Close on the heels of the central government opening up vacancies for lateral hiring, public sector banks (PSBs) are following a similar approach. State Bank of India (SBI) and Bank of Baroda (BoB) are among the leading state-owned banks considering lateral recruitments for specialised roles, such as digital banking and wealth management.

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Lateral hiring is the process of recruiting an expert from another organisation.

With digital banking becoming more integral to business, the PSBs are hiring specialists even for mid and junior-level roles. They are hiring specialists from information technology companies and private lenders. Bankers said that it is much easier for mid and junior-level employees to get assimilated than senior-level hires.

According to a former chief of a large PSB, direct hires and the probationary officers (PO) have different salary structures. Lateral recruits have a contractual arrangement with employers. He says it is easier to find talent from the market than train internal candidates, as these are specialized roles.

“Many lateral recruits join with the plan of just learning on the job and make the most of the opportunity," said another retired bank chief executive.

BoB is increasing lateral hiring for verticals such as digital lending and mobile banking. The bank, into which Dena Bank and Vijaya Bank were merged in April 2019, had more than 84,000 employees at the end of FY20. Its mobile banking customer base has more than doubled year-on-year, for the nine-month period ending December 31, 2020. The lender now wants to hire a consultant to manage lateral hiring.

SBI, in its FY20 report, said it has been recruiting specialised talent on lateral and contractual basis in areas such as wealth management, IT, information security, and risk and credit. It has taken the step to meet the demand of a fast-changing business landscape and meet regulatory norms.

A consultant said the PSBs are hiring people from private lenders to fill such specialised positions internally as they don’t have the skill sets. Moreover, the COVID-19 pandemic has taught them to become well versed with the crucial systemic challenges, she said.