India’s small and medium-sized enterprises (SMEs) sector is among the strongest in the Asia Pacific region. The estimated 51 Mn SMEs in India constitute the country’s biggest employer after agriculture. The SME sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades.
It not only plays a crucial role in providing vast employment opportunities at comparatively lower capital cost than large industries but also helps in the industrialisation of rural areas; thereby reducing regional imbalances and assuring more equitable distribution of national income and wealth. Government data suggests that the sector provides employment to over 80 Mn.
The sector, through more than 6,000 products, contributes about 8% to GDP, 45% to the total manufacturing output and 40% to the exports from the country. The SME sector has the potential to spread industrial growth across the country and can evolve as a major partner in the process of inclusive growth.
How Digital Transformation Is Driving SMEs
One of the key growth drivers of the SME industry is digital transformation. Take for instance, the impact that increased digital literacy and better digital infrastructure has had on the SME sector in India. When more SMEs are able to take their businesses online and thereby reach out to a larger customer base, the scope of operations will expand and further development will be accelerated. Recent initiatives from the Government of India, such as Digital India will provide further impetus to the digitisation of the SME sector in India.
Major technology companies have also been seen supporting the cause of SMEs, by developing tools particularly suited to enhance the business efficiency and productivity of these enterprises. For instance, Google India launched a new initiative called Google Advantage, designed specifically to help SMEs leverage the rising Internet user base. Google had launched another new product, ‘Google My Business’ to help Indian SMBs succeed online.
Related Article: Power2SME Raises $10 Mn In Equity Funding From IFC For Expansion
The objective was to help SMBs to create and update their business information on Google Search, Maps and Google+ from one place, for free, in both Hindi and English. Similarly, Microsoft has launched its cloud adoption program for SMBs in India under the Cloud Solution Providers (CSP) model. Recently, Infosys and GE joined hands for developing new Internet of Things solutions that will help manufacturers and other industrial enterprises to improve asset efficiency and build more intelligent linkages between design, production and field testing. These are a few examples of ongoing engagement with SMBs in India.
The Advent Of Ecommerce: The Growth Of Online SMEs
Over the last few years, this sector has seen rapid growth, especially with the adoption of ecommerce and new technologies which are making it easier to reach their customers more efficiently. SMEs discover a number of benefits, such as increase in revenues, lower marketing and distribution spend and increase in profit margins that can accrue from digitisation. The improved geographic reach and accessibility and superior management of data storage functions also serve to drive innovation, improve customer experience and facilitate effective hiring through the digital medium.
The increasing number of SME entrants in the industry each year spawns a continuing need for talent that will swell the large section of the population that this sector already employs.
Hiring Talent Matters
In this scenario, how can SME’s expect to tap the right talent efficiently while focusing on other important areas of business? SMEs are generally characterised by small operations teams that may not include a full-fledged HR function. These enterprises also lack the financial resources to hire external consultants to find the right employees at any level.
With the increasing internet penetration, online or digital hiring will emerge as advantageous as the ideal channel. With both the job seeker and the employer available on a common platform, the task of recruitment becomes more streamlined and efficient.
At Babajob, for instance, there are over 230,000 SMEs that have posted jobs in the past year. Blue collar employees such as drivers, maids, security guards, delivery boys etc., are recruited without hassles because specific requirements are stated online, saving time, effort and cost.
Digital hiring methods that minimise and control the cost of maintaining large teams of HR personnel will also assure a more focussed and fine-tuned recruitment process through technology-aided short-listing mechanisms.
SMEs that choose digital hiring systems will stand to gain in a highly competitive and dynamic industry environment because lean and contoured workforces will define the critical edge that differentiates the leading players.