Top 7 BFSI Industry Recruitment Challenges

The Indian BFSI sector is booming! This rapid growth has led to a surge in demand for fresh talent, especially in sales, advisory, and operations roles. In 2024 alone, we saw a 20-25% jump in demand for junior-level positions, thanks to the booming housing, personal loan, and credit card markets.

However, this growth comes with its own set of challenges. High attrition rates and a shortage of skilled talent in frontline roles are major hurdles for many BFSI companies.

In this blog, we will dive into seven recruitment challenges in the BFSI industry and share some key practical solutions to overcome some of these contract recruitment challenges. Let us first try to understand what are some of the biggest challenges that BFSI sector faces:

1. High Attrition Rate in Customer-Facing and Sales Roles in BFSI:
   In BFSI recruitment, the customer-facing roles along with the entry-level positions such as a sales executive, customer service agent, and collection officers frequently have high attrition in range of 30-40%. It’s common for entry-level hires to leave shortly after joining, often seeking better pay or job security. This is especially true for sales roles, where employees may resign if they struggle to meet targets. This high turnover (or attrition) presents a major challenge for the companies affecting boh productivity and stability.
2. Recruitment Challenges in Remote & Semi-Urban Areas for BFSI Roles:
   The government’s push for financial inclusion in India has raised demand for BFSI services among the non-urban and rural population. This growth was primarily observed in Tier II and Tier III cities, which experienced increases of around 23% and 37%, respectively.  To engage effectively with customers in these regions, organizations must prioritize localization and personalization in customer-facing roles. However, candidates in remote areas often lack the necessary skills and exposure to financial services, complicating talent sourcing. This brings us to the next challenge in BFSI recruitment in India – Skill gap.
3. Skill Gaps in Digital Banking and Fintech Operations:
   As digitization increases, the BFSI recruitment in the entry-level workforce is expected to be equipped with basic digital tools, and fundamental knowledge of fintech processes. Apart from this, the most sought-after competencies in the industry include problem-solving, effective time management, and exceptional after-sales service, as these competencies are crucial for maintaining customer satisfaction and operational efficiency. [For more details refer to TeamLease Employment Outlook Report H1 FY25] The gap between the desired technological aspect and what the candidate brings to the table also lies in mobile and digital banking systems.
4. Challenges with Compliance and Background Checks:
   BFSI is a highly regulated industry; hence it needs strict compliance and background verification. The process tends to delay the recruitment cycle, especially when scaling up the workforce requirements. Background checks and document verification are essential, but they have a tendency to prolong the hiring process, which thus creates a delay in filling high-demand entry positions.
5. Seasonality in workforce demand:
   The BFSI industry faces seasonal demand for contract workers during festive season, financial year-end, tax related investment time, and product launches. Recently, Consumer spending during the festival season has resulted in a 20% increase in job growth within the banking and finance sector, primarily driven by the rising demand for credit products. Managing this seasonality is a logistical challenge, as meeting sudden entry-level demand while ensuring quality work is tough without a ready talent pool.
6. Expectation Gaps Contributing to Early Attrition:
   Usually, there is a mismatch between what entry-level talent expects from a BFSI job and the realities of day-to-day work, especially high-pressure areas such as sales or customer service. Many sales targets cannot be met. Customers can have a tough time. Usually, this leads to early exit.
7. Limited Training and Development Opportunities:
   Entry-level staff in the BFSI sector often face limited training and career advancement, deterring talent from joining or staying. Without effective onboarding and upskilling, new hires may feel unprepared, especially in customer service or sales, leading to lower job satisfaction and higher turnover as they seek better growth opportunities.

In addition to these issues, organizations face numerous recruitment challenges that require targeted solutions to streamline their processes. Addressing these challenges is essential for meeting both immediate and long-term staffing needs.