Kenyan workers rate stability over pay, shows survey

Deloitte East Africa CEO Sammy Onyango speaks during a meeting for small and medium enterprises in Nairobi last year. FILE 

By Victor Juma

Posted  Thursday, April 11  2013 at  21:26

In Summary

• Deloitte found that employees don’t attach as much premium on remuneration as is widely perceived but are mostly influenced by the working environment.

Kenyan employers, looking to attract and retain quality workers for longer, should quit focusing on remuneration in favour of job stability and ease of doing daily tasks, a new report on employee satisfaction says.

The report published by business advisory firm Deloitte is the product of last year’s survey that set out to identify the best companies to work for in Kenya.

Deloitte found that employees don’t attach as much premium on remuneration as is widely perceived but are mostly influenced by the working environment — especially the future of their careers and the working environment.

Respondents in the survey, which polled 5,000 people working for 16 Kenyan companies, ranked compensation as the least important of the 10 factors used in selecting a company to work for.

It, however, found that most were generally concerned about the work environment and the long-term viability of their companies, signalling intense fear of unemployment in an economy where jobs are hard to come by.

“People want to be assured that their company will still be around years down the line,” said Heineken Nienaber, a director with Deloitte’s consulting practice in South Africa.

Deloitte’s 2012 Best Company to Work For survey interviewed employees of British American Tobacco, Old Mutual, Pan Africa Life and Total Kenya. Others were Nation Media Group, Kenya Women Finance Trust, and East African Breweries, ranked third, second and first based on employee feedback.

(Read: ‘Nation’ third best firm to work for in Kenya)

Mr Nienaber said 85.4 per cent of the respondents cited job security as the most important factor in assessing a prospective employer, scoring the highest marks among the 10 benchmarks used.

High rate of unemployment and the destitution that comes with it are cited as the main drivers of the quest for stability and job security. Long-term survival of companies has become particularly critical in the wake of recent mega corporate bankruptcies and retrenchments caused by poor management, slow economic growth and financial turmoil.

The difficult economic environment in which most businesses have found themselves in the past six years has meant that any employee who loses his or her job stays out of employment for long periods of time making everyone want to work for stable firms.

The Deloitte survey found that companies perceived as having strong fundamentals and positive growth prospects are among the most sought after in the labour market.

In Kenya, a number of banks, airlines, and oil marketers have in the past one year retrenched workers, rendering hundreds of people jobless.

Retrenchments pose a particularly daunting challenge to its victims because it takes more than a year to find similar or better paying jobs.

In the US, for instance, most retrenched workers are able to find a new job in an average of six months and those taking longer are usually deemed to have given up on job hunting.

Kenya’s unemployment rate officially stands at 40 per cent but is thought to be much higher, sparking fierce competition for available jobs between experienced workers and fresh graduates.

Kenya’s private sector generated only 47,000 jobs in 2011, down from 56,000 the previous year, underlining the country’s bourgeoning job crisis.

(Read: Private sector jobs dip as growth declines to 4.4 pc)

The Deloitte survey found that for most workers, ability to do their job and employers’ willingness to ensure operational effectiveness through the provision of training and equipment came second after stability in the list of priorities.

More than 81 per cent of those surveyed cited operational effectiveness as the second most important factor linking to an employer’s ability to delight workers and reduce frustration in daily tasks. Job satisfaction came in third with 77.5 per cent of the respondents citing it as a key consideration in staying with an employer.

“Workers are saying that they want meaningful work and the tools they need to do it. This is what makes them look forward to going to work on a daily basis,” Mr Nienaber said.

Other factors cited by respondents as important are good relations with the manager/supervisor, integrity of the company, inclusion, recognition of performance, work-life balance, and career development in that order.

Remuneration was ranked as the least important factor in choosing or staying with an employer having been picked by a paltry 42.7 per cent of respondents as a key motivator.

Thirty-seven per cent of workers think remuneration is of little importance while 19.6 per cent were unsure of its value in choosing an employer.

“Remuneration is not as simple as it seems. It is a complex matter and how it is structured determines its effectiveness,” Mr Nienaber said. “The intangible is far more important than we would like to believe,” he added.

How the remuneration package is structured also matters. The survey found that some employees prefer a large salary with little other benefits while others would want a competitive salary and a number of other extras such as free lunches and bonuses.

The question of how to compensate workers has vexed Kenya’s corporate executives, especially with the rise of the so-called Generation Y that is highly creative, ambitious, independent minded, and restless.

Aside from salaries, companies have introduced other benefits including gym club memberships, free lunches, and more time off to retain staff. In Kenya, a more recent addition to the remuneration package is the employee share ownership or share grants that enables workers to own shares in firms they work for at a discounted price or for free.

These share plans usually have a vesting period of three to five years and are mostly allotted to top performers, motivating them to stick with the employer for longer.

Employees with ownership in companies they work for are expected to improve their performance having a stake in its profits and losses.

Some of the blue-chip firms that have implemented ESOPS or share grants include Safaricom, East African Breweries, KenolKobil, Athi River Mining, AccessKenya, Scangroup and Equity Bank.

The battle for quality talent in Kenya has seen employee-related expenses rise significantly — especially for services sector firms — locked in tight race to attract and retain top performers.