Trending in today’s world is the heightened incidence of retrenchment, as government and private sector employers move to reduce expenditure, all in the name of making operations more efficient and sustainable. Workers have become the casualty of this trend as they are thrown off the breadline. The contraction within the job market invariably makes it extremely difficult for those who are retrenched to find new forms of employment.
The options open to those who have become unemployed and who were unemployed but actively looking for work, are but few. What emerges is nothing short of fierce competition for the few available jobs. Those who are not qualified and experienced are forced to compete with those who are academically qualified and have the requisite skills and competencies the job market requires. The fact that they have no working experience is not a matter of concern to employers. This development has, in some instances, changed the employment recruitment and selection policy. This has become a source of contention as some question the application of fairness and equity in the process.
It is unlikely that there will be an ease within the job market competition in the immediate future as the number of unemployed persons continues to swell. Self-employment and embarking on a path of entrepreneurship are both being promoted as the options for most to explore. It boggles the mind as to the extent that this is the prime solution. Given the state of the economy, with the monetary and fiscal challenges, it is envisaged that the average person will encounter some difficulties accessing startup capital to embark on a business venture. The few who are able to get the required start are faced with the difficulty of maintaining the business’ viability. They are confronted with market competition, limited customer support, limitations of purchasing power, and ready access to finances needed to capitalize and invest in the business.
The promotion of small business development is not to be scoffed upon, for it is known that it can be a major revenue earner within any economy. The problem for most entrepreneurs and those self-employed persons is that they commence the journey into the business world with the fear of taking risks. The fear starts with knowing there is no cash to capitalize the business and they have no alternative but to borrow. The absence or lack of other necessary resources and no guaranteed customer base lends to the discomfort that emerges. In an environment where risk taking is not part of the culture, this will not inspire persons to get involved in business ventures.
In an economic environment of grave uncertainty, it seems far-fetched that the average worker who has been placed on the breadline, would undertake to invest in a business venture in a contracting market and where the cost of living is high. It would seem logical that if government and big businesses were looking to reposition themselves in times of an economic crisis, that the time may not be right for entry into the business world, which offers no stability. Entry may be encouraged where the product offerings are unique and have sound business potential to attract investment. This means that before the launch of any new business initiative, much work has to be done. This starts with market research, which comes at a cost.
While it is worthwhile to encourage workers who are thrown on the breadline to invest in business opportunities, they are well advised that partnerships and collaborative ventures should be seen as the best approach. Sharing of the resources will help to mitigate the level of risk.
In the climate of economic hardship, it would be advantageous to those retrenched workers if their former employers would take the lead in engaging them in share ownership programmes of new business ventures. It is easier for a group of companies to take the lead in the capitalization of a project, than to have individual workers commence business initiatives on their own, where there is insecurity, no business reputation to build upon, no established customer base, and not having the means to attract the right employees.
The embracing of a business model that is premised on shared ownership and co-operation has the potential of helping to develop sustainable new business enterprises where the employees are part owners. In this way, they will have a greater understanding and appreciation of the importance of ensuring the success of the business, and as a consequence, place a higher value on productivity, work and business acumen.
DENNIS DE PEIZA
Labour Management Consultant
Regional Management Services Inc.
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