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Why Nairobi County is stranded with its ageing workforce

City-hall

An aerial view of Nairobi City Hall. FILE PHOTO | NMG

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Summary

  • Nairobi City County Public Service Board chairperson Thomas Kasoa warns that a policy needs to be urgently put in place to ensure the county government has a proper human resource succession plan.
  • Mr Kasoa says that three quarters of the Ann Kananu-led administration are more than 50 years old.
  • To cure this, he advices that the policy should have an age limit during recruitment. Every year, the board chairperson adds, more than 400 employees retire from service.

Just a little under a year after taking over as the first governor of Nairobi City County government, Evans Kidero laid bare how a bloated workforce is costing City Hall the much-needed revenue that could be used in development services.

That was July, 2014. At the time, City Hall had 15,000 workers having inherited 4,000 from the central government and 11,000 of its own.

However, Dr Kidero said the county government needed just 6,000 employees to efficiently run its functions. But they were stuck with 9,000 redundant workers because it would cost City Hall close to Sh12 billion as a send-off package to retire the “redundant” workforce.

“We have 9,000 workers whom we really don’t need but we have to continue paying them because we need a lot of money to retire them. Currently, 70 percent of the revenue we generate goes to pay workers we really don’t need,” Dr Kidero said then.

“But as I said, you cannot send away workers without paying them. Until you are able to pay them, you have to keep on paying them,” he added.

But what the former governor did not say was that the bloated workforce was primarily composed of staff nearing their retirement age.

Seven years down the line, City Hall is staring at a catastrophe in terms of aging workforce after several failed attempts to rejuvenate the old workforce.

Nairobi City County Public Service Board chairperson Thomas Kasoa warns that a policy needs to be urgently put in place to ensure the county government has a proper human resource succession plan.

Mr Kasoa says that three quarters of the Ann Kananu-led administration are more than 50 years old and if such a policy is not quickly put in place, then in the next three or four years, City Hall will have most of its workers over 54 years.

To cure this, he advices that the policy should have an age limit during recruitment. Every year, the board chairperson adds, more than 400 employees retire from service.

“The last recruitment was done almost 20 years ago. Those people are now over 45 years old and if we don’t have a succession plan in terms of human resource, then the county government will soon grind to a halt,” says Mr Kasoa.

“This is the right time that the assembly [county] should come up with a succession plan in terms of recruitment because the biggest challenge we have is aging workforce,” he adds.

He notes that the situation has been exacerbated by a lack of recruitment with most sectors in the county government having last recruited more than 20 years ago.

“If you go to the fire-fighting department, you will find that the staff over there are more than 54 years. The last time the county recruited there was in 1997. If people are retiring every year, what will happen to this sector in three or four years to come?” He poses.

In February 2019, the then Devolution executive and acting County Secretary Pauline Kahiga-Waititu said the county had a heavy-bottom workforce consisting mainly of semi or non-skilled staff at the expense of skilled staff.

A whopping 8,400 of the staff have only primary level education with only 240 or less than two percent comprising top professionals including engineers and architects.

In the past few years the county government has tried retiring some of them but only 462 employees have exited City Hall through natural attrition in five months.

This has seen the staff count reduce from 12,496 staff as at July, 2018 to 12,034 as per the latest count at the end of January 2019.

In the financial year ended June 30, 2018, City Hall had spent a staggering Sh14.84 billion on wages for the 12,496 employees.

This was more than half of the revenue it realised that financial year contrary to the Public Finance Management Act, which requires that a county government’s wage bill shall not exceed 35 percent of total budget.

A biometric census ordered by former governor Mike Sonko in 2018 when the bloated workforce was costing the county government Sh1.1 billion every month reveals that about a half of the employees are over 50 years with most set to retire soon.

The report shows that out of the 11,603 City Hall workers, a whopping 5, 709 are aged 50 years and above.

Interestingly, it indicates that 19 employees were then still in the payroll although they were aged above the retirement age of 60 years.

A total of 2,712 workers, the report shows, were aged between 55 and 59 years; those aged between 50 and 54 years were 2, 978 while another 2, 663 were in the age bracket of between 45 and 49 years.

Those in the ages between 40 and 44 years were 1, 757 while those below the 40-year mark were only 1, 474 where 682 were between 35 and 39 years.

The report further reveals that only 792 of the employees are below the age of 35, representing only 6.8 percent of the entire workforce. Six hundred and twenty one are aged between 30 and 34 years while only 171 are below the age of 30.

Releasing the report, the then City Hall acting County Secretary Leboo Morintat said that City Hall’s payroll as of April 2019 had 11,988 employees but in the intervening period, 200 had retired between April and November while another 85 were engaged in training overseas.

A further 58 officers were serving suspension due to disciplinary cases whereas 23 had passed away during the seven months. Another 11 employees had resigned during the period under review.

BUT HOW DID THE COUNTY GOVERNMENT FIND ITSELF IN SUCH A TIGHT CORNER?

Since September, 2017, the county government has been trying to roll-out a voluntary early retirement scheme to no success.

The sticking point has been the workers’ union, under the Kenya County Government Workers Union, which has maintained that the plan can only be actualised if City Hall puts together their retirement benefits in full.

That month, Mr Sonko announced that his administration had set aside a Sh1.5 billion package for staff due for retirement while appealing to the staff to take an early retirement plan. Nothing came out of the process and in May 2018, he revisited the process of rolling out a voluntary early retirement plan.

For the exercise, Sh1 billion was set aside to lay off 70 percent of the ageing workforce, who are either unskilled or semi-skilled.

At the time, the ex-governor said a majority of the staff were too old and will be retiring in the next 10 years, urging the workers’ union to begin discussions with his administration over rolling out a voluntary early retirement.

But the then workers’ union Nairobi branch chairman Boniface Waweru said any discussion had to include the affected staff receiving their benefits.

“Given the fact that the set retiring age is 60 years, members will accept voluntary retirement but it is up to an individual to choose whether they will leave before they reach the age of 60, but I am positive that most of my members will take the retirement package on condition it is inclusive of their benefits,” said Mr Waweru at the time.

In September 2018, Devolution and Public Service Management executive Veska Kangogo announced that 731 county employees were set to retire in the financial ended June 30, 2019. But only 400 voluntarily left the county government between July 2018 and January 2019.

In July 2019, the national union of county workers opposed an early retirement scheme introduced by City Hall set to send home the county’s aged staff without pay.

KCGWU General Secretary Roba Duba said the move is discriminatory and only targets workers that were formerly working at the defunct Nairobi City Council.

“The plan is unlawful, outrageous and it will not work because we will not accept it. Their idea is to lay off people so that they can employ their cronies but this will not happen under my leadership,” said Mr Duba at the time.

He claimed that members of the union were being threatened to sign the document and go on early retirement yet the two parties are yet to agree on the modalities of the plan.

Mr Duba pointed out that the two parties need to agree on a formula for retrenchment which includes payment of dues owed.

Further, the county government was also yet to pay the workers’ Sh20 billion in unremitting pension contributions, saying that the dues must be cleared before commencement of any talks on retrenchment.

“The only time a county can retrench or lay off staff is when it is bankrupt or it has been liquidated or its offices have been closed but no such thing has happened,” said Mr Duba.

The county government was cornered and it subsequently shelved the plan.

However, in March this year, City Hall announced it had set aside Sh100 million to commence roll -out of voluntary early retirement scheme for its staff aged 50 years and above, with the fund already approved by the county assembly.

Ms Kangogo said the move is meant to reinvigorate an aging workforce as well as reduce its bloated wage bill.

She further said that the county government had also developed a voluntary early retirement policy which has been delaying the process since it was mooted in 2018.

In May, City Hall allocated another Sh175 million towards the early voluntary retirement scheme as well as payment of terminal benefits owed to retirees.

The amount was part of the county government’s second supplementary budget approved that month.

According to Nairobi County Medium Term Debt Strategy Paper for the financial year ending June 30, 2022, City Hall owes its retired staff Sh173 million in terminal benefits.

Nairobi County Assembly Budget and Appropriations committee chairman Robert Mbatia said the allocation will finally see the Ann Kananu-led administration roll out of the much-touted early voluntary retirement scheme.

“Having money allocated to the retirees’ benefits, I believe that we can ably roll out the early voluntary. It has not been forthcoming because staff were afraid that in the event that they retire, they will go home without any packages but having cleared this then we will now be able to bring in fresh blood,” said Mr Mbatia at the time.

But months later, nothing much came out of the exercise with Nairobi County staff union in June rejecting the planned roll out demanding full settlement of retirement benefits as well as pension due to Laptrust and Lapfund.


The Workers Union Nairobi branch Secretary Festus Ngari said the county government should first clear money owed to those who naturally retired between 2018 and 2020 and those set to do so in 2021.

He said that City Hall is yet to clear Sh19 billion local authority pension trust (Laptrust) debt as well as Sh23 billion Local Authority Pension Fund (Lapfund).

Further, Mr Ngari pointed out that the county government still owes those who exited City Hall through natural attrition Sh175 million in form of gratuities, coffin costs, terminal leave dues and other benefits.

He criticised the move accusing the county government of unfair labour practice with impunity and disregard of labour laws and good industrial deeds.

He argued that the constitution of Kenya does not discriminate nor marginalize workers based on age, in fact people living with disability work up to 65 years, lecturers 7 years and judges up to 72 years.

“While the stable productive life at 50 years is respected under international statutes, are you saying you will be exception to the rest of global industry practice?” posed Mr Ngari.