In the latest survey conducted by the Central Bank of Kenya (CBK), talent management and reward strategy have become the primary focus for Kenyan CEOs, signaling an upcoming talent war that may result in improved wages and working conditions for employees in 2024. The survey, which included over 1,000 private sector CEOs from various industries, reveals a shift from the previous year’s emphasis on customer-centric approaches for business expansion. This change indicates a growing recognition among businesses of the significance of talent acquisition and retention for sustainable growth.
The shift towards prioritizing talent strategy is viewed as a positive development for workers, especially considering the challenges faced since 2019, including salary decreases or stagnation, high inflation, and currency depreciation affecting purchasing power. The recent Financial Services Monitor by the Old Mutual Group highlighted that inflation has diminished the purchasing power of 62 percent of Kenyans over the past five years, with salaries remaining stagnant for 29 percent.
While only nine percent of workers experienced a pay increase between 2019 and 2023, the heightened focus on talent strategy by companies suggests a potential improvement in this scenario. The survey also indicates an overall increase in optimism among businesses, with 26.1 percent of CEOs expecting the Kenyan economy to grow faster in 2024, up from nine percent in November 2023. Additionally, 44.6 percent of company leaders anticipate faster business growth this year, reflecting a more than ten percent increase compared to the previous survey in November.
However, the CBK’s Market Perceptions Survey reveals a sense of skepticism among companies regarding hiring more workers in 2024. Outside the banking sector, only seven percent of companies are certain about hiring more workers, while 31 percent believe they could, 47 percent say they won’t, and 15 percent are sure they won’t be hiring. Various challenges in the economy, such as the high cost of living, reduction in customers, weak shilling, and an unfavorable business environment, contribute to the mixed expectations on hiring, as reported by the surveyed CEOs. The top concerns for firms in Kenya include the increased cost of doing business, higher taxation, depressed consumer demand, and political uncertainty, according to 22 percent of the respondents.
