Understanding and retaining Gen Z: Key focus for India's BFSI industry

Mint

29-05-2025

According to a Great Place To Work India report, the share of Gen Z employees (those born between 1997 and 2012) in India's banking, financial services, and insurance (BFSI) sector has nearly doubled in two years, increasing from 12% in 2023 to 23% in 2025. Another projection by EY says Gen Z will make up 27% of the workforce by 2025.
As more and more Baby Boomers leave the workforce, the need for future talent in the banking sector is clearer than ever. But the new generation is a changed lot. With a softer upbringing and exposure to technology, understanding and dealing with them isn't easy for organisations.
Most Gen Z prefer jobs that align with their personal choice. They prefer flexibility and are inclined towards purpose-driven organisations. However, a high attrition rate, particularly among tech employees, due to a growing technology skill gap, is a major reason why organisations are struggling to get it right with Gen Z.
To brainstorm and arrive at solutions to check attrition among Gen Z and understand ways to hire them, Mint, in association with UNext Manipal Academy of BFSI organised a roundtable with some top HR experts from the BFSI industry. The idea was to understand what the top companies are doing to attract the right kind of talent and how they are retaining them.
Earlier, the Central Bank of India used to attract talent only through IBPS exams. Now, it reaches out to Gen Z using all possible channels. Its CHRO Poppy Sharma stressed how the organisation is embracing tech fast and has recently introduced an AI tool for hiring. The tool helps it sift through a large volume of applications before sending a final list to the employer.
Zurich Kotak General Insurance is trying to build a robust campus programme with an internship pipeline and see how Gen Z can be more welcoming of an organisation. 'We have divided the hiring process into lateral and Gen Z recruitment from campuses. When we hire individuals with product knowledge, it takes considerable time before they start generating business for us. Therefore, we are working to create an HTD model and begin building relationships with campuses,' said Akhila Ananthanarayanan, Vice President - Talent Acquisition, Zurich Kotak General Insurance.
'Attracting Gen Z is one part of the equation–the other is helping them thrive in a multigenerational workplace,' said Vaishali Worah, Head Learning & Development, Axis Mutual Fund. 'We run sessions that coach young talent to value different workstyles and parallelly equip managers to lead Gen Z with empathy and adaptability. Retention is not just about new age perks or policies, it is also about having mutual respect and real understanding between multiple generations working as a team.'
IndusInd Bank, which has 50,000 employees, is on a hiring spree. In the past few years, the focus has been on the retail side, increasing the number of branches, etc., therefore, the hiring. 'When we hire techies from campus, our partners create curated assessment hackathons, which do an initial level of filtering, and it helps us bring in quality people,' said Rupesh Shinde, Head-HR Technology.
The experts agreed that institutions should invest in modernizing their digital platforms and in offering innovative fintech solutions. They need to be transparent, build trust and authenticity, enhance business literacy, and develop personalized products and services.
Ashish Parab, VP & Head-Sales HR,Star Union Dai-ichi Life Insurance Company Limited said: 'The real challenge wasn't hiring people, it was preparing the organisation to welcome them. Talent acquisition is just one part of the equation, real success comes from building a culture where Gen Z feels genuinely accepted, understood, and empowered to thrive.'
'In terms of attrition, we have reached 8.16% attrition of FTE, perhaps making us No. 1 among the NBFCs with the lowest attrition rate,' said Ravi Khanna, Head – Human Resources, BOBCARD Ltd. 'This percentage is significantly down over the last 2-3 years, which is a huge positive. We also got a very high score in our Employee Engagement Survey in FY25. The idea was to focus on doing the right things in-house because if people are happy with your engagement internally, word will spread, and that will attract better talent.'
As far as understanding Gen Z is concerned, the Tamilnad Mercantile Bank is getting it pretty right. Involving family members, making them aware of the positives of the organisation is a big pull for Gen Z. The bank, with one of the lowest attrition rates (3%), has somehow cracked the code for attracting and retaining Gen Z.
'There is a deep understanding between the organisation and the employee. We have 5,000 employees, and it's the job of each leader to be a mentor and help their colleagues grow. Our workforce is 25% Gen Z and 60% millennials, and each of them has been picked and trained to ensure they can fit into the culture of the company,' said D. Ramesh, Executive Vice President HR.
In Aditya Birla Capital, lucrative campaigns that were also transparent were a big game-changer. Clear career paths in the organisation, fast promotions, and purpose-driven campaigns were appreciated by Gen Z. While on one hand, the company was trying to find the sweet spot to attract young talent, on the other, it was battling high attrition rates as well. Life insurance, in particular, witnesses an insanely high attrition rate across companies.
'In Aditya Birla Capital, the attrition rate last year was 42%, but in the life insurance business, we closed at 62%, when the industry average was 58%. We have taken a few initiatives, including introducing a two-year excellence programme or a journey that we have created for front-line sales, and we are also bringing people from campuses,' said Vikas Kapoor, Head L&D at Aditya Birla Capital.
Facing a similar situation isYes Securities (India) Limited. With an attrition rate of45% two years ago, the company had to do some serious thinking to keep its young talent from leaving.
'Today, our attrition rate is 22%. Initially, we thought compensation was a problem. But we realised we were paying at par with the market when we did a market comparison. We initiated various employee engagement initiatives for our employees, including executive medical check-ups, subsidised food, family benefits, and, most critically, a focus on learning and development. These initiatives have helped the organisation to reduce the attrition and further increased employee happiness,' saidAbhijeet Bose,Head - Human CapitalManagement.
For the Central Bank of India, a minor increase in the attrition rate was a big red flag. One of the key reasons, the bank realized, was mandatory transfers. 'Because 40% of our employees came from four states, we had to send them to other states of the country as people weren't joining us much from there. To check that, we came up with the concept of zone-based recruitment. In this concept, the new recruits, till scale 3, will not be transferred to other states,' said Poppy Sharma, CHRO.
The need of the hour is to understand what one is running in the organisation should be relevant to the set of people being hired.
'Earlier, when we were hiring millennials, a year-long commitment was fine with them, but now even a five-month commitment is long-term for Gen Z. We also run an entrepreneurial model, where one can join as a business development officer and earn commissions or incentives for recruiting agents on doing business,' said Anjum Sheikh, Lead HR – Associate VP, Tata AIG.
Amid the changing scenario in the BFSI workforce, Manipal Academy of BFSI, a UNext Learning entity backed by the Manipal Education and Medical Group (MEMG), which provides industry-relevant education and training for freshers and existing professionals, has built a model so that students have some skin in the game.
'For insurance, there's a two-month training followed by an internship, enabling both sides to know each other. Students get to know the organisation, as many senior management members come over for discussions on the campus. This engagement helps in retention versus hiring freshers straight from college,' said Aatash Shah, SVP & Head – Business.
If the organisation is consistent, word of mouth goes out. 'Gen Zs look at branding and social image, they seek transparency and esteem.They are open to multidimensional on-the-go learning. They need a really good direction as their attention span is relatively lower. Those who focus on their attention span are likely to find purpose and prosper,' said Sunder Natarajan, CHRO of India First Life Insurance. A lot of it is about perception, and also that Gen Z prefer short-term gigs rather than long-term gigs.