HDFC Bank’s Mantra: Listen, Adapt, Grow

When you are the best-performing bank in the country, the numbers speak for themselves. With a revenue per employee of ₹1.22 crore and profit per employee of ₹0.26 crore, HDFC Bank is by far the most productive and cost-efficient bank in the country. In comparison, its closest competitor, ICICI Bank, lags at revenue per employee of ₹0.99 crore and profit per employee of ₹0.16 crore. But when a company views its human capital through a business-efficiency lens, the management cannot be oblivious to the lives behind the numbers — the fact that employees are as human as they can get.

Vinay Razdan, chief human resources officer, is cognisant about the challenge. “There is no denying that any high-performing organisation will have a certain kind of internal pressure about achieving business targets and, in my opinion, it’s the right pressure to have. But the real question is: How do you determine what is the right pressure?” says Razdan.

The bank has been working on initiatives to blend the right attributes around culture and people. “What we are asking is not ordinary ask from our people, hence, there was a realisation in the organisation some time back for the need to become a listening organisation — listening to our people through formal and informal channels,” says Razdan, who joined the bank in 2018.

With over 134,000-plus people spread across 6,300-plus branches, it was imperative to create a homogenous culture despite the heterogeneous nature of work. The bank’s culture statement is built on a six-pillar edifice comprising inclusion, integrity, humility, innovation, execution and collaboration. “We’ve been at it for the past two and a half years, evangelising them through a process which involves about 2,000 people, including all senior leaders,” says Razdan.

The listening architecture is four-pronged — listen for organisation sentiment, listen for development, listen for initiatives and listen for concerns.

For instance, to understand the organisational sentiment, an annual employee engagement survey results was cascaded down to all employees with over 20 sessions with the senior leadership team, followed by over 200 virtual sessions covering around 92% of eligible employees. To substantiate and get more information on the quantitative data, the bank also conducted 73 focus group discussions covering 1,400-plus employees. The feedback shared by employees was translated into a bank-level action plan.

To aid development, a mid-year review process is conducted every six months. Besides sharing developmental feedback with team members, concerns of team members are shared to take corrective actions and ensure an enabling environment for employees to perform.

Even as the bank is building its digital initiatives on the business front, it has partnered with an external agency to create an AI-driven solution for employees to generate and implement surveys to throw up meaningful insights. It has done a pilot of its virtual employee pulse tool for around 10,000 employees and is gearing up for organisation-wide deployment. Besides, focus group discussions are held with a cross section of employees, where the objective is to get structured feedback and insights about what is working well and areas of improvement.

The tool-kit seems to be working.

In a hypercompetitive business, the bank has thus far managed an impressive employee retention rate of 83%. Of its 134,000-plus workforce, 10% is top talent, where the retention rate is 97%, as reported by the bank in the Fortune India-Work Universe survey. “We called out three things that we expect of our leaders — to be nurturing, to be caring and to be collaborative,” says Razdan. The Nurture, Care, Collaborate Programme is designed to influence and sensitise over 12,000 people managers within the bank. “They are at a level where a positive shift in their behaviour will have maximum impact on the teams below,” believes Razdan.

It’s not without reason.

The bank wants to ensure it remains a preferred employer in the future as it looks to ramp up its people strength by 10% in FY23 and 40% by FY27. In FY22, the bank hired a record 21,486 people even as it opened 734 new branches. One such business where it is ramping up its presence is the unsecured segment. “We are opening up 900 new locations, of which 600 would be in Tier-III and IV cities, to boost our unsecured business (personal loans and business loans),” says Arvind Kapil, country head, retail assets.

While the bank builds on the bells and whistles around its employee engagement programme, the focus is also on nurturing the talent pool and, ensuring diversity within its ranks.

Among the several initiatives aimed at nurturing talent, an important one involves role modelling. “We pursued a top-down approach with our MD leading the way. He personally connected with over 150 senior leaders on the need to behave with integrity, be role models, earn the respect of our customers for lifetime by reiterating the 3 Cs — Culture, Conscience and Customers,” says Razdan.

Then there is ‘The CEO Club’, a programme focussed on building next-gen leaders from an impact group of 50–75 leaders identified through a rigorous selection process, who are then put through an intense 24-month journey on building cross-functional knowledge, future banking skill sets, and individual development. “The pool forms a vanguard to the new ways of banking and sends a visible, powerful message across the organisation on our investment on talent,” says Razdan.

But like in any big organisation there are some challenges in creating a common HR culture. For instance, since the bank is building its digital capabilities by hiring more tech talent, Razdan points out that it cannot bracket them under a common work code. “Branches have to work six days a week, with alternate Saturdays off. But the techies are used to five days a week, so you can’t sort of expect them to come on Saturdays. Recently we had given them the leeway despite knowing that it will create murmurs,” says Razdan with a grin.

But the big shift which is in the works is the reverse merger of parent HDFC with the bank.

While the combined entity will have a much bigger employee pool, Razdan does not see that as a challenge since HDFC has been running a single product business which the bank never had. “HDFC is already a very tightly run ship with the best cost-to-income ratios. So, it’s not a challenge but an opportunity to get better at our game.”

While the merger is still some time away, the bank is getting better at diversity. At present, 21% of employees comprise women and the bank has set a target of achieving a gender diversity ratio of 25% by FY25. This is significant as it calls for an incremental addition of close to 5,000 women each year. Says Smita Bhagat, country head, government and institutional business, “I tell women, always ask about equal opportunities and be assessed on what you can deliver based on your own skill set and competencies.”

The bank has also designed a career accelerator programme to augment the pipeline of women leaders at middle-management levels to create a future ready pipeline for women in decision making roles. It has run the first batch in this financial year and already moved 20% of the participants into higher order, decision-making roles.

Those who have quit their jobs are also being nudged to come back. “We are encouraging part-time working, and also taking people on contract. With this flexibility, we should be able to get more and more women contributing and will be able to attract more talent,” says Bhagat.

While the bank is redefining HR practices to stay relevant in an ever-evolving landscape, Bhagat believes it’s a long road ahead. “In our country, we are changing the way we are bringing up our daughters, but we are not changing as much as bringing up our sons,” she says.

While India’s complex socio-economic fabric offers no easy answers to a vexed problem, a sensitised people force at the country’s largest private bank could well show the way around — beyond just the numbers.