Most CEOs do not expect the country to create many jobs next year, with many projecting continued stability in employment levels. This comes as the survey revealed that nearly a third, about 31.3 per cent of manufacturers, cut full-time jobs in the three months to November 2024.
This is according to the latest CEO survey conducted by the Central Bank of Kenya (CBK). According to the survey, service sector employment remained largely stable in the third quarter of this year, while agriculture sector employment decreased, coinciding with the short rain period and the seasonal nature of agricultural activities.
“Respondents expected economic growth to be lower in 2024 compared with 2023, but to remain resilient, supported by a stable macroeconomic environment and strong performance in the agriculture and service sector,” reads part of the report.
Despite the service sector hiring, half of them posted reduced sales in an environment of weak demand for goods and high operation costs.
Kenyans queue for Jobs in Nairobi.
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The CBK study conducted among private sector chief executive officers (CEOs) in November shows the shedding of full-time jobs came in the period in which 56.3 per cent of manufacturers reacted to reduced sales by cutting production volumes and therefore requiring less staff.
“The manufacturing sector continues to be impacted by the high cost of doing business, taxation and statutory deductions, liquidity constraints from the elevated cost of borrowing and pending bills, subdued consumer demand, and reduced competitiveness,” says the CBK survey.
The CEOs employment outlook for 2025 reveals a stark divide between banks and non-bank private firms, with financial institutions leading in hiring optimism.
According to the November 2024 Market Perceptions Survey, “72 per cent of banks expect to hire in 2025 compared with 43 per cent of non-banks.” Banks attribute this positive outlook to branch expansions, the launch of new products, and the filling of key vacancies essential to their operations.
In contrast, non-banks need to grapple with high operational costs and diminished business output, which are hindering their ability to increase staffing levels.
Non-bank private firms, particularly in sectors like retail, hospitality, and construction, anticipate significant challenges in expanding their workforce. Respondents highlighted barriers such as elevated taxation and reduced consumer demand. One non-bank participant noted that “high operational costs, taxes, and low business output are key impediments to new hires in 2025.”
Additionally, many firms are turning to ICT and automation to streamline processes, which reduces the need for manual labour and further limits employment growth.
Temporary hiring is expected to see a modest boost during the festive season, particularly in the hospitality and retail sectors. Non-banks reported plans for seasonal contract recruitment, with one respondent observing that “contract hiring during the festive season will primarily support hospitality and retail operations.” However, these gains are unlikely to translate into long-term employment stability, as demand uncertainties and high taxation continue to weigh heavily on non-bank firms.
Nearly half, or 43.4 per cent, of CEOs leading manufacturing firms expect reduced growth in the next 12 months, making the sector the one with the lowest growth prospects. Just 23.1 per cent of CEOs in this sector see increased growth in the next 12 months.
Matatus heading to Nairobi CBD during traffic along Ngara
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Jalang’o
