State House has lifted a five-year hiring freeze in parastatals, offering relief to thousands of jobless Kenyans in an economy where companies are shedding jobs.
Head of Public Service Joseph Kinyua has issued a circular to principal secretaries, Cabinet secretaries and CEO of parastatals informing them that State-owned firms are free to hire without having to seek approval from the executive office of the President.
But the parastatals must still receive board approval and confirmation in writing from the Treasury that they have the budget for the new staff.
State-owned firms keen on hiring are required to get their human resources manuals approved by the State Corporations Advisory Committee (SCAC) — which offers advisory to the government on the running of parastatals.
The Treasury had frozen hiring and restricted promotions to curb further ballooning of the wage bill in an environment where tax collections continue to trail targets
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The lifting of the freeze is a boost for job seekers, especially the more than one million young people who graduate from colleges and universities annually in an economic setting that is plagued by reduced hiring on the back of sluggish corporate earnings.
“State corporations with approved Human Resource Instruments will henceforth be exempt from the requirements of the Circular of 28th July 2017 and can therefore recruit staff, including replacement of staff in line with the State Corporations Advisory Committee approved staff establishment,” said Mr Kinyua in the circular dated February 7, 2022.
Parastatals in the energy sector like KenGen, Ketraco and the Rural Electrification and Renewable Energy Corporation (REREC) will benefit most from the hiring order.
Energy Cabinet Secretary Monica Juma had on November 8 petitioned Mr Kinyua to maintain the freeze in parastatals under her ministry.
But Mr Kinyua overlooked the petition through the February 7 memo.
“The recruitment should, however, only be undertaken upon alignment with the approved human resource instruments and possession of written confirmation of requisite budgets for the recruitment and sustainability thereof from the National Treasury (as well as) existence of board resolutions approving the recruitment.”
The 2017 government moratorium on recruitment had restricted new hires to essential services such as security, health and education.
Mr Kinyua said several agencies had carried out reforms, including human resource audits to warrant new recruitment.
“It has…been noted that several State corporations have achieved a good level of compliance,” he said.
The freeze led to a 9.1 reduction in workers employed in State-owned firms over the five years from 157,100 to 142,800.
The order comes as Kenya recovers from the effects of Covid-19 economic hardships, which in 2020 cut the number of formal jobs for the first time in two decades.
This reflected the struggles of the economy that also shrank for the first time since 1992 on the back of coronavirus-induced shutdowns and restrictions.
Official data showed the economy shed 187,300 formal jobs in the year ended June 2020, marking the first time since 2001 when some 18,300 salaried workers were struck off payrolls.
The loss of formal jobs was more pronounced in the private sector, which laid off some 206,700 workers in a period businesses faced a tough operating environment, including reduced operating hours as a result of a nighttime curfew and travel restrictions to contain the pandemic.
The number of wage employees in the private sector dropped below 1.86 million in June 2020 from more than 2.06 million a year earlier.
Since March 2020, many businesses have been unable to take more workers due to the economic problems caused by the Covid-19 pandemic, with many resorting to staff lay-offs or wage cuts to survive.
Half of jobless Kenyans have also given up looking for work, official data show, disheartened by reduced opportunities.
The latest data by the Kenya National Bureau of Statistics (KNBS) covering the quarter ended March 2021 shows that 1.23 million out of the total of 2.49 million jobless Kenyans aged between 15 and 64 — and who qualify for the labour force — were not actively looking for employment.