A new survey revealing trends in Kenya’s labour market has revealed that one in four companies have laid off permanent employees this year, and only one in 10 firms have added new permanent jobs.
At the same time, while only 13 percent of companies have hired new casual workers this year, close to half (42 percent) of firms have fired casuals amid tough economic times, according to a survey by the Central Bank of Kenya (CBK).
In its first assessment of hiring and firing of different categories of employees by companies since January, the CBK in its September Market Perceptions Survey notes that the number of firms that have retrenched workers this year is more than double those that have recruited.
The survey shows that while more companies were firing workers, the banking sector witnessed growth as lenders opened new branches in an expansion drive.
“Respondents were asked how the number of permanent, contract, and casual employees in their firms compare with those in a similar period in 2023.
“The responses showed that 59 percent of banks have hired new permanent staff in 2024 compared with only 10 percent of non-banks. At the same time, 25 percent of non-bank companies have so far laid off permanent staff in 2024 compared with only four percent of banks,” the survey notes.
The CBK notes that 39 percent of banks have hired new contract workers this year and the same number have retained the contract staff they had last year.
About 23 percent of banks said they dismissed contract workers this year.
On the other hand, 31 percent of companies in the general economy have fired contract workers on their payrolls this year, while 17 percent of the firms have added new contract positions compared to last year, notes the CBK survey.
“Banks have largely retained the numbers of casual employees they had in 2023, whereas non-banks have significantly reduced the numbers of casual employees. The survey findings therefore show that non-banks have employed less and laid off more in 2024 compared with banks,” the survey states.
It shows that 83 percent of banks have retained the casual staff they had last year, and 13 percent hired new workers. Four percent of banks made casuals redundant.
This is in stark contrast to the general economy, where 42 percent of companies fired casuals, with only 13 percent hiring new workers. Less than half (45 percent) of the companies maintained the number of casual workers they had in 2023.
Overall, the survey noted that 76 percent of banks and 38 percent of firms in other sectors of the economy expect to hire more employees in 2024 compared with those they had in 2023.
“Banks largely expect to hire more in 2024 to support continued branch expansion and growth in business, launch of new products, and to replace exiting staff,” the survey stated.
“Non-banks expected the high cost of production, high overheads, low-profit margins, low business, reduced income, high cost of operations, business uncertainty, and the need to hold down costs with the reduced demand in the market to affect new hires in 2024,” it added.
