Banks look for CXOS on contract to slash costs

Leading Indian banks are increasingly hiring contract staff, including C-suite executives and have reached out to headhunting firms in their efforts to lower employee cost, said three people in the know.

- Devina Sengupta,Shayan Ghosh

According to the people cited above, banks are considering recruiting contract employees because long-term expenses, such as stock options, variable benefits, and retirement benefits in case of state-owned banks, which are typically applicable to permanent employees, are not part of compensation packages of contract workers.

The mandate for recruitment firms is to get subject-matter experts even if it means a 40% higher salary compared with staff of an equivalent grade, the people said. Five-year contracts are preferred by most banks as it is not binding on them to offer long-term incentives, said one of the three people, seeking anonymity. Lenders are recruiting economists, human resource executives, CXOs with fundraising capabilities, and chief development officers, besides technology and digital talent.