Unskilled Labor-The Strength behind Small Businesses

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Unskilled Labor-The Strength behind Small Businesses
30 Aug 2021
7 min read

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Micro, small or medium sized businesses or enterprises commonly known as SMEs are practically responsible for creating up to two third jobs worldwide, and help to create new jobs each year, giving employment to mostly unskilled labour. Despite the possibilities that are hailed in the small business sector, it is criticised for poor working conditions and informality, yet these facts are overlooked given that such small enterprises are the reason a labour is able to feed their family for a day and small enterprises cannot function without an unskilled workforce and given that. #ThinkWithNiche.

Before one gets in-depth as to how unskilled labor is the key to growth of small enterprises, one must understand what a small enterprise is. Well, in simpler terms, a small enterprise is a firm which has less than 250 staff members. In many countries, almost 90% of enterprises are SME based and surprisingly some micro-enterprises have even less than 10 employees. While there is no doubt that SMEs work on a small scale, the International Labor Organization reports that small enterprises provide employment to 70%  laborers (mostly unskilled) worldwide. As enterprises flourish on a smaller scale, the world cannot ignore the potential of SMEs. 

One might wonder how to manufacture goods at such a rate so that they reach all customers on time, they might scratch their heads and find a simple solution in the possibility of employing unskilled workers who are readily available. If one looks at it, employing labourers and setting up factories on the outskirts of major cities helps to cut down the migrant influx in bigger cities and metros, it reduces the pressure on urban cities, in terms of housing, transportation and waste management. 

While employing unskilled labour might sound very accommodating to the budget, it gets really tricky when the employers have the gauge through a pool of unskilled labourers. It becomes a Herculean task to filter the exact kind of labors required for the job, since the job roles are undefined and mostly unstructured. However the people working in the informal sector cannot afford to be unemployed, they seek employment mostly in agricultural, construction and grocery related sectors. 

Let Us Now Take A Look As To How And Why Unskilled Labour Acts As The Backbone For Most Small Enterprises

1. Source of Development

Unskilled labourers provide scope for development for any micro or mini firm/ startup since they are ready to work on any conditions placed by the employer, are available beyond working hours and are in need of employment. Data suggests that SMEs create more employment than bigger firms, they act as growth engines for social and economic development of the country. In many countries, SMEs contribute to 50% of GDP while the percentage globally happens to be 70%.  There is no doubt that SMEs are more likely to employ unskilled labourers who have lesser chances of employment. 

2. Helping the Supply Chain

While promoting a new business which runs on a small scale, there seems to exist a mounting pressure of providing and maintaining a stable supply chain in order to match the demand. In this process, workers come to the rescue of their firm and are able to deliver the set target for the day, since they are admirably hardworking.     

3. Small is Beautiful

While working in a small firm may not sound very pleasing to someone who is a graduate or someone from a big city, people from small towns and districts are pleased to work in a firm. Today’s changing scenario has given major credibility to SMEs and their employees, since the future is incomplete without them. Given the huge economic, social and global impact of SMEs, unskilled workers now hold a potential place in creating a sustainable growth pattern for countries and their potential is not to be ignored. Someone has rightly said that if we start supporting micro firms and enterprises and give employment to unskilled laborers, their future ahead shall be bright and promising. 

4. Considerable Wages

People working in the informal sector which engages in SMEs are employed at very minimum yet reasonable wages, given that they do unstructured tasks and are formally unskilled, hence their salaries are not something that bothers the employees, therefore the cycle of providing employment and creating new jobs keeps on going and on, resulting in maximum employment among the masses. 

Although the education system of our country helps become one an engineer or an accountant, but those devoid of education are also able to work on the same category of job requirements as that of an engineer or an accountant because of the jobs offered by the small business enterprises and other small scale industries, especially for people who are in dire need of work. Hence we come to a conclusion that despite working in an informal sector, unskilled labour is no less talented or hard-working than those employed in MNCs and other sectors.

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