Blowout of the debilitating and mutating Covid-19 virus has left governments, economies and businesses constantly looking for avenues to curtail costs whilst struggling with repeated lockdown measures to confront and rein in the contagion’s spread.
In Kenya, average household incomes have taken a nosedive owing to the crashing of several sectors including and not restricted to the tourism industry. The pandemic has been the cause of lucrative businesses downscaling operations and staff, or where unrecoverable, shut down operations as the pandemic continues to rage. The worst hit companies are in the hospitality, tourism, horticulture, transport, education and communication sectors.
As per a recent six-nation GeoPoll survey released in May 2021, conducted across Ivory Coast, Mozambique, Democratic Republic of Congo, Kenya, Nigeria and South Africa, leading African economies are descending into poverty due to the social and financial impact of the pandemic. Covid19 has also become the leading cause of rising unemployment in the region.
This is clearly evident in Kenya where over 20 percent of the population consists of youth employed mostly in the informal sector, thereby taking a big hit. In the formal sector, the youth are hit hard with suspensions and layoffs by companies citing lacklustre corporate earnings. This leaves in a limbo the almost one million fresh jobseekers who graduate from educational institutions on a yearly basis.
One also wonders if the rise in the digital economy could be additionally responsible for an escalation in job losses. During this unprecedented health crisis, organisations have taken measures to ensure safety at the workplace. Many companies have encouraged work from home or work from anywhere practices for most or some employees.
Recently a top-notch multinational decimated salaries to one third and passed on the infrastructure, bandwidth and other costs on to the staff, reasoning the action as a way forward to new post-Covid times salary structures.
Additionally, the company is not buying health coverage but giving an allowance for health insurance, thereby passing on any additional unexpected healthcare costs to employees. Many such organisations have saved resources and finances in terms of rentals and set-up.
Not only have they reduced staff and chopped salaries of the “work-from-home” staff, they have shifted costs on to the employees.
Interestingly enough where employment prospects are concerned, the entire hierarchy of organisations have been affected. Headhunters are saying it is a difficult time for senior management resources to get hired. Various human resource heads have gone quiet.
Employees who are fortunate to retain their jobs, are probably performing duties of multiple individuals owing to the downsizing of staff. Together with the pay cuts employees are experiencing stress and fear instead of job satisfaction required to work diligently in their roles.
The pandemic has not only led to job losses but there is also an underutilisation of labour in Kenya. Over the past years, agricultural mechanisation which has been low in Kenya seems to be picking up. An instance is Kenya’s tea farming industry - the third largest in the world after China and India -which has faced major job cuts after the adoption of leaf harvesting machines. This labour-intensive hand-picking process yielded top quality tea which is also a major foreign exchange earner for Kenya.
The tea farm owners today claim that mechanization will make the industry more productive. The way forward must be to constantly train, retain and engage employees in activities which cannot be performed solely by the machines.
During such desperate times, when the resources of individuals are gradually getting depleted, with little sign of economic recovery, one does not know how long this economic crisis will last. With the suffocation of the job market, could it be possible that individuals would resort to dishonest means to survive? The distress is that if these conditions persist, there is likelihood of an upsurge in crime.
Ritesh Barot is a business and financial analyst, humanitarian, conservationist, occasional artist, recipient of OGW honour. [email protected]
