitment methodology and it can be seen that Job Consultants,
Online, Referrals and Campus recruitment were the most preferred. The following
data on use and effectiveness was arrived at during the survey of employees:-
Survey
Questionnaire placed at Appendix (78 Line/HR Managers and employees
interviewed)
Mark scale 1(Not effective), 3
(Moderately effective), 5(Very effective)
Effectiveness was measured by the
following:-
(a) Cost per hire = Recruiting costs/ No of
positions
(b) Time to fill vacancy
(c) Staffing Efficiency ratio = Total recruiting
costs/ Total compensation
(d) Hire Quality
(e) Hiring Manager Satisfaction
3.32 Overall
Effective Recruitment Strategy (Data Arrived at from Bank Records). Banks need to continuously re-assess and estimate
recruitment strategies and its effectiveness. Analysis of available data,
surveys and costs involved at Yes Bank were undertaken to arrive at an effective
recruitment strategy for the role of a Sales officer. Following was concluded:-
Evaluation
of Effectiveness of Methodologies for Recruitment of Sales Officers
3.32 HR and Line managers in private sector banks
need to think and act strategically to ensure availability of sales officers
with right skills. This involves adopting the correct methodology for
recruitment, selection and appointment with speed and transparency at lowest
cost.
3.33 Initial
consideration should be given to a bank’s employees, especially for filling
vacancies up to mid level positions. External recruitment should be resorted to
after potential of present employees have been exhausted. This will ensure
morale of employees does not de-generate. Additionally, larger organizations
might be more likely to have well defined succession. However, the need for
specific skill set for a specialized position cannot be ignored and therefore under
such circumstances external recruitment should be undertaken. Such preferential
decisions should be undertaken by the management, line managers and HR keeping organization
goals into consideration.
3.34 Recruitment
using job consultants though very effective for managerial positions can be
expensive. Executive search firms tend to match candidates to jobs faster that
most organizations internally can, on their own, primarily due to larger
database, wider access and core competence. Networking strategy is used by the
recruitment consultants widely.
3.35 Campus
recruitment is a very effective recruitment strategy, especially for mass
recruitment and candidate can be thereafter be trained. However, during
interview of such student candidates, it emerged that organization and its
career opportunities are prime motivation factor for students to seek
employment with any particular organization. Two major advantage of this
strategy is cost and convenience. However, such recruitment is limited to
selected period of the year and requires prior planning of sales force needed
by the organization.
3.36 It has been observed from the data, online
recruitment methodology is very effective. However, the rise of more and more
online job portals coupled with the tightness of the market has also had a
negative influence on recruitment. Many banks thought that advertising in
online job portals could reduce their dependency on job consultants and lower
recruitment costs. However, large no of job portals have fragmented the demand
and supply side market. It has therefore become necessary to advertise and
search in more and more job portals, which is proving to be time-consuming, costly
for banks and also becoming ineffective.
3.37 The success of the recruitment process is
not only determined by the methodology that are used for search and selection,
but also by the way these methodologies are used. One also needs to take into
account the following:-
(a)
What
are the no of positions available?
(b)
What
role does the recruited position play and its importance?
(c)
Can
the role be re-organized for better organization effectiveness?
(d)
Can
internal candidate be trained for the position and what are the costs, time
involved?
(e)
How
long do you expect the new candidate to remain in the role and stay in the
bank?
(f)
What
are the organization retention strategies?
(g)
What
is your plan for the recruitment process and monitoring?
3.38 Recruitment strategy can be targeted or
broad-based. Targeted recruitment is specific, focused and addressed to the
section where one believes to find the right candidate for the particular
position. Broad-based recruitment can be effective for positions that easily
filled with minimal training. Organizations and Banks
also have to work towards building a brand value which impacts employee positively.
As Hertzberg work suggests that the line managers play a pivotal role both as
‘hygiene’ and ‘motivation’ factor that impact on both employee’s attraction and
retention. Image and a reality of ethical and trustworthy operations in the
organization is a major attraction to both potential candidate and those
already employed.
3.39 Recruitment
Plan. Based on the recruitment methodology arrived or
the organization wishes to adopt, a recruitment plan should be devised. The
present study after taking all available data and inputs came up with a Recruitment
Plan template. This template in placed at Annexure. The following are the
salient points towards a successful recruitment plan:-
(a)
Recruiting the right person starts with a detailed job description
and personal specification. It also involves following a recruitment process
that produces a suitable candidate at a minimum cost to the bank.
(b)
The more complex the job, the more complex the recruitment process
needs would be. However, as a minimum, the interview process should include at
least two level interviews, a psychometric assessment and a thorough reference
check.
(c)
Advertisements through various recruitment methodologies should be
clear, to the point indicating job description.
(d)
Interviews should be highly structured and based on proven
methodologies. They should reveal levels of competency in key areas,
appropriateness of experience, personality strengths and weaknesses and
integrity.
(e)
Carefully selected psychometric assessments are valuable tools in
the selection process, but not to the exclusion of a structured interview.
Individuals should be selected on the basis of past performance, competence and
personality.
(f)
Always recruit the right person for the job. Recruitment should be
seen as a 'rejection process' as much as a 'selection process'. One shouldn’t
be tempted to pick 'the best of from a bad lot’
(g)
Screen likely candidates with a simple telephone interview before
deciding who to invite for the face-to-face interview.
(h)
When one actually meets the candidates, let them tell about their
background and achievements. The details about the job, the compensation, the
company, etc should follow.
(i)
Identify what initial training will be required and how much will
be needed to invest in the candidate and whether he or she is worth that
investment.
(j)
Never over sell the job. Honesty about the role should be the best
policy.
(k)
Background & reference checks are very vital. During interview
of new sales officers at Yes Bank, it was found that around 40% of new
employees never had references taken up. Background checks should be as
thorough, as possible and should include employment history and character
references.
3.40 Limitation of the Present Study. Some of the
most used methods are not the ones found to be most effective under all
circumstances and scenarios. Most banks do not have a clearly defined
recruitment strategy, but use a shot-gun approach to find candidates for their
vacancies. This study has not considered regional areas factors, Gender of
candidates, age, discriminations etc in a detailed manner. However, this is not
to say that there isn’t a problem in this area or methodologies for recruitment
will not be different. As seen in tables above, the
response varied between segments analyzed. Some discrepancy were noticed which can
have generalization error.
4
RECOMMENDATION
& CONCLUSION
Recommendation
4.1
Recruiting
can no longer be confined to the traditional ways. With the war of talent
intensifying, employers are broadening their reach though innovative channels.
Static recruitment no longer suffices in today’s context of cost effectiveness
and efficiency. HR professional have a big responsibility to hire a best
candidate from the available sources discussed above. At the same time, one has
to be cost conscious. No process is complete without an evaluation of its
success. All executives interviewed accentuated the
importance of employer branding in attracting highly suitable candidates. Job
consultants, online applications and Campus placements emerged the most
effective external recruitment methodology used. Most showcase organizations
and private sector banks today have started using technology to screen resumes,
filter applicants and build database for future use. Based on all
available data, an optimum, cost effective, diverse
and scalable recruitment strategy or methodology for recruitment of sales
officers was arrived at by the author targeting each methodology. Private
sector banks should aim to achieve the model by reengineering processes,
maximizing use of technology to reduce costs and exploit each source
effectively.
Conclusion
4.2 This report has investigated the various methodologies for
recruitment and the need was therefore to arrive at a recruitment strategy for
the private sector banks. As brought out earlier, the success of the
recruitment strategy is not only determined by the methodology that are used
for search and selection, but also by the way these methodologies are used and
implemented. The processes should ensure
that there is no
"shot-gun approach” as a last resort after failing to fill the position. Outsourcing
of the recruitment process to an agency versus doing this work in-house as a
core HR responsibility is part of the strategic choice companies should
consider in determining a clear and effective HR recruitment strategy. Trying
to do both adds costs as HR resources go up and the required time to fill
vacancies often increases leading to less efficiency in finding and selecting
candidates for open positions. Employers have to use all available information and
techniques available to them including the more traditional tools of common
sense and good judgment when making the right hiring choices for available
vacancies. The following are to be considered
additionally:-
(a)
Ensure
you look internally prior to adopting any external recruitment strategies.
(b)
Have a
clear understanding of the current marketplace including salary, skills
shortages reasons for candidates to join the bank.
(c)
Map a
consistent recruitment / hiring process for each new recruit.
(d)
Create a
consistent job profile for each requirement.
(e)
Ensure
feedback is offered. Feedback forms should be completed for each candidate
interviewed.
(f)
Ensure
relevant management information is collated and presented to hiring managers
from suppliers.
(g)
Have a
clear understanding of the best methods of attracting employees, devise an
attraction strategy.
(h)
Review
all testing and assessment products and processes.
(i)
Once you
have successfully recruited staff, make sure you keep them by introducing
attractive retention measures and developing innovative and creative training
programme to keep them motivated and engaged.
(j)
Hold
focus group meetings of employees.
5
ANNEXURES
LIST OF ANNEXES
I APPROVED PROJECT SYNOPSIS
II QUESTIONNAIRE FOR INTERNAL/ EXTERNAL
EMPLOYEES AND CANDIDATES
III QUESTIONNAIRE – ATTRACTION (NEW
EMPLOYEES)
IV QUESTIONNAIRE FOR HR MANAGRS AND LINE
MANAGERS
V PROPOSED RECRUITMENT PLAN FOR PVT LTD YES BANK
VI SAMPLE
QUESTION FOR INTERVIEW
VII LIST
OF CANDIDATES INTERVIEWED/ PARTICIPATED IN SURVEY
VIII FEEDBACK FORM
NAME xxxx
DATE
OF JOINING
ANNEXURE
– II
QUESTIONNAIRE FOR INTERNAL/
EXTERNAL EMPLOYEES AND CANDIDATES
Please
rate these points on a scale of 1 to 5 as per the following:
1 - Completely
Disagree (Lo)
2 - Mostly
Disagree
3 - Neutral
4 - Mostly
Agree
5 - Completely
Agree (Hi)
1. On a scale of 1 to 5 how do you feel
about joining, working for us and why?
ð Job consultants
ð Online applications
ð Referrals
ð Campus placements
ð Direct Advertisement
3. What according to you (on a scale of 1
to 5) are the primary causes for high attrition in the banking industry?
ð Salary
ð Low Tolerance
ð Better prospects elsewhere
ð Market Liberalization
ð Poor Processes
ð Company Brand
ð Job Content
ð Poor Growth
ð Poor Incentives
ð Job Security
ð Rewards elsewhere
ð HR/ Other Policies
ð Management
NAME xxxxx
DATE
OF JOINING
ANNEXURE
– IV
QUESTIONNAIRE FOR HR MANAGRS
AND LINE MANAGERS
Please
rate these points on a scale of 1 to 5 as per the following:
1 - Completely
Disagree (Lo)
2 - Mostly
Disagree
3 - Neutral
4 - Mostly
Agree
5 - Completely
Agree (Hi)
1. Which of the two main recruitment methodologies, Internal Recruitment or External Recruitment
according to you should be resorted to and why (Please elaborate) ?
2. Can you rate in order of merit the
following external recruitment methodologies that you believe are cost
effective and can easily reach out to best candidates in Delhi and NCR:-
DELHI
ð Job consultants
ð Online applications
ð Referrals
ð Campus placements
ð Direct Advertisement
|
NCR
ð Job consultants
ð Online applications
ð Referrals
ð Campus placements
ð Direct Advertisement
|
3. What according to you on a scale of 1
to 5 are the primary causes for high attrition in the banking industry?
ð Salary
ð Low
Tolerance
ð Better
prospects elsewhere
ð Market
Liberalization
ð Poor
Processes
ð Company
Brand
ð Job
Content
ð Poor
Growth
ð Poor
Incentives
ð Job
Security
ð Rewards
elsewhere
ð HR/ Other
Policies
ð Management
4. Which
of the following could further improve recruitment in your organization (Rate 1
to 5)?
ð
Planned Hires
ð
Coordinated, sharing of business information
ð
Economy to scale/cost reduction
ð
Formalized agreements regarding business
terms
ð
Improved relationship with Job consultants
and Line/ HR managers
ð
Detailed job specifications
ð
Consistent screening methods and approach
ð
Structured
recruitment processes
ð
Effective
recruitment methodology
NAME xxxx
DATE OF JOINING
ANNEXURE
– III
QUESTIONNAIRE
– ATTRACTION (NEW EMPLOYEES)
Please
rate these points on a scale of 1 to 5 as per the following:
1 - Completely
Disagree (Lo)
2 - Mostly
Disagree
3 - Neutral
4 - Mostly
Agree
5 - Completely
Agree (Hi)
ð
I
like to work on the permanent roles of the company
ð
I
am more concerned about my designation rather than the job content
ð
I
value incentives more than my fixed salary
ð
I
value growth potential more than the salary in the organization
ð
I
value rewards and recognition more than my salary
ð
I
value the brand of my company more than the job content
ð
I
value HR policies more than my salary / job content
ð
I
value regular interaction & appreciation from the top management more than
any reward
ð
I
value job security more than my salary in the organization
ANNEXURE
– V
PROPOSED RECRUITMENT PLAN FOR PVT LTD YES BANK
1.
Date:
Section 1: Position Data
2. Working Title
3. Title Code and Payroll Title
4. Grade
5. Salary Range
6. Department
7. Hiring Authority (name & phone)
8. Recruitment Contact (name & phone):
9. Appointment Type:
10. Final
Filing Date
11. Estimated
Hire Date:
12. Is this a
new position?
13. No of
Positions
13. Full/ Part
Time?
14. Attachments
15. Job Description (Enclose attachments if
required).
Section 2: Recruitment Plan
16. Selection
Criteria
17. Scope of
Search (Nationwide/ Regional)
18. Recruitment Strategy
(a) Job consultants
(b) Online applications
(c) Referrals
(d) Campus placements
(e) Direct Advertisement
(f)
Internal
19. Selection Members:
20. Source of funds for recruitment with
estimates:
ANNEXURE VIII
FEEDBACK FORM
CASE – RECRUITMENT METHODOLOGY
We value your feedback. Please take some time to
fill this feedback form and fax it.
1. How useful is this case
study in providing you with some suggested approaches to deal with HR
recruitment issues?
Very useful Useful Moderately useful Not useful
2.
How do you rate the case study?
Very Good Good Neutral Poor
3. Would you consider
implementing the strategies/ approaches in the case study?
Yes No
Other Comments:
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
Particulars
of respondent
Name Designation
Organization
Address
Email
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