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The big problem of attracting and managing talent in MSMEs

Skill, Labour, Talent for MSMEs: The MSME sector in India is poised to employ 1 crore people over the next 3-4 years. The hardest challenge for the sector is to attract, recruit and manage talent.

The big problem of attracting and managing talent in MSMEs
Instead of focusing efforts on the traditional talent market, MSME founders can explore under-tapped reservoirs of talent.

By Navya Naveli Nanda and Madhura DasGupta Sinha

Skill, Labour, Talent for MSMEs: Priya (name changed) sighed in despair as she saw a mail titled ‘Resignation’ pop up in her inbox. As the founder of a young bootstrapped business, she was troubled by the frequent loss of talent from her organisation that was working to teach science to young children from economically deprived backgrounds.

She had curated her team from her earlier colleagues and their referrals from her past professional journey. She could not afford to compensate them well.

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Her team member, a young man from a reputed engineering college, had resigned because his wife had quit her job to raise their young child and he needed ‘financial stability of a big company’.

Priya’s problem is not new. The MSME sector in India is poised to employ 1 crore people over the next 3-4 years. The hardest challenge for the sector is to attract, recruit and manage talent. In a country where there is a huge chasm between education and employability, MSMEs do not have the power of brand names or deep pockets to make an impression at the top campuses. The fact that they do not have organisational structures, requirement to work long hours without clear job descriptions also do not help. Additionally, discoverability by the talent market remains a big problem as MSMEs do not have big budgets to advertise jobs or pay placement firms.

While the problems seem difficult, the sector can look at some creative solutions.

  1. Instead of focusing efforts on the traditional talent market, founders can explore under-tapped reservoirs of talent, especially women who have dropped out of the workforce or have never joined. For example, a fantastic NGO started by IIT alumni is creating ‘software engineers’ in just one year through a residential program for disadvantaged girls who cannot afford a 4 year engineering education. Many organisations are prioritising ‘skills over degrees’ and MSMEs can lead the way.
  2. Small businesses offer unparalleled learning opportunities, as the early employees get a chance to try new projects, with a bird’s eye view of the entire organisation. MSMEs can explore Employee Stock Option Plans for teams who help build the organisation. While it may seem complex, there are firms who help simplify the process and journey. 
  3. MSMEs can often offer unique advantages that large, established companies cannot. Whether it is offering Work-From-Home solutions or job sharing with colleagues across time zones, they can attract talent from remote locations and employees with needs for flexible timings. Social organisations can offer volunteering options to encourage returnees to build their CV, as they explore comeback options.
  4. Creative formats of student or returnee internships resulting in full time job roles post graduation are being experimented by fast-growing MSMEs who can offer the leverage of continuity and loyalty.  

As Priya sifted through the applications, she paused on an interesting profile. She was 45 years old, and graduated from a prestigious university; her children were off to college. She was on a break for the last 5 years but had upskilled herself diligently. She had tried and failed at her own venture. She lived in a small town near Bangalore and seemed genuinely interested in the mission of the business.  

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Fast forward, two years later. She turned out to be the most trusted leader in Priya’s firm, and started managing the most critical projects. She had also helped build an ecosystem for returning mothers, who were working from all parts of the country.

Priya’s new talent plan looked very different this year. She felt confident and optimistic.

(Navya Naveli Nanda is the Co-Founder of Aara Health and Founder of Project Naveli and Madhura DasGupta Sinha is the founder and CEO of Aspire For Her. Views are personal.)

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