MECHANISMS FOR IDENTIFYING AND EFFECTIVELY USING LABOR PRODUCTIVITY RESERVES IN SMALL BUSINESS ENTERPRISES

Abstract

Labor productivity remains one of the most reliable indicators of a firm’s competitiveness, yet small business enterprises consistently realize only a fraction of their productive potential. This article examines the mechanisms through which small firms can identify hidden labor productivity reserves and convert them into measurable results. Drawing on a systematic review of the literature, a comparative analysis of management practice, and secondary statistical data, the study distinguishes diagnostic mechanisms that make reserves visible — working-time analysis, factor decomposition, benchmarking, and a system of key performance indicators — from mobilization mechanisms that activate them, including incentive design, lean and continuous-improvement methods, investment in skills and multi-functionality, selective digitalization, and the reorganization of work. The analysis shows that, unlike in large enterprises, the reserves of small firms lie less in capital-intensive technological change and more in work organization, motivation, and the quality of managerial attention. An integrated strategic cycle is proposed that treats the identification and mobilization of reserves as a single, continuous management process. The findings are applicable to entrepreneurs, advisory institutions, and policymakers, particularly in emerging economies where this sector carries a growing share of employment.