After a period of halting talent acquisition for various reasons, private Kenyan companies in May, 2023 exhibited a noteworthy shift in their hiring practices, actively recruiting new personnel, the Stanbic Purchasing Manager's Index (PMI) published in June 2023 showed.
The survey indicated that despite business shrinking for the fourth month in a row, hiring activity picked up in May, leading to the highest rise in employment numbers since November 2021.
Many entrepreneurs according to the survey, were banking on the inflation rate to stabilise and business activity to pick up and hence embarked on a hiring spree.
"Employment expanded at the fastest rate since November 2021, however employment in the wholesale and retail sub-sector was down. Inventories managed to increase despite firms slowing purchase of inputs implying that inventory was driven partly by fewer new orders,"
"Businesses often cited efforts to improve client services," the survey indicated noting that this was counterproductive as it led to a significant rise in staff costs.
The PMI further noted that business expectations regarding the 2023/2024 financial year improved in May 2023, after slipping to a survey-record low in April.
"However, the uptick in sentiment was only slight, with just 10 per cent of respondents giving a positive forecast for output amid ongoing inflation concerns," the survey added.
While the employment rate rose significantly, the PMI noted that for the fifth month in a row, private businesses were shrinking majorly due to a rise in input price.
Apart from high input price, the PMI detailed that depreciation of the shilling and rising fuel prices were the other two reasons that led to businesses exiting the market as they had led to a record increase in purchase costs.
“Almost a third of surveyed businesses reported a decline in sales, with comments often linking this to the cost-of-living crisis and a resulting lack of purchasing power among customers,” the survey painted a grim picture of the trade industry in Kenya.
While the PMI indicated increased job opportunities for Kenyans, a survey released by Trends and Insights For Africa (TIFA) on Tuesday, July 4, indicated that 38 per cent of Kenyans did not have a monthly income.
Additionally, the study revealed that only 3 per cent of employed Kenyans were earning Ksh50,001 and above.
