Kenyans risk losing their jobs to machines

Robots working on computers


“The attack began at 6:18pm, just as the Terminator said it would. Judgement Day, the day the human race was almost destroyed by the weapons they’d built to protect themselves.”

The words of John Connor, played by Nick Stahl, in the movie series, Terminator 3: Rise of the Machines, must have had a symbolic meaning at Britam Towers last week. 

It was Judgement Day — the day when machines rose against humanity in a fictional dystopia created by the director of Titanic James Cameron — for employees of financial service group Britam Holdings.

At least 100 of them would be kicked out, rather diplomatically, through the voluntary early retirement (VER). They would be replaced with machines — computers, smartphones and tablets. 

“The VER is part of our business realignment process that places our customers at the very heart of our business and focuses on building and growing market leadership through greater efficiencies driven by innovation and technological advancement,” said Britam Managing Director Benson Wairegi.

The mood must have been tense at Britam Towers, the air heavy, filled with fear, anxiety and resignation. 

Soon, the ill-fated employees would be tossed out into the cold world of desperate job seekers. In their replacement would be tiny inanimate workers like a 10-megabyte software or microchip. 

This would surely hurt because as small and lifeless their antagonist is, they stood no chance against technology. Machines are ruthlessly powerful, clinically efficient.  

Thousands of Kenyans have either been laid off or consigned to joblessness as employers turn to advanced technologies to cut cost and improve efficiency. A tough business environment, which has seen profits dry up, has compelled firms to innovate.

Britam, which issued a profit warning, is among dozens of publicly listed companies that have either plunged into loss or are expected to. 

“We are not just shrinking for the sake of shrinking, it is more of increasing efficiency,” Barclays Kenya Chief Executive Officer Jeremy Awori told The Standard in a recent interview.

True, much of the country’s unemployment might be related to fluctuations in demand and supply or a factory has inadequate raw materials so most of the machines remain underutilised.

However, employers through their umbrella body do not think that the unemployment rate in the country is entirely due to fluctuations in demand and supply.

This is why some employers think a good chunk of the country’s unemployment is as a result of industrial re-organisation as machines replace manpower in the economy or what economists call structural unemployment.

The result, as captured by the University of Nairobi lecturer Dr Joy Mueni in a past interview, is a situation where the economy is growing, but unemployment is not abating.

Kenya is experiencing what is known as jobless growth.  This is because most of the country’s growth is ICT-driven, with computers and other machines snapping up all the jobs.

According to a report by the World Economic Forum, 18.4 per cent of all formal sector employment in Kenya occurs in occupations with high ICT intensity. “Jobless growth is not unusual if there is automation. In fact, firms use recession to decide which jobs can be automated to reduce costs.

“Once recovery comes, firms are not eager to pick up new workers. That is the reality of modern economy and we must learn to live with it,” says University of Nairobi lecturer XN Iraki.

Silicon Savannah

For every ten people in Kenya, six have smartphones. This has significantly contributed to the growth of Nairobi as Africa’s Silicon Savannah.

But there is a cost to this tagline.  

In the Terminator series, the antagonist is SkyNet who Connor says spread into “ordinary computers in office buildings, dorm rooms; everywhere.” SkyNet’s operations were performed by servers, mobile devices, drones, military satellites, war-machines, androids and cyborgs.

Kenya has its own SkyNet: Smartphone. It is virtually everywhere. It is virtually everything.  

With a high mobile internet penetration, the Smartphone is as good as a banking hall, a consultation room, a classroom, a market for fresh produce and second-hand cars from Japan, a travel agency, a watch, a newspaper, a real estate agent…it is everything.

A day before Britam went public with its intention to slash its workforce and leverage on technology, employers through their umbrella body Federation of Kenyan Employers (FKE), decried a lack of marketable skills in the Kenyan labour market.   

“The skills instability stems from the fact that many jobs in the region are becoming more intense in their use of digital technologies,” said FKE Executive Director Jacqueline Mugo, who doubles up as the Secretary-General BusinessAfrica, an umbrella-body for all private employers in Africa.

A 2017 survey done by the World Economic Forum found that 52 per cent of work activities in Kenya are susceptible to work automation, ahead of those in Nigeria (46 per cent), Ethiopia (44 per cent) and South Africa (41 per cent).

And with data from Kenya National Bureau of Statistics showing that there were about 2.5 million Kenyans engaged in various work activities by 2017, it means 1.3 million of these people are at risk of losing their jobs to automation.

There has also been some mechanisation in Kenya’s biggest employer - agriculture. In 2016, some multinational tea firms introduced harvesting machines, placing the livelihoods of thousands of tea-pickers on the line. Tea growing employs more than 83,000 people. The machines collect 20 times more tea per day than manual pickers. This saw tea pickers though Central Organisation of Trade Unions (Cotu) lobby to have the machines withdrawn.

“Some leaders in the previous government in cohorts with tea companies schemed to introduce tea plucking machines. But the time has come to reverse the retrogressive trade practice,” said Cotu Secretary-General Francis Atwoli.

Some of the sectors that are prone to this technological whirlwind, according to FKE, include but are not limited to, finance, agriculture, education and training, manufacturing, construction, transport and logistics.  But employees in the banking industry have been the hardest hit by advanced technologies.

About 3,000 bank employees lost their jobs as mobile phones and Europay, Mastercard and Visa Point-of-Sale (P.O.S) registers used in agency banking replaced bank branches and automated teller machines (ATMs) in 2016 and 2017.  In 1996, one bank employee served 60 customers. Twenty years later, one employee served 1,209 customers, a testimony to the rate at which the banking sector has embraced technology.

In 2016, those who were affected the most by digitisation in the banking sector, according to the Central Bank of Kenya (CBK) Bank Supervision Annual Report 2016, were supervisory and clerical and secretarial staff whose numbers reduced by 9.01 per cent and 12.05 per cent respectively.

However, management and support staff in the banking sector increased.

 “This is an indicator of the banks’ improved efficiency as a result of automated processes hence reducing the number of required supervisory and clerical and secretarial staff,” said CBK in the report. A 2017 report by management consulting firm McKinsey indicated that such physical work as supervision that is unpredictable as well as physical jobs that are predictable can easily be automated.

McKinsey looked at over 50 countries, including Kenya. “Activities most susceptible to automation include physical ones in predictable environments, such as operating machinery and preparing fast food,” read part of the report.

“Collecting and processing data are two other categories of activities that can increasingly be done better and faster with machines,” added the report. The consultancy noted that automation will have a lesser effect on jobs that involve managing people, applying expertise, and those involving social interactions.

“Jobs in unpredictable environments — occupations such as gardeners, plumbers, or providers of child- and elder-care will also generally see less automation by 2030,” said McKinsey.

So, if your work is repetitive and predictable, sooner than later Judgement Day will be upon you. In other words, you will be declared redundant. Section 2 of the Employment Act, 2007 defines redundancy as the loss of employment, occupation, job or career by involuntary means through no fault of an employee.

“Redundancy may arise under various circumstances including but not limited to the practices commonly known as abolition of office, job or occupation and loss of employment,” says Oraro advocates, a law firm that specialises in commercial law. If today, you can book your hotel and air-ticket online, then the travel agent has to be innovative, otherwise, they might have to close shop. And with more insurance firms creating applications to help people apply for insurance policies online, few people will see the need to approach an insurance agent or walk into an insurance office to do the paperwork.

If as it is — and with some improvement on e-commerce infrastructure — you can buy some goods from Tuskys Supermarket online via online marketplace Jumia and get them delivered to a place of your choice, then interactions with cashiers in supermarkets will get limited.  

If you are reading this article in a digital format —a PDF version of the newspaper or on our website, then you should know that there are a lot of people involved in the production of newspaper whose source of livelihoods are on the line, thanks to your digital preference. 

Changing patterns in the production, packaging and consumption of news has forced traditional news organisations to restructure, a situation that has seen hundreds of workers put on the chopping board. The publishing industry has not been spared. Listed publisher Longhorn Publishers Ltd in July 2017 said it would send home an unknown number of employees by August, betting big on technology.

Group Managing Director Simon Ngigi, in a statement on July 10, 2017, said the restructuring process was informed by emerging challenges affecting the publishing industry in Kenya.

“The disruption has necessitated the rethinking of our business model and segmentation to enhance our competitive edge,” said Ngigi, noting that the staff rationalisation and re-alignment exercise would fundamentally enhance Longhorn’s operational efficiency.

Even the Government of Kenya is leveraging on technology to inject much-needed efficiency in its delivery of services to the public.

The Government plans to digitise most of its services, ranging from birth and death certificates to lands registry. Currently, you can get most of the Government services on e-Citizen.

You can renew your passport and driving licence on this portal. The Government’s vision of having everything digitised has been given impetus by the pressure to reduce its ballooning wage bill.

Although there might not be any political capacity to send redundant home, it is likely that older civil servants that retire may not be replaced.  Automation does not necessarily result in job losses.

“Labour intensive jobs are good if there is high unemployment like in Kenya. But automation while destroying jobs creates high-value jobs, better paying and frees us to focus on high valued jobs,” says Iraki. But deliberate steps have to be taken to prepare people for these so-called “high valued jobs.”

Youth unemployment

Even as modern technology has consigned millions of young Kenyans to joblessness, slowly but surely building up a dangerous heap of youth unemployment, policymakers’ efforts have been lacklustre.  Connor, would not vouch for such a policy: “I should have realised it was never our destiny to stop Judgement Day, it was merely to survive it, together.”

The solution is not to fight technology, but adapt. In a capricious environment where things changed overnight, adaptability is the best skill institutions of learning can imbue in students. Google, a company that Fortune magazine has ranked as number one most desirable place to work for six years in a row, ranks adaptability above any other skill.

Laszlo Bock, head of people operations, at Google once said in an interview: “What we hire for is not so much expertise or experience as learning ability.” The McKinsey report adds: “All workers will need to adapt, as their occupations evolve alongside increasingly capable machines.” But the changes have to take care of jobs for the self-employed.