MSME jobs: Growth in small businesses’ intent to hire during Q1 FY22 drops amid Covid

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April 14, 2021 5:40 PM

Skill, Labour, Talent for MSMEs: The hiring intent among e-commerce and technology startups was high for the current quarter. From 41 per cent in Q4 FY21, the intent jumped to 51 per cent in Q1 FY22.

On a year-on-year basis, there was a notable growth of 25 per cent in hiring in March compared to the same month last year, led by sectors including IT-software, medical/ hospital and retail, the report said.The Covid and the following lockdown had forced businesses to either shut operations or continue on shoestring budgets with the minimal workforce.

Skill, Labour, Talent for MSMEs: The increase in hiring intent of small and medium enterprises (SMEs) for the current quarter (April-June FY22) was subdued in comparison to previous quarters. The percentage of small enterprises likely to hire employees during Q1 FY22 was up by a negligible 1 per cent to 20 per cent from 19 per cent in Q4 FY21, according to a TeamLease study. This indicated that SMEs are not likely to hire any more than they did during the previous quarter. Improvement in the hiring intent for medium enterprises as well during the current quarter wasn’t very significant as 22 per cent medium enterprises reported likeliness to hire people in comparison to 19 per cent during Q4 FY21.

“SMEs’ ability to flex their muscle and invest long term is limited and while intent to hire has improved but they have also been moderate and modest. They were already pushed into a corner when it came to their headcount because of the pandemic while everybody tried to be as lean as possible in operations,” Rituparna Chakraborty, Co-Founder & Executive Vice President, TeamLease Services told Financial Express Online.

The Covid and the following lockdown had forced businesses to either shut operations or continue on shoestring budgets with the minimal workforce. While many working in the informal set-up went back to their home towns, others were laid off, as per industry estimates. However, there is no formal data available on the number of jobs lost due to Covid and the lockdown period in the past 12 months. In fact, there is no official record with respect to the number of MSMEs that were shut during the period. “As MSMEs are there in both formal and informal sector, data regarding temporary or permanent closure of the units are not maintained by the Government of India in Ministry of Micro, Small and Medium Enterprises (MSME),” MSME Minister Nitin Gadkari had said in a written reply to a question in the Rajya Sabha.

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In contrast, the hiring intent among e-commerce and technology startups was high for the current quarter. From 41 per cent in Q4 FY21, the intent jumped to 51 per cent in Q1 FY22. “The startup ecosystem, which is largely tech-driven, has seen increased investment activity in the past two months. “There is no point in raising money if you are not going to invest in market acquisition which means you will have to hire. In e-commerce, nothing has slowed down and it will continue to grow. Nobody wants to be stopped now. In the last two to three weeks, despite the looming problem of restriction and lockdown, the organisations are not ready to alter their hiring intent at this time as they are better prepared this time,” added Chakraborty.

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