Firms resume hiring, raise salaries amid costs increase

Graduates queue for job interviews. FILE PHOTO | NMG

By CONSTANT MUNDA
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Companies shrugged off biting cost pressures to resume hiring and marginally raise salaries in March to support sales and improve customer engagements, findings of a monthly

private-sector survey suggest.

Stanbic Bank Kenya’s   Purchasing Managers Index (PMI) found overall employment in agriculture, manufacturing, construction, wholesale and retail, and services sectors grew at the fastest pace in four months.

Hiring had slowed in February as firms reacted to low orders at the beginning of the year, largely on the back of a short-lived scare of Omicron variant of Covid-19, while staff costs had dropped in January and February.

“Whilst modest overall, the pace of growth (in employment) was the fastest since November last year and above the average since the survey began in January 2014. Where staffing capacity increased, this was linked to higher sales and efforts to improve firms' client services,” analysts at Stanbic Bank and American analytics firm, S&P Global, wrote in the PMI report for March.

“Where staff pay did rise, this was mostly linked to efforts to motivate workers. The vast majority of respondents reportedly kept wages unchanged since February.”

This came despite the overall private sector activity having slowed down in March, undermined by rising input costs that were partly driven up by Russia's invasion of Ukraine.

The S&P Global Kenya Purchasing Managers' Index (PMI) fell to 50.5 in March from 52.9 a month earlier. The 50.0 mark separates growth from a contraction in activity.

Firms last month endured the sharpest growth in costs of inputs and general expenses for running businesses in eight years, the report shows, citing worsening global supply chain disruptions following sanctions on Russia over its brutal war in Ukraine.

Some firms also blamed the runaway costs, the highest since January 2014, on increased taxation and levies.

The additional costs were passed onto consumers, with several firms resorting to stockpiling supplies such as fuel, fertiliser and foodstuffs such as wheat in fear of further inflation and shortages.

cmunda@ke.nationmedia.com