Kenyan employers freeze hiring

May 26, 2009
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, NAIROBI, Kenya, May 26 – A new survey by the Federation of Kenya Employers (FKE) indicates that 45 percent of companies sampled have frozen employment of new staff as a direct result of the global recession.

FKE Executive Director Jacqueline Mugo said on Tuesday that 30 percent of companies had laid off staff to mitigate the hard times.

Ms Mugo said the private sector was engaging the government on how best to reduce the negative effects of the downturn on an already constrained employment environment.

“It’s no secret that this country has been grappling with huge numbers of unemployment so it cannot be allowed the luxury of losing even one more job,” Ms Mugo said.

The report further reveals that seven percent of the companies sampled have shut down as a result of the crunch with 29 percent announcing a reduction in physical capital growth.

The survey was conducted within the last four months amongst 484 companies with a total workforce of 121,000 employees.

“7,287 employees have so far lost their jobs as a result of the crunch with another 3,000 expected to be losing their jobs anytime soon as result of planned lay offs,” Ms Mugo said.

Employees in the transport and communication sector were the worst affected at 20 percent, followed by the manufacturing industry at 13.8 percent and the agricultural sector at 4.41 percent.

“These figures do not really spell out gloom and should not raise our panic buttons but should make us engage in planning better for the future,” Ms Mugo said.

Out of the 484 companies that participated in the survey, more than half indicated that they had been affected by the recession in one way or another while only seven percent felt they had been severely affected by the recession.

FKE is proposing a reduction in electricity tariffs, fuel levies and tax on farm inputs, a review of food prices and bringing down the level of corruption in the country as some of the measures to mitigate the effects of the crunch.

According to a supporting survey carried out by the Pan – African Employers Confederation in 16 employment organisations in Africa, in the months of April and May 2009, 94 percent of all the countries had experienced a negative impact from the crisis with 19 percent of them having a high negative impact.

In 75 percent of the countries the impact of the crisis is expected to be more severe in 2009.

Tourism, agriculture, manufacturing, mining, quarrying and transport were the most affected sectors.

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