June 18, 2024
It’s not only important to ensure that micro, small and medium-sized enterprises (MSMEs) have support they need to launch, grow and flourish, but also that the entrepreneurs who own them are encouraged to become registered and comply with the respective country’s regulations, urges the CEO of a regional recruitment firm.
Joseph Boll is CEO of Caribbean Employment Services Inc., a market-leading, fully-digital talent acquisition firm and job board that aims to connect jobseekers in the region with high-quality employment opportunities as well as Hiring Managers and decision-makers in companies both within the Caribbean and abroad.
“MSMEs are one of the biggest employers in the Caribbean, and they contribute a lot to GDP,” says Boll. “But new research suggests that an alarming number of them may be informal, and that poses a huge problem for the employees and owners of these businesses, as well as for the Caribbean economy on the whole.”
For instance, the Dominican Republic recently undertook a National Survey on MSMEs and found that while the more than 450,000 establishments contribute over 30% to GDP collectively, almost 90% of them are unregistered and informal.
Job informality has been on a perilous rise in the Caribbean since the onset of the COVID-19 pandemic. Many experts attribute this trend to the sharp and dramatic decline in tourism that occurred when global travel all but ended completely during the pandemic, wreaking havoc on the Caribbean region’s largest GDP sources. As countless workers lost their livelihoods and scrambled for ways to continue providing for their families, many turned to informal work as a way to keep their heads above the water — and many have not returned to formal employment years later.
Boll notes that many countries have governments or other organizations and initiatives dedicated to supporting MSMEs and helping them to thrive. However, he suggests that close attention be paid to ensure they become fully registered and a part of the formal sector.
“Becoming licensed and registered should not just be seen as an item to tick off the box; it’s important for business owners to protect themselves, their employees and the empire they’ve worked tirelessly to build,” Boll says. “Not getting registered may seem like an easy out or a way to dodge fees, but it leaves you significantly more vulnerable to external shocks like COVID or like extreme weather events, which all signs are suggesting we will see more of. Governments and organizations that support MSMEs should do more to encourage them to become formal, registered establishments to give more people the protections that come with that.”