Company’s culture in terms of processes, systems, and how employees are treated and valued apart from poor work-life balance, poor relationship with team members, lack of career growth and boredom in the workplace are among key reasons for employees switching jobs.
Even as the MSME sector is the second-largest job creator after the agriculture sector and is expected to create around 1 crore jobs in the coming four-five years, as per a report by consulting firm Nomura Research Institute, hiring and retaining talent is among the key challenges for Indian MSMEs. “Lack of adequate funds, technology knowledge gaps, a dearth of training and skills contribute towards MSMEs incompetence to attract tech-savvy talent,” Vikas Kakkar, Founder & CEO, HireXP — recruitment automation software provider told Financial Express Online.
Employment in Indian MSMEs grew by 13.9 per cent (3,32,394 new jobs) over the past four years, according to a CII survey earlier this year while the micro-enterprises churned the largest number of jobs and are likely to continue with the growth in the coming 3 years as well. MSMEs in Maharashtra, Gujarat and Telangana were the largest job generators.
The challenge in hiring is typically around the “discoverability by potential candidates,” Sashi Kumar, Managing Director at the India unit of the US-based job search site Indeed had told Financial Express Online earlier adding that “with job seekers moving to the online space in search of work opportunities, it is crucial that SMBs also be present and visible in the space where the talent pool lies in.”
In terms of retaining talent, Kakkar said that an employee’s immediate boss is one of the biggest reasons followed by finding a better job opportunity from another company, with a blend of high salary and attractive benefits. Company’s culture in terms of processes, systems, and mostly how employees are treated and valued apart from poor work-life balance, poor relationship with team members, and lack of career growth and boredom in the workplace are other key reasons for employees switching jobs.
The impact of attrition is directly linked with revenue and morale of the other team members that also increases the risk of churn even as SMEs have limited resources to mitigate risk in the key areas of business. Moreover, the costs involved in hiring and retaining a candidate are high while it depends on the industry and vertical SMEs are hiring in. Most of the SMEs outsource HR practices.
However, it is imperative for SMEs to optimize this cost by implementing basic hygiene. “SMEs should have the finest people managers who talk frequently to employees and encourage them with their progress and development. Also, they should help employees expand their skill set with adequate training and avoid hiring people who are not a culture fit,” said Kakkar adding that the HR-tech market in India will be worth $20 billion by 2021.
Nonetheless, to make the hiring process more efficient, MSMEs need access to a large reserve of “potential candidates that can be filtered as per relevance to the company’s requirements, thus ensuring that the right job role is matched to the right job seeker,” said Kumar adding that 76 million people in India browse a career-related site each month.