Talent management and reward strategy is now the top priority for Kenyan CEOs, laying the ground for talent ‘battles’ that will likely lead to improved wages and working terms for employees this year.
According to the latest CEOs survey by the Central Bank of Kenya (CBK), 16 percent of business leaders say they will focus on talent management this year as a strategy for growing their businesses.
The survey polled more than 1,000 private sector CEOs drawn from the financial services, manufacturing, agriculture, professional services, healthcare, tourism and real estate sectors, among others.
This is a shift from last year’s trends when CEOs prioritised a customer-centric approach to expand operations and boost revenues.
Other drivers for business expansion CEOs previously prioritised were this time ranked lower, among them strategic acquisitions, expansion into new markets and effective risk management.
The change in tack means that businesses are now appreciating the importance of talent acquisition and retention as a way of growing and sustaining businesses, which is good news for workers as it is likely to result in better pay and working conditions.
This could offer a reprieve for workers, coming at a time when salaries have decreased or remained constant for a majority of Kenyans since 2019, amid high inflation and currency depreciation that has also hit consumer purchasing power.
The recently published Financial Services Monitor by the Old Mutual Group revealed that inflation reduced purchasing power of 62 percent of Kenyans over the last five years amid salaries stagnating for 29 percent.
“This means that the majority of these consumers currently have less money in their pockets than they did before being impacted by the pandemic,” says the Old Mutual survey published last week.
Just nine percent of workers have had their pay increase between 2019 and 2023, but with the rise in priority for talent strategy by companies, more workers could jump into this bracket this year.
Businesses are also increasingly optimistic this year, with 26.1 percent of CEOs now expecting the Kenyan economy to grow faster in 2024, up from just nine percent last November.
At the same time, the survey reveals, 44.6 percent of the company leaders expect their businesses to grow faster this year, a more than ten percent increase compared to a similar survey last November.
The CBK’s Market Perceptions Survey published last week, however, reveals that despite the increased optimism, companies are sceptical about hiring more workers this year.
Outside the banking sector, only seven percent of companies are certain they will be hiring more workers this year, 31 percent believe they could, while 47 percent say they won’t, and 15 percent are sure they won’t be hiring, the survey shows.
“Non-bank respondents expressed mixed expectations on hiring, citing challenges in the economy, including the high cost of living, reduction in customers, weak shilling, low activity, an unfavourable business environment, decline in business due to high taxation and high fuel prices, reduced output, poor cash flow, increased cost of doing business and increased cost of production,” said the CBK.
The CEOs’ survey shows that the increased cost of doing business is not the top worry for firms in Kenya, cited by 22 percent of the respondents. Other concerns are higher taxation, depressed consumer demand, and political uncertainty.