Private Bank

AN ANALYSIS OF THE RECRUITMENT METHODOLOGY OF SALES OFFICERS IN A PRIVATE BANK
(A CASE STUDY OF A PVT LTD YESBANK)

BY KINSHUK DE

CONTENTS
Chapter
1. INTRODUCTION
1.1 1.2 1.3 1.6 1.7 1.8 1.9 AIM BACKGROUND INDIA’S BANKING SCENE EMERGENCE OF PRIVATE SECTOR BANKS NATURE OF PROBLEM JUSTIFICATION ATTRITION

2.

RESEARCH METHODOLOGY
2.1 2.2 2.2 2.5 2.6 2.7 AIM OBJECTIVE OF STUDY RESEARCH TECHNIQUES RECRUITMENT METHODOLOGIES INTERNAL RECRUITMENT 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
2

5.

ANNEXURES

3

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.

4

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.

5

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:-

6

Real GDP Growth Rate
%

12 10 8 6 4 2 0

10.5 8.3 7.5 5.6 5.5 5.3 5.1 4.5 4

Ch in a

Ko ng

In do ne si a

M al ay si a

Ko re a

In di a

nd Th ai la

Si ng ap o

Ho ng

Loan Growth
% 30 25 20 15 10 5 0
K or ea K on g an nd na a a In di C hi Ta iw al ay la ga p Si n or e si

27.6

13.4

9.9

8.1

7.7

6.4

6.4

Ta iw an

re

5.1

H on g

M

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. 7

Th ai

New Business Opportunities being tapped by Private Sector banks
Derivatives Trading 36.8% Wealth Managem ent 21.05% Selling of Mutual Funds 73.6%

Forex Managem ent 68.4%

Bancassurance 73.6%

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 8

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) (b) (c) High Net-worth Individuals* Mass Affluent Customers** Mass Banking Customers*** Relationship Managers Sales Managers

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:-

9

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m)

Hires are often panic hiring ‘short gun approach’. No co-ordination, sharing of business information or best practices. No economy of scale/cost reduction. No formalized agreements regarding terms of business. Isolated relationships with individual suppliers and line/ HR managers. Misinterpretation of job specifications. No separate project-based recruitment strategies. Little use of internal recruitment. Insufficient sector knowledge from job consultants. No consistency in approach. Very high quantity of CVs and not enough quality. Lack of consistent screening methods. 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 10

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, 11

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.

12

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) (b) (c) To review the existing process of recruiting Sales Officers. To measure the efficiency of the hiring process. 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:13

(a)

Through structured questionnaire filled in by internal, external

candidates and line/ HR managers. (b) (c) (d) (e) (f) 2.4 Interviews. Collection of raw data. Industry practices. Trend and Reports. Bank’s records and documents.

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:-

14

(a) (b)

Internal Recruitment 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) (b) (c) (d) (e) Job consultants Campus Placement. Online Application. Recruitment advertising. Referrals 15

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 16

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 business strategy and entrepreneurial leadership, highly rated

focused

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).

17

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 foreign investors in Yes Bank are Rabobank, Citigroup Venture Capital International, Chrys Capital and AIF Capital. 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.

RELATIONSHIP VERTICAL Corporate & Institutional Banking Development Knowledge Banking Investment Banking Treasury Business Banking Emerging Corporate Banking Retail Banking

Treasury

P R O D U C T V E

Corporate & Development Banking Transaction Banking Corporate Finance

18

T I C A L 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:-

President

Senior VP

Relationship manager Retail Banking NCR & Punjab

Relationship manager Retail Banking UP

Relationship Manager Business Banking EC, C&IB

Relationship manager C.P.U.

Relationship manager Training & Development

Relationship manager HR Operations

3.7

Nature of Recruitment Problem Faced at Yes Bank (From Bank Like any startup Bank, the HR department faces the uphill task of

Records).

recruiting the branch team and sales force for every new branch. This could be 19

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.

Business Unit (360 officers)
RETAIL BANKING & WEALTH

<1 Sub-Unit Month

1-3 Months

3-6

6-12

>12 Total

Months Months Months

Banc1 3 1 2 6 6% 26 2 6 34 35% 22 1 9 32 33% 2 54 4 18 96 Branch Banking Liabilities 1 2 2%

MANAGEMENT assurance

Grand Total Total Attrition (%)

2 2%

94 out of 360 sales officers leave bank within one year 35% between 3-6 months 33% between 6-12 months

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 20

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

21

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:-

22

Line projects need for manpower

Informs HR

HR departmen t

Search for potential employees against job description

Consultants

References

RECRUITMENT METHODOLOGY Potential candidates identified

Interview by line and HR managers

Candidat e selected

No

Yes A

23

A

If senior managemen t position

Yes

Interview by CEO

No Back papers, resume, salary slip and offer letter of candidate sent to CEO along with the organization chart

Offer letter signed by CEO sent to the candidate

Employee joins and is given the joining kit by the HR department 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 24

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 (i) (ii) (iii) (iv) (v) (b) 3.14 Job consultants Online applications Referrals Campus placements Direct Advertisement

Internal Recruitment 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 25

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 & DIS-ADVANTAGES OF JOB CONSULTANTS ADVANTAGES DISADVANTAGES Get candidates for specific skill (a) Very expensive. (b) are screened for (c) Not suitable for mass induction. Dependent of credibility of

(a)

set/ profile. (b) Resume

specific profile. (c) Quick and effective and way of

consultants.

matching candidates. 3.15

employers

potential

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.

26

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.

QUALITY OF CANDIDATES FROM JOB CONSULTANTS

21% 58% 21%
IN-SUFFICIENT AVERAGE GOOD

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, 27

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:-

(d)

ADVANTAGES & DISADVANTAGES OF ONLINE STSTEM ADVANTAGES DISADVANTAGES Quick and easy way of matching (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.

employers and potential candidates. (e) (f) Inexpensive. Wide publicity.

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

28

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. Snapshot of the Website:

29

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:-

(a)

ADVANTAGES & DISADVANTAGES OF REFERRAL STSTEM ADVANTAGES DISADVANTAGES Inexpensive compared to job (a) You may be obligated to hire in certain cases when candidate is not

consultants. (b)

Referred candidates are aware of suitable. (b) May lead to inter-personal issues. May not always produce desired

the culture. (c)

Employees refer candidates with (c)

good potential. (d) Results are quick.

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.

30

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 DISADVANTAGES Inexpensive. (a) Competition is fierce. Companies/ Good for mass induction at lower Banks all across India compete for similar un-experienced low cost skills. Allows hiring specific skills. 31 (b) Linked to academic session and

(a) (b) levels. (c)

(d)

Source of talent that can be therefore

useful

towards

long

term

trained towards specific competence. (e) (f)

manpower requirements.

Provides talented youth with drive. (c) It has been observed that often good Helps banks build reputation candidates have many job offers.

during such job fair/ campus placement.

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:-

32

(a)

ADVANTAGES & DIS-ADVANTAGES OF DIRECT ADVERTISEMENT ADVANTAGES DISADVANTAGES Effective medium when job (a) Ideal for mass recruitment.

requirements and competencies are well (b) May bring many applications which defined. (b) Very good reach. may not be suitable for the position. Therefore, requires extensive screening. (c) Can involve cost and results take

some time to fructify.

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:ADVANTAGES & DIS-ADVANTAGES OF INTERNAL RECRUITMENT ADVANTAGES DISADVANTAGES Ability of candidate and (a) Assessment of candidate is based on references, brief interview or less the reliable information. (b) May be difficult to find the right

(a)

competencies are well defined. (b) Internal candidate know

organization, its strength and weakness. (c) Promotion builds

motivation candidate suitable for the position with ideal mix of competencies from internal sources. 33

among existing employees. (d) Very cheap.

(c)

Transition

activities growth

and often

rapid mask

organizational

managerial deficiencies. However, when the growth rate slows down the and

deficiencies

become

apparent

organization find it difficult to undo the damage. The cost of remedial action can prove disastrous and prohibitive.

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.

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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:-

Yes Bank, Delhi

15 10 10 Campus Referral Internal 6

15

44 Job Consultant Direct Advertisement Online

Yes Bank, National Capital Region (NCR)

16 11 9 Campus Referral Internal 14

20

30 Job Consultant Direct Advertisement Online

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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:-

Yes Bank, NCR 18 10 10 Campus Referral Internal 18 26 Job Consultant Direct Advertisement Online 18

EFFECTIVENESS OF RECRUITMENT STRATEGY FROM SURVEY OF HR/ LINE MANAGERS IN DELHI AND NCR

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Yes Bank, National Capital Region (NCR) 20 12 10 Campus Referral Internal
Survey of Employees 3.31 About 82 Line/HR managers and employees were interviewed on the

19

16

25 Job Consultant Direct Advertisement Online

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:Recruitment Strategy Usefulness Priority (Data from respondents) Job Consultants Online applications Referrals Campus Placements Direct Advertisement Internal Recruitment       5 4 3 3 1 1 4.3 4.25 4.0 3.9 1.5 3.5 Effectiveness

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:-

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(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 Banks need to continuously re-assess and estimate recruitment

Records).

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:Recruitment Strategy Job Consultants Online applications Referrals Campus
Placements Direct Advertisement Internal

Applicability

Priority 5 4 3 3 1 1

Other Factors 4 3.5 4 3.8 1 2

Cost Effectiveness 3 5 4 5 3 5

Overall Effectiveness 4 4.2 3.2 3.8 2 3

     

Recruitment Mark scale 1(lo), 5(hi) for Priority Mark scale 1(lo), 5(hi) for Cost, Cost Effectiveness 1(lo), 5(hi), Overall Effectiveness 1(lo), 5(hi)

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

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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. 39

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) (b) (c) (d) What are the no of positions available? What role does the recruited position play and its importance? Can the role be re-organized for better organization effectiveness? 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) (g) What are the organization retention strategies? What is your plan for the recruitment process and monitoring?

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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. 41

(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 and achievements. The details about the job, the

background

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) policy. (k) Background & reference checks are very vital. During interview of Never over sell the job. Honesty about the role should be the best

new sales officers at Yes Bank, it was found that around 40% of new employees never had references taken up. Background checks should be 42

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.

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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.

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Proposed Recruitment Methodology 20 15 Campus Referral Internal Others 5 20 20 10 10 Job Consultant Direct Advertisement Online

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 45

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) recruit. (d) (e) Create a consistent job profile for each requirement. Ensure feedback is offered. Feedback forms should be Map a consistent recruitment / hiring process for each new

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) (i) Review all testing and assessment products and processes. 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.

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5 ANNEXURES
LIST OF ANNEXES I II APPROVED PROJECT SYNOPSIS QUESTIONNAIRE FOR INTERNAL/ EXTERNAL EMPLOYEES AND

CANDIDATES III IV V VI VII VIII QUESTIONNAIRE – ATTRACTION (NEW EMPLOYEES) QUESTIONNAIRE FOR HR MANAGRS AND LINE MANAGERS PROPOSED RECRUITMENT PLAN FOR PVT LTD YES BANK SAMPLE QUESTION FOR INTERVIEW LIST OF CANDIDATES INTERVIEWED/ PARTICIPATED IN SURVEY FEEDBACK FORM

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NAME DATE OF JOINING

KINSHUK DE

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 2 3 4 5

-

Completely Disagree (Lo) Mostly Disagree Neutral Mostly Agree Completely Agree (Hi)

1.

On a scale of 1 to 5 how do you feel about joining, working for us and why?

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2.

Can you rate in order of merit the following methodologies of recruitment that you

believe is cost effective and can easily reach out to you easily:Job consultants Online applications Referrals Campus placements 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? Salary Low Tolerance Better prospects elsewhere Market Liberalization Poor Processes Company Brand Job Content Poor Growth Poor Incentives

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Job Security Rewards elsewhere HR/ Other Policies Management

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NAME DATE OF JOINING

KINSHUK DE

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 2 3 4 5 Completely Disagree (Lo) Mostly Disagree Neutral Mostly Agree 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 Job consultants

NCR Job consultants

Online applications

Online applications

Referrals

Referrals

Campus placements

Campus placements

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Direct Advertisement

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?

Salary Low Tolerance Better prospects elsewhere Market Liberalization Poor Processes Company Brand Job Content Poor Growth Poor Incentives Job Security Rewards elsewhere HR/ Other Policies Management

4.

Which of the following could further improve recruitment in your organization (Rate 1 to 5)?

Planned Hires Coordinated, sharing of business information Economy to scale/cost reduction Formalized agreements regarding business terms Improved relationship with Job consultants and Line/ HR managers Detailed job specifications

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Consistent screening methods and approach Structured recruitment processes Effective recruitment methodology

53

NAME DATE OF JOINING ANNEXURE – III

Kinshuk De

QUESTIONNAIRE – ATTRACTION (NEW EMPLOYEES)

Please rate these points on a scale of 1 to 5 as per the following:

1 2 3 4 5

-

Completely Disagree (Lo) Mostly Disagree Neutral Mostly Agree Completely Agree (Hi)

I like to work on the permanent roles of the company

I am more concerned about my designation rather than the job content

I value incentives more than my fixed salary

I value growth potential more than the salary in the organization

I value rewards and recognition more than my salary

I value the brand of my company more than the job content

I value HR policies more than my salary / job content

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I value regular interaction & appreciation from the top management more than any reward

I value job security more than my salary in the organization

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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: 

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ANNEXURE VIII FEEDBACK FORM Kinshuk De
[email protected] Fax : +91-9810775595

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 2. Very Good Useful Moderately useful Not useful

How do you rate the case study? Good Neutral Poor

3. Would you consider implementing the strategies/ approaches in the case study? Yes No

Other Comments: ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ Particulars of respondent Name Organization Address Email Designation

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