KCB Group’s employee headcount fell by 240 in the six months to June 2019, another low in seven years, with CEO Joshua Oigara saying the trend was inevitable given banks’ increased investment in digital outlets.
The group had 5,980 employees at the close of June 2019 compared to the 6,220 it closed 2018 with, marking a sustained drop in its headcount amid the lender’s growing profitability. From a staff size of 5,162 in 2012, the number of employees grew to a peak of 7,509 in 2015 before starting to shrink.
“For efficiency, we will see less and less jobs in the industry. In reality, as we build much more investments in our digital channels and agencies, we will see fewer jobs in our establishments,” Mr Oigara told the Business Daily in an interview.
However, the CEO who also chairs the Kenya Bankers Association (KBA), said a new set of jobs would be created elsewhere through linkages with the banking sector.
“The future of jobs in the banks is actually to create jobs in different sectors and businesses by working with entrepreneurs.
“We have to reorganise and reimagine job creation in the sector by investing in small businesses,” he said.
The bank runs 2jiajiri programme that has so far benefited 27,139 people through opportunities spread out in domestic services, automotive engineering, beauty and personal care, building and construction as well as agribusiness.
The programme aims at catalysing job and wealth creation for at least two million youth engaged in the informal sector within eastern Africa.
KCB’s average transactions per teller per day decreased by 15 percent to 64.4 in the half-year period to June compared with 75.4 in the previous half-year.
The number of branch transactions also dipped from 8.5 million to 7.3 million.
Banks remain a crucial employer despite consistently shedding jobs over the last few years.
In the 2017/18 financial year, commercial banks spent Sh39 billion on staff costs, according to the KBA.
While one employee was serving 1,227 customers in 2016, the same employee is now serving more than 1,544 customers as a result of increased efficiency from technology.
The Central Bank of Kenya (CBK) has previously hinted that the industry was likely to continue experiencing changes in staffing as lenders adopt innovations such as financial technology, blockchain and artificial intelligence.
While the common practice by banks is to trim their workforce to cut costs and improve on efficiency, the CBK data last year showed that lenders’ wage bill still rose despite layoffs as their remaining staff’s salaries increased.
With the increase in workload, workers in the banking sector have bargained for improved terms, complicating the management’s model of growing by shrinking the workforce.