The future does not look bright, but we must remain optimistic

The labour market crisis is far from over and the Kenyan mood remains bleak. According to CCI, a Consumer Index, Kenyans haven’t been this worried about the economy since the first half of 2020 when the coronavirus pandemic plunged the country into isolation and recession.

Employment growth is expected to stagnate up to 2023 due to losses incurred during the pandemic. Projections by the International Labour Organisation have further underscored the dangers of increased geographic and demographic inequality, rising poverty and fewer decent jobs.

Growth in wage and employment elasticity has declined too. The crisis has made pre-existing inequalities worse by hitting vulnerable workers harder. Similarly, employment disruptions and business closures have had catastrophic consequences on family incomes and thousands of livelihoods. This has led to a rise in informal employment which now constitutes 83.6 per cent of Kenya’s total workforce, according to Kenya National Bureau of Statistics.

The prevailing crisis has also hit women disproportionately, with many of them edged out of the labour market before being rendered inactive. Their employment has declined by 5 per cent compared to 3.9 per cent for men. The youth have not been spared either as gender gaps continue to be identified in their labour markets. This is revealed by a survey dubbed, ‘Update on the youth labour impact on the Covid-19 crisis’.

Given the numerous challenges confronting the labour market, substantial job-hopping by employees has been reported. This is also in view of the myriad distressing circumstances which include employee retention, financial insecurities or lack of stable employment.

A major setback, stirred up by multiple disruptions in the production and supply networks, has also been witnessed throughout the year, hampering economic growth besides triggering a shortage of inputs, products, services, credit and liquidity constraints.

In a strange twist, the pandemic has accelerated the need to reinvent ways of working. In addition, it has compelled employers to rapidly change their operation models, expanding remote work and digital collaboration amid social distancing guidelines.

This particular shift has been positive in some ways, revealing that many aspects of work taken for granted such as daily commutes and traditional meetings can, as a matter of fact, be adjusted.

Still, some downsides, including limited communication networks, have been evident. An average employee can now only collaborate with fewer people compared to the pre-pandemic times. This goes on to demonstrate the critical role that awaits the employer towards developing new working models that seek to address the downsides of remote collaboration without fully reverting to the pre-pandemic norms.

Further, unlike in previous times, many employees were last year unable to negotiate or re-negotiate their bargained contracts as most employers are yet to recover from the economic meltdown. Unions on the other hand have remained steadfast in fighting for the intrinsic rights of the working population and are determined to reinstate the balance of economic power via collective bargaining agreements.

Many employers are facing huge constraints that constantly threaten their existence. Generating a stable income for employees and new employment opportunities for job seekers has equally been challenging.

To create jobs and accelerate economic recovery, different governments have so far rolled out incentives that target labour-intensive sectors. For instance, Rwanda unveiled an additional Rwf350 million stimulus plan for its economy to support ailing businesses, boost jobs and reduce poverty.

In Kenya, various tax intervention measures were introduced but abolished prematurely before the real effects could be felt at the enterprise level. Other states like Uganda, Nigeria and Burundi introduced numerous health, social and economic policies that are commensurate with the magnitude of the Covid-19 effects on their employers and citizens.

2021 may not have lived up to our hopes and expectations but we should be optimistic this year.

We should be optimistic that the unemployment rate will drop, that the challenges which have plagued the workforce will be addressed and that our punctured economy will recover. In the end, the much-needed confidence will be restored in our labour market.

Let us hope that 2022 will fulfil your wishes and those of all employers.