April 1, 2022: A survey of 2000 MSME employers and employees in Gujarat & Maharashtra conducted by Business consulting firm Stratefix Consulting found that:
- Majority of the business owners intend to give their employees a raise, but the level of the raise differed
- On the contrary, in light of the COVID-19 pandemic, employees felt that they deserved a raise for staying loyal to their employers.
Over the past several decades, the MSME sector has been the engine of economic growth in India. For MSMEs to succeed, they need to attract, retain, and develop talent. However, they face many obstacles when it comes to People management because of a lack of resources and a deficient HR management system.
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Over the past two years, small businesses have suffered significant losses and struggled to stay afloat. However, understanding the importance of having the right talent on board:
- 68% of companies are willing to give their employees a salary increase of 7-10%
- 26% of businesspeople are willing to give a 10-12% pay raise
- 6% of employers are prepared to offer more than 12% in salary increases.
- Despite the cash flow crisis, MSME companies intend to give raises around Diwali this year – anticipating a complete recovery.
As a result of the dynamic business environment over the last two years, employees expect pay hikes and rewards for remaining loyal to the company during the tough time of past 2 years. According to the survey:
- 72% of employees expect a salary increase of 10-12%; 28% expect a raise of over 12%.
- If not given a pay increase, 58% of employees will consider switching jobs
- Employees also expect their benefits to be reinstated
Speaking on the findings with Chirag Patel, Co-founder Stratefix Consulting said,” Recruiting, retaining, and developing talent is the biggest challenge for MSMEs. While they understand the importance of investing in talent and expertise, the non-existence of an HR department or robust HR policies puts them on the backfoot.”
He further added “FY’23 will present tremendous opportunities for MSMEs to grow and scale. Businesses and employees were both working hard to stay afloat over the last two years. I strongly urge businesses to consider increasing the compensation of their employees, as good talent is hard to find.”
Stratefix Consulting was established exclusively to assist MSMEs across India. Since inception, the company has helped over 300 MSMEs strategize solutions for growth and scale. The company works as an extended team by studying the situation and identifying gaps, strategizing solutions, and even assists in executing the plan. The company is solely focused on MSMEs in metros and non-metro cities.