Growing skills mismatch threatens Kenya's economic growth

John Kimani, a third-year economics student at Kenyatta University, is crazy about facts and figures; he has always been. When talking to his friends about an issue, he always looks for the economic spin.

Although he really hopes his passion for economics will be rewarded and he will get a job in the industry, he does not plan to be picky when he graduates in a year’s time.

“Today, it is all about survival. As long as a job pays well, I will go for it,” he says.

But his survival might come at the expense of Kenya’s prosperity.

Each year, our education and training institutions churn out tens of thousands of graduates who end up in careers for which they were not trained. This anomaly, described as a skills mismatch by labour economists, leads to wastage and impedes Kenya’s global competitiveness.

Latest survey

“Every year, about 10,000 students graduate from university. But of these, 7,000 do not have the skills required by the job market, yet we would have already spent millions on them,” said Jacob Omolo, an economics lecturer at Kenyatta University.

Dr Omolo, who specialises in labour relations, played a key role in the development of the latest survey on Kenya’s labour force, the 2010/2011 National Manpower Survey Basic Report (NMS).

But this is not just a Kenyan problem. In an article in The Washington Post, Results for Development (R4D), a non-profit organisation, noted: “A mismatch exists between the demands of the current global marketplace and the skills millions of young people have.”

R4D estimated that by 2030 there will be 3.5 billion people in the global workforce, but one billion of them will not have the necessary skills to find a job.

Omolo added that skills mismatch — a situation where the skills possessed by labour market participants are not the ones required by industry — is a bigger problem than the skills gap, which is where labour market participants have the required skills, just not at the level expected by the industry.

And if this mismatch is not addressed, he said, Kenya’s attainment of the principles of Vision 2030 will be greatly frustrated.

At the employment level, there has been hue and cry about how entry-level employees lack critical attributes, such as communication skills, interpersonal relations and independence. Employees lacking these so-called soft skills have difficulties retaining a job.

But the bigger national problem, Omolo feels, is not that employees cannot hold on to their jobs; it is that they cannot secure jobs because they lack job-specific skills, which is responsible in large part for the country’s high level of unemployment.

According to a report by the Kenya Institute for Public Policy Research and Analysis (Kippra), about three in 10 Kenyans aged 15 to 64 are unemployed.

“To me, the bigger problem that leads to mass unemployment is the skills mismatch. As a country, we appreciate the fact that our human resource is a key ingredient to achieving the level of competitiveness that we are aspiring to,” said Omolo.

The Federation of Kenya Employers (FKE) Executive Director Jacqueline Mugo, in a past article, wrote: “For Kenya to be an industrialised and middle income country as anticipated in Vision 2030, there is need for heavy commitment and investment in skilled manpower.”

Mass unemployment

Not only does the skills mismatch lead to mass unemployment and force employers to incur huge costs in recruitment, with many forced to re-advertise vacancies, it also leads to low productivity and industrial competitiveness.

“And when you talk about the issue of competitiveness, then you are talking about economic growth,” said Omolo.

Felix Otiato, the public relations manager at FKE, said because of labour inadequacies, on a scale of one to 10, Kenya’s productivity is less than two.

In the public sector, the NMS noted skill shortages were reported in the major occupation groups of professionals, technicians and associate professionals; and secretarial, clerical services and related workers.

The shortage was highest in the area of education (at 56.08 per cent), followed by public administration and defence, and compulsory social security.

The private sector reported skills shortages in managerial areas, and technical and support staff.

The shortage was most acute in wholesale and retail trade, and repair of motor vehicles and motorcycles.

Other sections of the private sector that reported skills shortages include finance and insurance, human health and social work.

The NMS partly blamed the skills mismatch on the conversion and/or takeover of middle-level colleges, and technical and vocational education and training (TVET) institutions by universities.

The conversion, noted the NMS, was being done without the matching establishment of vocational training institutes. The result is a reduction in the out-turn of technicians and other middle-level personnel, with Kenya churning out more business managers than scientists..

Yet, according to the survey, the skills that are most in demand in the country are in the major occupation groups of technicians and associated professionals.

This conversion, added Mr Otiato, is worrying given that a majority of secondary school students who score below a C+ find it difficult to get a place in universities.

Post-secondary qualifications

“No nation has achieved technological and socio-political advancement with less than 15 per cent of its qualified citizens having access to tertiary education,” wrote Ms Mugo. She added that Kenya’s rate of 6 per cent post-secondary access compares poorly with Europe’s 35 per cent, and Brazil and South Africa’s 18 per cent and 25 per cent, respectively.

Further, a huge chunk of Kenya’s workforce — more than 80 per cent, according the NMS — lacks tertiary qualifications.

In the public sector, only 7.4 per cent of 357,107 respondents reported having post-secondary certifications. In the private sector, 6.4 per cent of 1,335,040 respondents had them.

Further, for those with tertiary qualifications, most have opted for degrees that meet ‘social demand’, not market demand. This means most people are doing what their peers are doing, or what they think gets greater social attention, instead of taking up courses that would plug existing gaps in the economy.