FKE ponders future of labor market

By Steve Umidha

The Federation of Kenya Employers (FKE) could soon announce a flexible working regime if plans by stakeholders in the labor market are reached upon.

Speaking ahead of a high level stakeholder engagement forum, the federation’s Chief executive Jacqueline Mugo says that employers and employees alike will require a high degree of flexibility if they are to navigate the rapidly changing labor market triggered by changes brought by Covid-19 pandemic.

“The Region’s labor force is experiencing change at a rapid pace which will mean increasing demands for more flexibility in how we approach career and business paths. In this context, we will need new, more responsive approaches to successfully support workers and employers to navigate this reality,” said Ms. Mugo ahead of this year’s edition of the Employers’ Annual Conference – slated for 3rd to 4th March in Mombasa.

This comes even as uncertainties continue to linger in the job market following last year’s worrying predictions that Kenya’s labor market would shrink in 2022 on account of the upcoming general elections – but a rebound could follow almost immediately depending on the polls’ outcome.

Projections by the Parliamentary Service Commission (PSC) on medium term alternatives for steady economic growth during the transition period for 2022/2023, showed last year that employers in key industries such as manufacturing, will halt hiring as investors adopt ‘a wait and see’ attitude pending polls outcome.

PSC, while relying on figures from the Kenya National Bureau of Statistics (KNBS), believes that growth in the private sector will remain muted as a result, even though Government consumption will increase significantly in 2022 on election related spending and drought mitigation measures.

Kenya’s unemployment rate, according to KNBS, had been increasing over the past five years with formal wage employment climbing from 2.68 million people in 2016 to 2.93 million workers in 2019 followed by a sharp decline to 2.74 million people seen in 2020 because of the pandemic.

Formal employment in the primary sector, according to KNBS declined from 13.1 percent to 12.3 percent during the same period as was the industry sector share of formal wage employment which also declined from 21.7 percent to 21.0 percent.

In fact, a recent study by the World Bank, Navigating the Pandemic, found that as a result of the pandemic, poverty levels in Kenyan households jumped by 4 percentage points, an equivalent of 2 million additional households that were impacted by Covid-19 leading to sharp decreases in incomes and employment.

The unemployment rate increased sharply in 2020 – during the pandemic’s peak period, approximately doubling to 10.4 percent in the second quarter as measured by the Kenya National Bureau of Statistics (KNBS) 2020 Quarterly Labor Force Survey.

Since the pandemic hit, Kenya’s economy is estimated to have been hit hard by COVID-19, severely affecting incomes and jobs.

Themed, Adapting to the Changing Labor Market’ the conference is expected to gather nearly 500 delegates from across the region in addition to several policy makers, representatives from various governments and top leaders at global labor organizations, such as the International Labour Organization (ILO) and International Organization of Employers (IOE) whose intentions will be to chat a clear path into new and flexible working conditions for workers.