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Embracing Labour Market Flexibility in Kenya


Status of Labour Market Flexibility

The World Economic Forum’s Future of Jobs Report 2023 explores how emerging technologies such as artificial intelligence, automation, and robotics are reshaping the workforce and the skills needed for future jobs. Within this narrative, two distinct trends come to the fore, illustrating the dichotomy between rapidly expanding sectors propelled by innovation and specialization and declining sectors susceptible to automation and shifting consumer preferences.

Table 1: Fastest growing versus fastest declining jobs

Top 10 Fastest Growing JobsTop 10 Fastest Declining Jobs
Artificial Intelligence (AI) and Machine Learning SpecialistsBank Teller and Related Clerk Jobs
Sustainability SpecialistsPostal Service Clerks
Business Intelligence AnalystsCashier and Ticket Office Clerks
Information Security AnalystsData Entry Staff
Fintech EngineersAdministrative and Executive Secretaries
Data Analysts and ScientistsMaterial Recording and Stock Keeping Clerks
Robotics EngineersAccounting, Bookkeeping, and Payroll Clerks
Electrotechnology EngineersLegislators and Officials
Agricultural Equipment OperatorsStatistical, Finance, and Insurance Clerks
Digital Transformation SpecialistsDoor to Door Sales Workers, News and Street Vendors, and Related Workers

Source: World Economic Forum (2023), Future of Jobs Report

Flexible labour markets have enabled businesses in the fastest growing sectors (see Table 1 for top 10 fastest growing jobs) to quickly adapt to evolving market conditions, leading to the creation of new job opportunities. The global labour market outlook further underscores the importance of labour market flexibility (International Labour Organization – ILO and World Employment and Social Outlook, 2023). With the global unemployment rate expected at 5.2 per cent and an additional 2 million workers projected to be seeking jobs in 2024, labour market flexibility becomes crucial even for the Kenyan economy to navigate these emerging issues.

Labour market flexibility can help Kenya’s labour market adapt to changing conditions by enabling employers to adjust their workforce in response to fluctuations in demand and economic conditions. Flexibility in hiring and firing practices, wage setting, and contractual arrangements can help businesses in Kenya remain competitive and resilient in the face of global economic uncertainties. The characteristics of digital transformation being seen currently further imply that labour market policies could embrace flexibility in labour market transitions, which allows talent to flow between different firms, while ensuring that workers have adequate social protection.[1]

Policy Gaps and Emerging Issues in Labour Market Flexibility

Flexible working hours and days

One of the characteristics of a flexible labour market is the ability to adjust hours of work to suit the changing needs of employers. This feature has been partially dealt with in The Regulation of Wages [General] Order [the ‘Order’], which talks of maximum number of working hours and days. According to the regulation, the normal working week shall consist of not more than 52 hours of work spread over 6 days of the week while the normal working week of a person employed on night work shall consist of not more than 60 hours of work per week. Regulation 7 of the Order, however, allows an employer and an employee by mutual consent to agree to the deferment of the employee’s rest day. Although providing a framework on adjusting employee working hours, employers are not at liberty to make changes at will in regard to prevailing market conditions.

Part-time work, freelancing and remote activities

A flexible labour market is characterized by part-time work, freelancing and remote activities replacing traditional employment structures. The Employment Act, L.N. 156/1977, only identifies three types of work; that is permanent, temporary and casual work. The Employment Act of 2007 lacks specific provisions for part time work; that is digital work, which has become increasingly prevalent in the modern economy. This gap in the legislation creates ambiguity around the rights and protections of workers engaged in digital work, such as freelancers, remote workers, and gig economy workers. One of the key challenges is that the Employment Act does not clearly define the rights and obligations of digital workers, such as their entitlement to benefits, social security contributions, and protection against unfair treatment. This ambiguity can lead to disputes between employers and digital workers regarding their employment status and rights under the law.

In addition, labour unions play a crucial role in advocating for workers’ rights and improving working conditions. More often, they resist changes that could accommodate online workers, such as flexible working hours or performance-based pay, out of concern for protecting the rights of traditional workers. These actions in return contribute to inflexibility of the labour market.

Adaptability and cultural shift to flexible work arrangements

In a flexible labour market, wage and benefit structures become more adaptable to the specific project or activity, resulting in increased dynamism. The emphasis is on the importance of providing value rather than maintaining a static position, which encourages high performance and the development of new ideas. The Employment Act of 2007, Section 26 talks of the basic minimum conditions of employment, with emphasis on fixed work arrangements. The terms set out in this section are aimed at employee protection, which may deter businesses from flexible models; that is hiring and firing of employees depending on the prevailing market conditions. The legislation also lacks flexible work compensation guidelines, thus leaving workers vulnerable.

Skills and abilities over traditional qualifications

Lastly, in a flexible labour market, the emphasis moves from conventional qualifications towards the specialized skills and abilities required for certain tasks. This modification creates opportunities for individuals with unconventional schooling or career trajectories to prove their skills, enabling them to obtain employment that aligns with their unique strengths. Currently, Kenya has inadequate comprehensive policies and regulations that recognize prior learning, but plans are underway to formulate a national policy on Recognition of Prior Learning in Kenya, which will possibly address the issue.

Conclusion and Recommendations

Embracing flexibility in Kenya’s evolving labour market is an essential step towards achieving economic resilience, inclusivity, and adaptability. The gaps and opportunities underscore the need for comprehensive policy reforms that may strike a balance between job security and labour market flexibility. For the country to achieve labour market flexibility, concerted efforts are necessary.

There is need to amend the labour laws and regulations, including the Employment Act (2007), to incorporate provisions for flexible work arrangements, such as part-time work, freelancing, and remote activities. The Ministry of Labour and Social Protection in collaboration with relevant stakeholders, such as employers and labour unions, could oversee this policy revision.

Modernization of labour laws is necessary; this could be spearheaded by the Ministry of Labour and Social Protection to ensure that legislation reflects the changing nature of work in the digital age, defining the rights and obligations of digital workers and addressing the challenges faced by online platform workers.

The development of an enhanced regulatory framework to support digital work, led by the Communications Authority of Kenya, in collaboration with the Ministry of Information, Communications, and Technology, would ensure access to essential benefits and protection under the law for online platform workers.

Efforts to encourage a cultural shift towards flexible work arrangements, coordinated by the Ministry of Labour and Social Protection through awareness campaigns and training programmes could be considered.

The government through the Ministry of Education in collaboration with the Ministry of Labour and Social Protection could consider fast-tracking the establishment and implementation of the national policy on Recognition of Prior Learning (RPL) in Kenya to allow outcomes of prior learning in all contexts of life to be validated, recognized and certified to give people wings to new perspectives and opportunities in education and training, employment, entrepreneurship and better jobs.


Authors: Yabesh Kongo, Young Professional

Eric Ondimu, Young Professional

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