How low labour productivity pricks Kenya’s growth bubble

By WINSLEY MASESE

Getting the best out of a talented employee is a great asset to enhance business growth and profitability.

Besides, encouraging and motivating an average workforce to put their best foot forward is the fulcrum that has seen companies and governments achieve phenomenal growth and improved service delivery.

With Kenya’s low labour productivity stagnating at 2.2, out of a score of 10, achieving a middle-income economy as stipulated in Vision 20130 might be a hard nut to crack.

“Though Kenyans are among the most skilled and educated in the region, their negative attitude and perception towards work remain the greatest challenge to realising improved growth,” said Jacqueline Mugo, the Federation of Kenya Employers (FKE) Chief Executive.

She says failure to have a committed workforce is a major challenge that can put a break to the country’s long-term development plans.

Samson Osero, the executive director at the Institute of Human Resource Management (IHRM) agrees that Kenya’s low labour productivity revolves around work ethics.

“This goes to an extent that workers do not observe time and even after reporting late, they see nothing wrong in it,” he said. Though time, Osero says, is part of the production process, observing punctuality to a greater extent does not mean anything to them. For example, Osero noted that often times, meetings start late in Kenya because people arrive late.

“In Japan, which has the highest labour productivity rate, if they agree to meet at 10am, they will arrive 15 minutes to the scheduled time so that by the agreed time, they will kick off their business,” Osero stated.

Salary increase

During a workshop held in Nairobi last week, Labour Cabinet Secretary Kazungu Kambi noted that whereas Kenya has economic potential, the required manpower and the political goodwill, its low and poor productivity performance is a major concern.

Kambi concurred with Mugo that the citizen’s mind-set, culture and attitude in all activities they engage in have bogged down Kenya’s economic growth projections.

Amid numerous employee unrests for increased salaries, lack of data for informed decisions on any salary increase that is commensurate with their productivity throws the scenario into a mix. “In most cases, demand for increased pay is dictated by inflation,” observed Mugo.

 During the seminar, Kambi challenged employers and the unions to seriously consider negotiating salaries while at the same time focusing on and factoring productivity. This, he observed, will help in pegging wages on the productivity of the employees.

The rising wage bill, Mugo notes, is one critical area that needs to be looked at as continuous demand for higher wages will have a push up effect on the economy.  “In Kenya, we must raise our labour productivity index from the current 2.2 to above 4.0 if we are to achieve a middle income status as stipulated in the Vision 2030 blue print,” Kambi advised.

He noted that vibrant productivity improvement programmes should be adopted to equip workers with skills that enhance productivity among other initiatives such as reducing wastage in all sectors and adequate use of scarce resources.

“The uptake of productivity practices especially in industries will result in reduced wastage of resources and higher productivity leading to more profitability and expansion of activities,” noted Kambi. Globally, Japan, the third largest economy has the highest labour productivity, at 7.6. According to the Japan International Cooperation Agency (Jica), an increase in productivity improves the standard of living of people in a given economy.

Takesh Fujita, from Japan Productivity Centre and a Jica expert observed that increased GDP is the main indicator of a country’s wealth and prosperity.

“The potential, the resources and infrastructure are there and how to apply them in their minds for improved performance is the challenge,” she argued.

She advised against discrimination at the workplace on matters touching on promotion and salary increment as this might have a direct bearing on a worker’s productivity. However, Osero warns: “Inequitable practices in compensating employees kill morale.”

In some cases, Osero says there is no compensation for work done that matches what is competitively in the market.

Mismatch of skills

Besides, distorted salary scales dampens the creativity of other employees and consequently affects the company’s ability to create more jobs and wealth for society.

Organisations, Osero advises, must ensure that workers are adequately compensated and the bonus given motivates them to achieve greater results. In some cases, employee recognition plays the trick in igniting the creativity of employees to strive for the same. With a job market where there is a mismatch of skills, Mugo underscored the need to project on the future of career needs and offer the necessary training.

“Even more alarming is the fact that continuous improvement at the work place is not emphasised and even after achieving a higher target a particular month, many do not bother how to improve from there,” Osero noted. Mugo regrets that a lack of assessment on labour productivity done has seen no planning done to ensure the gaps are filled in future.

“There must be a forecast of the skills to be needed in the future and align trainings to meet the demands,” said Mugo. In Japan for example, Osero said that before one starts to work, he or she has to clear the desk. A cluttered desk, he argued, is an element of poor working systems and a demonstration of work not finished.

One way to achieve improved productivity, he said, is through setting new targets on a daily or monthly basis by putting in place systems and processes to achieve that.