This month marked Lyn Mengich's fifth year as the chairperson of the Salaries and Remuneration Commission (SRC).
Before this assignment, Ms Mengich spent more than two decades as a HR practitioner in some of Kenya's top organisations, including KCB and Shell Oil Products Africa.
Business Daily sat down with her to reflect on the role that includes a review of compensation for State officers and other public civil servants.
What reflections do you have on the role five years later?
The wage bill in Kenya is a fairly complex issue because on the one hand, you are dealing with a country that must continue investing in critical areas and on the other, we have a wage bill above the set threshold.
Within that also, the SRC can directly speak about the wage bill but other areas require multiple stakeholders. The Commission has done well given these complexities.
Previously in your private practice, you were mostly in HR, how has the role at SRC differed?
My role now is not just about HR. My background has, however, been useful as the role at SRC requires one to have indepth knowledge on the subject matter. But unlike the private sector where you mostly deal with your immediate stakeholders, here you are dealing with many stakeholders outside your immediate institution.
This has been beneficial to me as an individual— being able to create partnerships and collaborate with other institutions.
On the recent remuneration review cycle, what are the savings that came off the elimination of some of the allowances?
We had already eliminated sitting allowances to public officers and the taxable car allowance, those yielded bigger benefits.
We are yet to quantify the benefits from the removal of allowances on task forces in institutional committees; we have started that journey and we will be able to quantify the benefits.
The allowances amounted to double compensation given to employees in the task force who were already earning salaries for the same job. There will be other savings in indirect costs.
Is this an area to explore in further managing the wage bill?
We have only done phase I and II. We targeted allowances for State officers and then isolated four allowances in Phase II. We will have a third phase going to institution by institution. I believe they will not just be savings but also address harmonisation of pay, equity and fairness.
The other part of addressing the wage bill has been on the recognition of productivity. How far would you say you are in establishing this metric?
We have launched the framework which helps institutions in developing their metrics to know what will be recognised by the Commission. It will obviously take a full-year cycle for actual recognition to happen.
We are jointly working with the National Productivity Centre which actually has the mandate to do it; the SRC has been providing technical support as well and also working with the Kenya School of Government in terms of capacity building.
At the moment, productivity is embedded in performance contracting, the Commission and other institutions with the mandate are collaborating to support the development of the performance indices/measurements. A year from now, we can actually talk about recognition.
When do you think we can hit wage bill targets?
From 2017/18, the percentage of the wage bill to revenue has come down from 51 percent and today we are down to almost 40 percent.
Going by this trend, we can say in five years, we have moved by almost 10 percentage points. If everything remains equal, in the next five years, we will be almost there.
You still have some years to go as SRC chair, by the end of your term, what do you feel will define your legacy?
For the first five years, it has been more to do with how we really build a process of collaborative engagement with stakeholders, recognising that challenges around the wage bill cannot be tackled alone.
When we convened the national conference on the wage bill and came up with resolutions that were adopted by the summit, to me and the Commission, that was one of the highlights and it demonstrated how we can work together to bring down the wage bill.
For the next one year, it’s about pushing the productivity agenda to be central in what the government does. We are cognizant that it’s not the sole mandate of the Commission.
This will call upon us to work with other stakeholders and push this agenda in the private sector to make this a national conversation around productivity.
We have done really well on labour productivity. Before we had strikes but we have now seen a lot of stability and that has come with sensitisation, capacity building and engaging stakeholders, specifically the employers and labour unions.
Right now there is an understanding in where the Commission is coming from and the role of each party in collective bargain negotiations.
Everybody now knows that affordability and fiscal sustainability are central to discussions on collective negotiations and appreciate all other principles.
In that, it has helped us bring the conversation that every year doesn’t always involve the review of collective bargain agreements.
