Staff dilemma for firms amid falling productivity

The rise in the quit rate has been called the "Great Resignation." [iStockphoto] Businesses seem to be in a catch-22 situation on how to motivate their employees and win back contractors in a bid to increase their productivity. As businesses work to recover from the effects of the Covid-19 pandemic, they are now confronted with a new challenge of falling output amid a looming recession and the seemingly uncontainable wave of technology that glorifies the gig economy. And the traditional classroom set-up of keeping tabs on workers by taking the register is no longer a viable option for getting the best out of workers. It is a dilemma that employers under the aegis of the Federation of Kenya Employers (FKE) have raised concerns about. "In 2021, while the output of employed persons in South Africa and Egypt was Sh5.9 million ($49,250) and Sh6.9 million ($57,628) respectively, it was Sh1.4 million ($12,340) in Kenya," said FKE Chairman Dr Habil Olaka. "Kenya's productivity is not only low, (but) it is also decreasing," Dr Olaka added, indicating that while in South Africa and Egypt, labour productivity grew by 3.4 per cent and 1.6 per cent respectively, it fell by 2.0 per cent in Kenya. "We cannot effectively compete with this level and type of productivity." It may, therefore, be time for businesses to rethink how they define productivity. Showing up at work every day by 8am and leaving at 5pm may no longer be a measure of productivity in the post-Covid era. A report published by the International Labour Organisation (ILO) and compiled by FKE titled The Next Normal: The Changing Workplace in Kenya alludes to this inevitable change for businesses. "The vast majority of enterprises said the virus made them rethink how they should measure the productivity of their workforce, with nearly 80 per cent saying they would focus on outputs as their key measure of productivity moving forward," reads the July 2022 report. "More traditional measures such as the time spent in the office may be falling out of favour. Very few enterprises noted that they were closely monitoring the number of hours that employees spent working." The report says some businesses have already redefined the kind of worker who will drive them into the new era. DIGITAL SKILLS For starters, the worker of the future needs to have digital skills. Others are soft skills like creativity, how well they can communicate, the level of teamwork and collaboration, multitasking, and flexibility. "Few employers view networking and language skills as vital in the years to come," the report reads. These changes in skills and knowledge, the report says, have been a major factor pushing enterprises to rethink productivity. Yet one of the reasons why productivity might be low, according to employers' expectations, has everything to do with the businesses' instability as a result of economic headwinds. For example, the extent to which individuals lost their livelihood during the Covid-19 pandemic, particularly in the hospitality sector might have made being in employment not as attractive as before. The report notes that due to the Covid-19 pandemic, companies were forced to rethink many aspects of their businesses, from human resources to sales channels to their product portfolio. "Enterprises have seen resizing, sub-contracting, branch closures, halted projects and reduced investments. Workers have experienced forced retrenchment, compensation changes, and remote working," the report adds. Sadly, most businesses and employers see the situation not getting better soon owing to the expected recession. The 2022 KPMG East Africa CEO Outlook Survey notes that in preparation for anticipated recession, at least two in every 10 CEOs in East Africa have frozen hiring and another five are planning to implement a freeze in the short term. Also, five in every 10 CEOs are considering downsizing their employee base in the short term. The survey notes how CEOs in the region are slowly transitioning from what has been perceived to be old ways of supervising workers to the post-Covid era that embraces a hybrid working environment. In the midst of this transition, CEOs also want to attract and retain the best talent. According to the survey, even as business leaders are slowing down on hiring due to the expected recession, most of them (85 per cent) anticipate a growth of five per cent in their headcount. This increased headroom, as the survey notes, is for the purpose of attracting and retaining the right talent for the future of their businesses. "Among operational priorities planned over the next three years include, adopting employee value proposition to retaining the necessary talent, advancing the digitisation agenda and increasing measures to adapt to geopolitical issues," reads the survey published last November. It adds: "Out of five operational priorities to achieve growth objectives over the next three years, East Africa CEOs rated employee value proposition to attract and retain talent top."

Staff dilemma for firms amid falling productivity

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