Kenya’s 2017 Employment Outlook

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2017 is a big year for Kenya and its employment industry. So many things are already happening and many more will be taking place in the course of this year. With our HR in-depth analysis and insights at The Platform101, we have decided to share with you some views on how we expect the year to shape up especially on matters employment.

2017 general elections
This will be the big brother to almost all other factors in 2017. Typical of Kenya’s politics, this year will be marked with more political noises leading to the general election later in the month of August. Our elections history shows a trend of always slowing down the country’s economic growth due to the uncertainties that come with it. Only 2013 was an exception.

Many multinationals and local enterprises will be playing the watch and wait game with very minimal capital injections in their business. Certain government operations may be halted or slowed down as the focus shifts to the plebiscite.

The tourism sector which has been undergoing some remarkable revival is expected to take a beating from the political events as well.

Many other sectors of the economy will definitely be holding their breath. This literally means employment opportunities will arise at a snail pace and only what is considered critical for business operations will be prioritised by many in the country.

Positively albeit temporarily, the political activities will open up the space for social media strategists whose online expertise will be sought after to help influence opinion and try to improve the political profiles for candidates and their parties.

Capped banks’ interest rates 
The impact was almost immediate in 2016 and we expect to see more negative outcomes in form of staff lay-offs in 2017. With suppressed revenue margins resulting from the capped interest rates, banks have opted to part ways with employees.

Some of the banks that have given indications of pending job losses include Consolidated Bank, Standard Chartered, Ecobank and National Bank, which has reopened its early voluntary retirement programme.

The banks chiefs have indicated that the only way for the industry to deal with the challenges facing them is cost management. The other alternatives are long term strategies such as how to better manage liquidity.

We may end up witnessing consolidations and acquisitions of small banks who effectively have been shut out from the interbank market and now have to mobilize funds at higher rates effectively straining their operations

The SME’s and Start-ups environment will also be choked off credit as the banks will prefer loaning to the government where the risk factor is limited. This will result in reduced growth operations in the two sectors thus reduced employment opportunities.

Digitization programs
It’s no doubt the government has been on an overdrive on the digitization program. This has seen most of it’s services available at the click of a button in various online platforms making the services easier, simpler and faster to access.

The digitization has seen a significant reduction in government spend on local media houses through advertisement (traditionally most if not all the digitized services would be conduited to citizens through the local media houses attracting millions of advertising revenues)

The above factor has had a serious impact on most media houses some of which have been on a lay-off frenzy. We expect this trend to continue in 2017 as the fourth estate players seek better ways of running their business without incurring losses.

On the other hand the media houses have also embraced the digital transformation mantra and are shifting most of their operations to digital platforms. This has and will automatically create new ways and wave of doing business that needs less humans.

Royal Media house has already sent home a number of its employees (last quarter of 2016) in what it termed as reorganization precipitated by changes in the broadcasting industry.

Government’s bad blood towards the NGO world
In the last few months we have witnessed growing dissent by the government toward the NGO world citing the later’s interference with government operations and possible plans to politically destabilize the country. Certain NGO’s have been denied their operating rights and their bosses kicked out of Kenya.

With government’s narrative against the NGO world getting stronger by the day, we expect shrinking activities within the later. Some of them have had their funding blocked or rather accounts frozen.

If this persists, then definitely the NGO workforce in Kenya will be adversely affected in 2017 and possibly beyond. There will be less funding, less activities, less employment and where funding levels get critically low, then lay-offs will be inevitable.

On a more general perspective, we expect a more cautious approach in doing business by all sectors and organizations. Cash flow will be a key concern and credit managers will be hard pressed to ensure less and less realized revenues reside with the debtors.

There will be reduced business transactions with slow paying/poor paying but much needed clients like the government especially by the professional services firms. Internal cash management will be thematic with the top leadership and obviously staff promotions and related salary increases will be extremely calculated in 2017. HR teams will be hard pressed to justify every unit of increased staff costs.

A peaceful election, lifting of the interest capping bill and a change of government’s attitude towards certain sectors of the economy and the non-governmental organizations, will drastically set the country’s economic growth and employment prospects on a positive trend in 2017.

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