By Augustine Omilo
Given its roles in the pursuit of national wealth and economic development, Small and Medium Enterprises, SMEs are fast taking their rightful positions in debates concerning the growth of economies around the world. Developing countries, including Nigeria tend to have a larger share of this category of enterprises, going by their general definitions. Although they create more jobs than large firms, SMEs also suffer the majority of job losses and stability therefrom due to many factors.
In Nigeria, SMEs play a crucial role in the country’s economic development agenda, serving as a driving force for employment and poverty reduction. A Federal Office of Statistics study shows that 97% of all businesses in Nigeria employ less than 100 employees each, implying that 97% of all companies in the country are “small businesses”. It is estimated that SME sector provides an average of 50% of Nigeria’s employment and 50% of its industrial output also.
However, despite the great roles SMEs play in the Nigerian economy, they are presently faced with myriad of challenges that range from staff dishonesty, instability in staff retention, the quest for easy wealth among the youths, general decadence in the nation’s value system, and new-found vocations such as ‘hook up’ (Sex workers) and ‘yahoo plus’ amongst others.
Many young people now prefer to live lives of fantasy, building castles in the air. From a chat with employers and employees in the small businesses sector of the Nigerian economy, there is no iota of doubt that the country’s informal sector is experiencing a worsening scenario of enterprises not surviving beyond the life span of their founders.
The Public Relations Manager and Personal Assistant to the CEO of Viminlan Hotels and Resort in Marble Hill area of Okpanam Delta State, Mr. Azikiwe Ogochukwu Roland Shared his views on the difficulties faced by managers in Small and Medium Enterprises, SMEs, attributing the challenge to reasons that have to do with the high propensity of today’s young people to be easily swayed into fraudulent practices in their attempts to get-rich-quick.
He holds the view that, this set of people can go to any length to pilfer on items and monies in their care. In his words; “management frowns at matters such as this. So when these people are apprehended, we are often left with no other options than to fire them”.
He further explained that sacked personnel in the hospitality industry often hide their labour relations status from family members and friends, creating the impression that they left office voluntarily. He added that, this is why some of them would leave one hotel and still find jobs in the industry but outside their previous locations.
Continuing, he stated that, other reasons for the high labour turnover in the hospitality industry include what employees see as poor conditions of service. “Some of them are easily carried away by ostentatious life styles of some hotel lodgers who are equally young. They see these fellows as role models. They quit their job sometimes without notice in order to go on the path of business activities of their discovered role models”.
As for the ladies, Azikiwe said, some of them genuinely resign to go into other areas of human endeavors, such as petty trading or other more lucrative paid jobs, while many go into prostitution that assures them of high yields that guarantee them the earning of their one-month salary or more in one day.
To rid the industry of criminally-minded personnel, Azikiwe suggests that, hotel managers must work in synergy with a view to ensuring that whoever leaves his job as a result of bad conduct is barred from being employed in any organization within the industry.
Backing the view of Azikiwe, the Managing Partner of Jones Oriohu and Associates, a firm of Chartered Accountants and Management Consulting based at Ikeja, Lagos state, Jones Oriohu adds that the worst hit in the hospitality industry are those that run small restaurant businesses.
According to him, it is now rare to visit these Eateries and meet attendants or sales personnel in such places for more than three months. “You keep meeting new faces”, he said further.
Continuing, Oriohu pointed out that, in the time past, his firm used to recruit low level manpower for some clients, but lamented that things have changed. He said; “today if you put up a job vacancy advertisement, most people will come to find out what the salary would be before applying, even when they know that they are supposed to go through competitive selection tests”.
He suggested that the governments at different levels can do something about poor remunerations in the informal sector by augmenting the salaries paid by employers with specified minimum number of workers through social investment strategies.
Christiana Okwes is the CEO of Christvany Digital Print, located at the popular Konwea plaza in Asaba, Delta state.
According to her; “We are a full-fledged printing press. We do large format printing, plastic Identity cards, T-shirt branding, book printing and publishing among others. The business is lucrative but very tasking. We spend about N450,000 monthly on fuel to power our generating set”.
She said, the biggest challenge faced by her business is the unavailability of young people who are willing to work as computer and other machine operators. According to her, even when they choose to employ trainees with the hope that they stay back for a reasonable length of time, the workers still disappear after a few months.
She attributes this attitude to the trending business of ‘hook up’ among ladies and ‘button pressing’ among the young boys. She said, her company even applied to the National Youth Service Corps, NYSC some years ago for personnel but could not meet one of the conditions requiring companies in need of corps members to provide them with free accommodation.
However, she said, she has since taken solace in the fact that her children and relations are now readily available to help her out after their training on the job. For her, the Nigerian youth, especially the girl-child must understand that all that glitters are not gold, and jumping from one bed to another can only offer momentary economic socour at very great risks.
She counsels the youth to be patient and equip themselves with enduring skills that can be acquired from school or workplaces like Chritvany Digital Prints. In her words; “I was once a trainee. I worked in business centres many years ago before veering off to found my own firm. We have some of the best modern printing machines in vogue today. I may not be rich but I am not hungry. I have two children in the University and other siblings that I take care of”.
Another respondent, Mrs. Deborah Onwuka is an Insurance Sales Executive with SanLan Aliaz Insurance Company Limited (formerly First Bank Insurance) based in Asaba, Delta state.
She said, she could not speak for the Insurance industry but affirmed that recruiting sales personnel in the sector could be worrisome. According to her, many young people are not willing to take up challenging jobs that offer commissions instead of salaries because of the challenges of convincing clients to accept products or services they are not used to, especially insurance policies.
But she quickly added that, she enjoys her job because it brings out the best in her as far as business negotiations are concerned. She adds: “There are many millionaires in the US who became stupendously rich through insurance marketing and sales”.
Onwuka adds that, things will get better in the Insurance subsector when citizens become more educated about the importance of insurance policies and adequate training is provided for Insurance sales workforce. She notes that, if properly promoted by government, with the enabling laws, the industry has the potentials to become more attractive to work in banks and the civil service.
However, more pathetic is the case of Mr. Nguzor Ikechukwu Lordson, the CEO of Kesmarin Ventures, a furniture making outfit. He said he had two workshops – one in Lagos and another in Asaba, but had to close the Lagos office due to lack of competent staff to man the place.
Nguzor adds that, even in Asaba, he has neither staff nor apprentice to assist him. Continuing, he disclosed that he is not the only one facing staff retention challenge in the profession as many of them (business owners in the field) now operate in partnership with each other.
According to him; “My specialized areas are kitchen cabinet construction, Wardrobe making, fancy doors and the likes. The last time I had a chance to furnish a hotel in Asaba with Wardrobes and kitchen cabinets, I had to invite a few of my colleagues who were not busy at the time, along with some unskilled hands and paid them on daily basis for the period the job lasted. And that is how some of them also invite me when they have jobs that need more hands”.
He said, other challenges faced by entrepreneurs in this category include clients’ unwillingness to pay good money for high quality jobs, adding that some even go to the extent of suggesting that they buy materials for them (professionals). He angrily asked, ‘these people, do they go to buy cake baking materials for caterers when they want to celebrate their birthdays? Or do they buy printing papers for their external auditors?’
He, therefore, cautioned that, if nothing is done by orientation agencies of government to change the mind set of Nigerians with regards to respect for dignity of labour, many more people will be shying away from engaging in services in the informal sector, especially technicians.
In Benin-city, Edo State, Deacon Collins Nwagbogun was running a fast food outlet – Collins Rehoboth Foods around the By-pass area of the city. He had to close the business due to difficulties in recruiting sincere, dedicated staff.
He says, many workers are not ready to work and the few that endure often get involved in pilfering company properties, including the ones for sale. He adds that many of them can go to any length to compromise the quality of company’s products by converting monies meant for purchasing materials to personal use.
He holds the view that, other challenges like high cost of production, arising from poor electricity supply and high cost of transport can be transferred to customers, but that, that of staffing is a deadly cancer in any business.
However, as the debate on the sustainability of SMEs in Nigeria continue, governments at all levels must continue to do all they can to ensure that these outfits do not get frustrated out of existence at the present rate. If companies and brands like Guinness, Coca-Cola and PZ, founded by small business owners over one hundred years ago can continue to thrive beyond their countries of origin, there are no reasons for SMEs in Nigeria to continue to collapse like pack of cards, he said.
And, for yet another SME’s operator and CEO of Pathway Group of Companies in Asaba, Mr. Victor Ucheka said, “Yes, in truth, there’s no sector in this country where you won’t face challenges. Even you, as a journalist, you have your challenges.
But our first big challenge is human capital; finding people who are genuinely ready to work.
A lot of our businesses are female-centred. Women tend to do better in marketing, especially in real estate. But right now, it’s hard to find such women because of the increase in “hook-up” (sex work) culture.
Many women would rather do ‘hook-up’ than work. We had an example recently. A former Commissioner of Education, whose son is my friend called me about two or three months ago. He wanted me to help someone, a young woman to get a job in my company. I agreed because of him.
Normally, most of our workers are paid by commission; you sell a property, you get your commission. But I said, because of him, I’d put her on a salary for three months while she learns. She knew nothing about real estate, but we interviewed her, took her details, and started. For about twenty-something days in the month, the girl didn’t show up. When we called, she’d say, “I’m doing my market rounds, meeting people, sharing flyers.”
But if you’re working for a company, you come in the morning, meet with the team, and then go out to market. Then you come back and give feedback, especially since you’re on a salary.
But she just stayed away. At the end of the month, we still paid her. After that, she disappeared. We never saw her again”.
