Covid mutes MSMEs’ apprentice hiring outlook for H2 2020; only this many firms looking to hire more

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October 27, 2020 6:41 PM

Skill, Labour, Talent for MSMEs: Only 50 per cent small businesses believed apprentices to be fairly productive while only 10 per cent perceived them to be very productive.

However, due to the work-from-home infrastructure and subsequent data security investments, analysts are cautious in asserting a substantial improvement.40 per cent small businesses believed apprentices to be not productive at all.

Skill, Labour, Talent for MSMEs: The Covid pandemic, which has hit MSMEs hardest, has impacted the latter’s outlook for apprentice hiring for the current half of the year 2020. According to a report by the Teamlease Skills University on the current apprenticeship hiring trends based on the survey of 600 employers including large businesses and MSMEs across 18 sectors and 14 cities, only 32 per cent are looking hire more apprentices in the ongoing second half of the year while 45 per cent are seeing no change in the apprenticeship hiring even as 24 per cent MSMEs are looking to reduce hiring apprentices.

“Unfortunately, small and medium businesses are being hit hardest by the ongoing pandemic, which resulted in a very low net apprenticeship outlook (NAO),” the survey noted. The NAO for MSMEs stood at just 8 per cent in comparison to 38 per cent of large businesses. Among agriculture, manufacturing, and services sectors, MSMEs in services were most optimistic about hiring more apprentices vis-à-vis those in other two sectors. While 38 per cent services units were looking to increase their apprentice pool, 35 per cent MSMEs in manufacturing and 24 per cent in agriculture have a similar outlook. Nonetheless, 30 per cent manufacturing MSMEs, 28 per cent in services, and 20 per cent in agriculture were seeing a reduction in hiring the same.

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Nonetheless, the average number of apprentices likely to be onboarded is 121 for MSMEs in comparison to 256 for large businesses. However, when it comes to their perception over the productivity of hired apprentices, only 50 per cent small businesses believed them to be fairly productive while only 10 per cent perceived them to be very productive in comparison to 50 per cent large businesses who perceived them to be very productive. Also, 40 per cent small businesses believed them to be not productive at all vis-à-vis 7 per cent large businesses.

The Covid-induced pandemic had triggered a barrage of job losses among MSMEs as operations were brought to a near-complete halt due to negligible demand and consequent financial crunch. Around 25-30 million MSME employees  had lost their jobs by end of June this year, according to a survey by SKOCH Group, FISME, Bhartiya Vitta Salahkar Samiti, and Tax Law Educare Society. Moreover, 78 per cent of MSMEs and startups had reduced workforce in the past eight months, said a LocalCircles survey receiving over 7,000 responses from startups, MSMEs, and entrepreneurs across 104 districts of India.

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