Kuldip Maity

A few days back, I was reading about reward systems. Selecting the right rewards for employees has always been an issue in human resource management. Many organizations cannot identify the rewards which are best to foster job satisfaction.

After pondering for some time, I felt the issues highlighted also apply in areas of right placement or career option.

For example, while it is tempting to promote a high-performing salesperson to a managerial role, one cannot be sure that the salesperson will be the same enthusiastic team member that he was before the promotion. The promoted salesperson could miss the adrenaline rush that used to come from being on the road and meeting new customers once he has to manage a team and push the members to do the same job regularly.

A similar logic applies to those seeking employment in other companies and aspiring entrepreneurs. Many decide to move from high-paying salaried roles to a start-up. Sometimes, brilliant innovators chose to work for a company rather than start their own.

A similar story is that of Neetu Sharma. She had been working in the packaging department of a pharma company earning a fixed monthly pay-out, plus overtime. Her husband, a driver, and their daughter are also employed. Her son is still in school, studying in Class 10. In effect, three of the four members of the family were employed, with fixed salaries, which is an achievement for those living at the bottom of the financial pyramid in rural India.

But Neetu was not content. She wanted to start her own business—a business where she could make her own decisions and her hard work would directly impact her growth. For this, she was ready to deal with the uncertainty of a business income.

She rented a shopping space and started selling groceries, household supplies and personal care products. When she approached Village Financial Services for a loan, we helped her with a business plan and provided the capital.

When we talk to Neetu today, she expresses a level of satisfaction that is contagious, even to us. She has found the right placement: not as an employee, but as an entrepreneur.

The principles of human resource management seem applicable to a broader spectrum. It is up to us to find ways of enhancing our satisfaction with our job and work environment. At regular intervals, it is extremely important to look at our roles from a distance to get a fresh perspective on what we are doing and the level of satisfaction we enjoy. Research has proven that there is a significant and positive relationship between job satisfaction and success. Those satisfied with their roles will end up with higher self-esteem, increased confidence, and greater willingness to take on new challenges and create an environment where they can influence others.

Micro, small and medium enterprises (MSMEs), at least the ones that rely on microfinance to take them out of financial distress, have a low level of literacy. While our women customers work hard to ensure that their next generation gets a formal education, their formal education was usually cut short.

This translates to a low level of awareness about the compliance measures that they must follow to grow. They cannot employ consultants to understand compliance or make sense of the legalese in the rules. But, if they wish to tap the many incentives that can boost their business, they have to adhere to the compliance norms laid down for the organized sector.

Often, big companies do not enlist businesses that are not compliant with the rules of the Union or state governments. This slows the growth of an MSME that is not compliant, as they have to sell through a trading agency that adds no value but for compliance adherence. To cut off this layer would mean extra gross profit for the SME, which can then be used for further growth.

Parbati Devi Ghosh of Naihati, West Bengal, realized this quite early. She makes plastic bottle caps used in the packaging of homoeopathic and ayurvedic medicines but could not deal with the pharmaceutical companies because she had no idea of compliance issues. She had to deal with a local trading agency. Her husband worked in a jute mill but it shut down during the COVID19 lockdown, leaving him without any income.

Parbati knew that the profit that she was sharing with the trader could help her ease the financial stress on the business and personal fronts. But she had no idea how to cut out the trader and she could not afford a consultant.

Then her son became the light at the end of the tunnel. When he cleared his higher secondary education, Parbati introduced him into the business and handed over the operations to him. Her son repaid her efforts in getting him a decent education as he showed that even a high school graduate is better than complete illiteracy. The business grew and now Parbati delivers the moulded bottle caps to the small pharmaceutical companies without a trader or middleman. Her gross profit has gone up and she has been able to install new machinery. With six moulding machines, she needed operators. She now has four workers.

Parbati’s success validates the hypothesis that compliance is a great influencer in the growth of a business. But not all MSME owners have the luxury of having an educated person in the family. While we have been seeing several measures taken to simplify the rules, there is still scope for more reforms to rationalize the compliance needs of MSMEs. While I am no expert in all compliance requirements by the different departments of the Centre and state, somehow, I get the feeling that the balance between the need for compliance and the overhead it adds to an MSME could be normalized further.

One of the pleasures of working in microfinance is that we get to interact with those who are close to our culture and heritage. Many borrowers in VFS have got into business to keep our rich heritage alive. There are numerous gems that we can unearth from our past that can put India at the peak of the world.

One of such gems is Muga silk. Muga has always been popular in the garment industry because of its quality. It is said that the shine of the fabric improves after each wash which helps the product last a lifetime, making Muga one of the costliest silks in the world.

Sericulture is an ancient practice in Assam and finds mention in the Ramayana. However, evidence of organised Muga silk production goes back to the Ahom dynasty, when the rulers of Chutiya offered the golden fabric as a peace offering to the Ahoms, after which the Ahom kings not only started wearing only Muga silk but also proudly presented it to royal visitors as one of the finest local offerings. Muga production thrived, quickly becoming an integral part of the social and economic lives of the locals.

Muga silk is mainly produced in Assam from silkworms, Antheraea Assamensis, which are fed the leaves of Som and Soalu plants. Muga silk secured the GI or geographical indication tag in 2007.

We learnt that a silk farmer needs at least 2.5-3 acres of land to get about 1,000 grams of Muga silk at a go, which is roughly what is required to weave a single saree. That would mean that one saree would be made from roughly 8,000 silkworm cocoons. The time taken to weave a Muga silk saree is roughly two months, from rearing the silkworm to obtaining the finished product. The weaving process takes approximately a week to complete.

Rina Boro of Barghopa, Assam, is a microfinance customer of Village Financial Services who weaves Muga mekhela chador and sarees. She was already a trained weaver who approached us with the dream of setting up her unit. She had a defined plan of setting up three weaving machines at one go. “It is not possible for me to grow alone. I need to employ others as well,” was her vision when she discussed her plans with us.

Needless to say, just like most women entrepreneurs of VFS, she also had to devote time to her family—her mother-in-law, husband and two children. Three years into her association with us, Rina Boro, lives in her own house and has also purchased a motorcycle for her husband.

We are sure that Muga silk will remain a classic item that every person desires to own, not only in the Indian community but beyond. The fabric has a global appeal, especially in Japan where designers use it to make kimonos and other traditional Japanese dresses.

We are also sure that VFS will keep contributing to ensure that the global footprint of such treasures of the Indian heritage spreads through the dedicated efforts of its customers.

Living in a green environment should be every human being’s basic right. We should not be forced to survive in a polluted environment. The air that we breathe, the water that we drink, or the food that we eat should all be pure and fresh. Without this, we are looking at a serious degradation of lifespan and living conditions.

Till we started talking about the circular economy, we had always looked at business and the environment as having conflicting interests. But, if we look closely at the unorganised sector, we have had similar businesses running for a long time.

What is amusing is that these businesses, which were looked down upon, are slowly becoming the topic in forums trying to raise awareness about reusing products, or extracting new resources from them, rather than scrapping them. The rational world feels that all forms of waste, whether old clothes, scrap metals, obsolete electronics, or plastics, are to be returned to the economy or used more efficiently.

Our customer from Garifa village in North 24 Parganas has been in the business of buying such waste products and scrap. Khodija Bibi, along with her husband, collects recyclable waste from the local streets, jetties and small businesses and sorts them into categories before selling them to local vendors, who supply them to the respective industries.

Running this business for the last 20 years, Khodija and her husband own the yard where all the scrap is collected, sorted, and packaged for distribution. They seemed to be quite content with the earnings from the business and want to grow in the same line of business. Their son has also decided to join their business.

Do they realise that they are doing the environment a big favour through their enterprise? I do not think they have thought along those lines.

Environmentally and economically, recycling is an extremely effective way of driving consciousness in our society. Metals such as steel, iron, aluminium, and copper can be recycled many times because their metallic properties do not deteriorate with repeated melting and casting. While this is not always the case with plastic and glass, recycling can still help us minimise the negative impact on the environment.

We should have strict guidelines on how we manage our resources, what we make, how we use those products, and what we do with the materials afterwards. Businesses like Khodija Bibi’s need to be incentivised so that more budding entrepreneurs get into them and contribute to the circular economy.

Continuing the discussion on gender equality, let us focus on labour force participation. According to available data, the participation of women in the workforce in India is 20.3 per cent. The share comes down to 18.2 per cent if we look at urban India. Meanwhile, women’s employability rate is expected to be 51.44 per cent in 2022, an increase over the figure of 41.25 per cent in 2021.

These numbers are hardly surprising because the FLFPR or Female Labour Force Participation Rate has been declining steadily over the last three decades.

If we have to change the trend for the better, it will need a multipronged approach. While policies and initiatives are being taken to help women acquire and improve various skills, it might not be enough to increase their participation. Or else the numbers for urban India—where access to skill-training is easier—would have been higher than that for the rural sector.

It will need a broader consensus and a focus on inclusiveness.

MSMEs or micro, small and medium enterprises, will continue to play a big role in this. As we know, MSMEs contribute to 30 per cent of the country’s GDP with a substantial penetration in the rural segment. The sector’s contribution adds up to 45% of our manufacturing output.

Village Financial Services and other microfinance companies fund MSMEs run by women. They also have the mandate of empowering women, so they are always working to improve the awareness and skills of rural women.

Financial literacy helps rural women appreciate the options available to them and their role in the labour force. It also helps generate direct and indirect employment, a major part of them being women.

An interesting case is Aleya Bibi of Barasta village in West Bengal’s South 24 Parganas district. A mother of three, Aleya came to know of a business opportunity: wholesale traders were farming out the manufacture of shirts to local businesses.

Aleya was not sure if she could manage her household of five and run a business at the same time. She was over 45 years old.

But her family encouraged her and VFS staff guided her. She set up the business three years ago.

Regular grooming in entrepreneurship helped her understand how to manage her finances. She learnt that if she wants to grow, she must put the profits back in the business and not withdraw them.

That’s how she could add a sewing machine to her workshop and now boasts of employing a local workforce.

Living in her own house Aleya now aspires to go direct to the brands for orders. If she can eliminate one link in the supply chain, her margins will increase and so will her business.

Entrepreneurs like Aleya are not only examples of women in the workforce, but they also help more women join the workforce. The ripple effect of entrepreneurship may be one of the best methods to increase FLFPR.