Community Network-based Hiring of Workers: Model Adopted by Unorganized Retail Enterprises in India.
| Date | 01 July 2021 |
| Author | Borkar, Aman |
Indian Retail Characteristics
"Retail is a labor (1)-intensive economic activity and front-line workers are a vital link between the employer and the customers" (Borkar & Paul, 2015: 517). Labor market is a versatile entity. The Indian Labor market (2) can be broadly divided into organized and unorganized sector (3) based on the models of sectoral dualism (Mehta, 1985). In India, the share of the organized sector is estimated at 7-9 per cent while the rest is unorganized (Ministry of Labor and Employment, 2018-19). In India, total employment in organized (around 80-90 million workers) and unorganized (around 390-420 million workers) sectors consist of 509.3 million workers (Ministry of Labor and Employment, 2018-19; National Sample Survey Organization, 2011- 12). However, due to the amorphous nature of the unorganized sector, statistical accuracy of the labor force is difficult to capture (Pillai, 1996).
According to one estimate, the Indian retail sector has more than 13 million outlets providing employment to over 18 million people (Singh & Tripathi, 2008) with the highest outlet density (Sarma, 2007) worldwide. "Organized and unorganized retail enterprises are easily distinguishable in terms of enterprise type, format, turnover, operations, working conditions, compensation" (Borkar & Paul, 2015: 517) and social security benefits provided to the workers (Ministry of Labor and Employment, 2010). In developing countries like India, workers are more exposed to high levels of uncertainty and risks (ILO, 2004) due to socio cultural differences, work availability imperfect labor market and low wages (Ministry of Labor and Employment, 2010). Besides, scholars like Bino et. al. (2008) and Thorat (2008) identify Indian society as highly divided by caste (4), gender, region and religious groups and continuation of discrimination in newer forms.
"The Indian retail sector is heavily weighted towards unorganized retailing" (Borkar & Paul, 2015: 519). The unorganized retail sector exhibits characteristics such as lack of labor law coverage; non-conducive workplace culture; long working hours; abusive treatment (manhandling); irregular income; prevalence of piece wages; seasonal and temporary nature of occupation; high labor mobility; dispersed operations; casualization of labor; lack of enterprise support; low bargaining power; ease of entry; reliance on indigenous sources; family ownership of enterprises; skills acquired outside formal education system; lack of substantive safeguards in terms of wages, jobs, health and safety measures or social security benefits (e.g. paid leaves, pension, bonus, medical support and health insurance, maternity leave benefits, compensation against accident, etc.) all of which make it vulnerable to socio-economic hardships' (Social Security Division, 2010; Mehta, 1985; fielddata). Unorganized retail enterprises are private enterprises owned by individuals or households engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than ten total workers" (NCEUS as cited in Bino et. al., 2008).
On the basis of the 66th round of the National Sample Survey, Borkar and Paul (2015) point out that 96.8 per cent workers in the retail sector in urban India are employed in the unorganized enterprises while the rest are in organized enterprises. The majority of workers (44 per cent) work in food, beverages and tobacco products, around 14 per cent in textiles, clothing and leather, and the rest 42 per cent in other economic activities. Wages also vary across economic activities such as the median weekly wage ranges between $10 and $100. They also mention that 45 per cent of retail workers fall into the 15-35 age group while the remaining belongs to 35-50 age group. Further, around 18 per cent are either illiterate or literate while 20 per cent have attained middle level education, 20 per cent and 16 per cent have attended secondary and senior secondary, 12 per cent and 3 per cent are graduates and postgraduates, respectively. They also stated that 77 per cent of the workers belong to the Hindu religion. It has been noted that 89 per cent of males and just 11 per cent of females are working in Indian retail. Thus, Indian retail sector can be considered as male dominated sector, however, there is an emergence of a new hybrid model called as 'Independent Store Services' which prefers women workers to males.
Recruitment & Employment Characteristics
Substantial literature is available on large organized retail firms' recruitment process and the extent to which employers are likely to adopt systematic and proactive searches for new recruits. "In contrast, very little material is available for small unorganized retail firms" (Carroll et. al., 1999: 236). Bratton and Gold (2003: 488) defined recruitment as "the process of generating a pool of capable people to apply for employment to an organization". Employees can be recruited either within a firm (internally) or from the labor market (externally). While there are advantages to both forms of recruitment, most firms use both approaches; that is, they "make and buy their human capital" (Lepak & Snell, 1999: 32).
In the unorganized retail enterprises, the recruitment of workers is carried out in a number of ways, such as direct recruitment; recommendations and referrals by existing employees and other employers (Borkar & Paul, 2015); employer's personal contacts (Breman, 1976); and agents in the native place of the employers. The present paper focuses exclusively on the recruitment model embraced by the unorganized retail enterprises based in Mumbai by their agents in the native place of the employer. The model works only for workers who belong to the same community as the employer. In the analysis section, we present the model in detail.
Benefits of Hiring Ethical Individuals: They are more value oriented, they save the firm money by being less likely to cheat or engage in the questionable actions under the guise of helping the company. They have a broader sense of responsibility; they increase a retention rate and promote a work environment of high positive morale. Recruitment in unorganized retail enterprises poses a number of challenges for both employers and workers. It is challenging for employers to hire well-educated and high-level IQ workers who fit the role proposed in the enterprise. In...
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