Nice papers, but can you hack it? The problem with Kenya’s job market

One morning in the first week of this month, a group of researchers released survey results on job trends in the country.

The study, by Corporate Staffing Services Limited, examined the uneasy, often adversarial, relationship between employees and their employers in Kenya, and the findings have ignited a perennial topic of debate: Is the market mistreating workers, and do employees have to coerce their bosses to be promoted?

Conducted between January and February this year, the research found that the practice of using job offers from rival companies to seek pay raises or promotions had become rampant in the country, affecting almost all sectors but more prevalent in the financial services industry and public service.

Mr Epimach Maritim, the human resource director at security firm G4S, says such employee behaviour amounts to holding employers to ransom, and that it may end up proving counterproductive to both the employer and employee.

BARGAINING CHIP

Yet Mr Perminus Wainaina, the Corporate Staffing Services managing director, says that “four in every 10 candidates seeking jobs in Kenya use new job offers as bargaining tools for promotions with their current employers”, and that this ends up distorting the budget for both the companies involved and creating “a negative working environment as both the current employer feels ambushed and the employee feels underpaid”.

Analysts, however, argue that this could be because companies are increasingly hiring only those who already have jobs as they do not want to waste time training uncertain employees, and that this could be the reason employees, who already stand a better chance of landing another job, are busy looking for counter-offer opportunities.

While employees want a positive and challenging work environment and a well-paying job with good benefits, employers are looking for practical skills, leadership, hands-on capabilities, innovation and independence. Unfortunately, these two cannot seem to reach a point of balance.

Ms Njoki Muhoho, a management consultant, says the average starting pay for a fresh university graduate is about Sh45,000, and that many employers are actually paying less “due to the poor quality of education and the lack of all-rounded graduates who can learn by perception and be self-supervised”.

That, she adds, means that the bulk of money that would otherwise have been used to pay these employees better salaries is used to train them.

Some human resource managers have forecast better days ahead for employees, but Mr David Cowan, a research analyst at Citigroup, does not see that happening any time soon.

That is because these favourable predictions are based on the current economic growth rate, but Mr Cowan says the growth might not be sufficient to create a good and stable employment environment.

Kenya’s economy is projected to grow by six per cent this year, but the gains are likely to be countered by a growing fiscal deficit as the government’s total expenditure exceeds revenue collections, meaning our indebtedness is likely to keep growing.

This will in turn create a hostile job market where employers keep struggling with limited budgets to retain their top talent, while the unemployed find it harder to land jobs.

FLOODED MARKET

Almost all the workers we talked to cited low wages, few (if any) employee benefits, and too much contract work as their main concerns currently. Ms Neima Omar, 30, was one of them. A Bachelors degree holder in tourism and hospitality from Moi University, Ms Omar said she earns a net salary of Sh35,000.

“The money ends before mid-month,” she said. “I have tried to get a better job or a promotion in vain.”

She reports to work at 8am and leaves at 6pm. “I feel stressed, overworked and underpaid, yet I cannot quit till I get a better job,” she said.

Ms Omar’s tribulations mirror those of many others in the country, and some might even regard her as one of the lucky few. Unfortunately, the situation is not likely to change soon, given the current economic environment.

Mr Maritim, who studies employment trends in Kenya, says it might take the next two years to register a change in the employment market.

“The current environment is very competitive and only those who possess practical skills will be considered,” he says. “The job market is currently flooded with graduates, most of whom have academic qualifications, including masters degrees, that are not industry-specific. That means that if any of these are hired, they can only be productive in six months to one year.”

PricewaterhouseCoopers (PwC) Director of People and Change advisory services in East Africa, Mr Michael Holzmann, believes that companies in Kenya fail to look beyond their embedded hierarchy or industry when recruiting, and that this affects the calibre of people they get.

The PwC 2014 Africa CEO Survey states that 87 per cent of CEOs in Kenya share the view that pay and performance should be considered in relation to risks.

“There is a broad recognition that if companies nurture and pay attention to human capital — and treat their employees like an asset — they will earn a greater return on their investment,” says Mr Holzmann.

RETAINING TALENT

Corporate Staffing has pointed out the ability to retain talent and provide competitive compensation as the top challenges that employers are facing currently.

These, coupled with other factors, result in burn-out of talented employees, and hence drive their focus away from their tasks. Eventually, they decide to coerce their employers to pay them better salaries.

Universities are not helping the situation either. Even though the market is flooded with graduates, few of them are employable, forcing companies to approach job applicants with trepidation.

Currently, employers prefer graduates from Nairobi and Strathmore universities, according to Corporate Staffing. Kenyatta University and the Jomo Kenyatta University of Agriculture and Technology are the other two top universities preferred by employers, followed, in that order, by Moi, Egerton, Maseno and Masinde Muliro universities.

The Inter-University Council for East Africa (IUCEA) says that the rising number of universities has resulted in low-quality graduates, and that only half of the 50,000 students who graduate annually are suitable for employment.

Human resource managers prefer particular universities because of their technical expertise and knowledge of industry displayed by both staff and students from the institutions.

The International Journal of Social Science Tomorrow (ISSJT) last year published a study by a research fellow at the Institute of Policy Analysis and Research. Titled Graduate Unemployment and Employability in Kenya, the study focused on transforming the country’s university education to conform to dynamic market demands while drawing lessons from other African countries.

It found a mismatch in the labour market demand and supply, where universities are producing graduates who lack the appropriate skills and knowledge needed at the workplace.

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PARADIGM SHIFT 

What graduates, universities and employers need to do to change situation:

Graduates: Gain specialised work experience and job knowledge that is far beyond what you have been taught in class as this puts you at a better position for employment. Also, be aggressive and offer to take up internship opportunities and volunteer positions in your career line

Universities: Enhance the credibility of the certificates you issue by offering quality course work, having proper infrastructure, qualified lecturers and market-driven courses

Employers: Learn that your success depends on keeping the best talented employees, so you must recognise the importance of retention. This means paying market-rate salaries and, where possible, having other incentive programmes or benefits such as medical, pension and training, as well as rewarding performance and improving employee relations

With the ever-growing number of competitors in the marketplace, talent is the only differentiator. Capital is abundant while technology is easy to access, but the brainpower of knowledge and experienced staff is the most important asset for the modern, progressive organisation.

It is, therefore, alarming when more than half — 54.2 per cent — of respondents say that their biggest challenge is retaining top talent, as talent retention increasingly determines the success or failure of many organisations.

Further, 50.3 per cent and 43.5 per cent of the employers say providing competitive compensation and managing organisational changes, respectively, is a major hurdle.

While 37.3 per cent face employee morale challenges, 24.9 per cent experience challenges in recruiting high skilled applicants, 26.6 per cent have problems maintaining productivity levels, 25.4 per cent cite upward mobility for their employees as a challenge, 12.4 per cent mention worker burnout, 16.9 per cent employee engagement and 11.3 per cent indicate that they have experienced the challenge of cutting down on cost per hire.

PREFERRED GRADUATES

University of Nairobi tops public universities that employers prefer hiring fresh graduates from

Of the 205 employers surveyed in the Corporate Staffing study, 15 per cent said they had no preference for a particular university when recruiting graduates, while others said their preferences were guided by job specialisation. However, of those who had a preference, nearly 85 per cent cited University of Nairobi as the most preferred institution when hiring. The figure below illustrates the public institutions preferred for recruiting of fresh graduates by HR managers in Kenya:

Strathmore University top among private institutions employers prefer hiring fresh graduates from

Strathmore University is the most preferred private university by 78 per cent of the respondents.

With the rising number of private universities, the real prize is getting out of college with a valuable degree, yet distressing stories abound about students who wasted time and resources pursuing university education that does not yield a promising career.