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Employers face dilemma over political uncertainty

As the country strives to navigate out of the current divisive political environment and economic uncertainty, a number of businesses are facing difficult employment related decisions while trying to guard against liabilities.

For many employers, pay increases and bonuses are no longer an option because to survive the rough terrain, cost-cutting should be the number one priority for many of the organisations affected by the toxic political environment.

Employers are in a fix because withdrawal of contractual perks or reducing pay without buy-in from employees may turn out to be bad idea because the redundancies, forfeiture of bonuses, and pay and recruitment freezes may damage employees’ morale at a time when their motivation needs to be at the top to get their organisations through difficult times.

During these difficult economic times, some other organisations may even be tempted to slash salaries as one way of maintaining a healthy balance sheet. For instance, in 2015, Canada’s slumping oil industry shed tens of thousands of jobs in Alberta alone.

The country’s largest independent oil producer, Canadian Natural Resources Ltd., decided that rather than lay off any of its workforce of 7,600, it would reduce salaries by up to 10 per cent in Calgary and Aberdeen, Scotland, with the biggest cuts absorbed by higher-salaried employees.

Perminus Wainaina, Corporate Staffing Services managing partner and head of recruitment observed that political uncertainty has slowed down business with the crunch being experienced in the recruitment and retention processes in labour markets.

The crisis has also significantly affected the economy that forced most employers to retrench than hire. “While most of the workforce lost their jobs, those that remained experienced longer working hours for the same or slashed salary. The long-term effect of retrenchment will be felt in slow productivity especially as the country tries to recover from the economic pinch,” he said.

To add salt to injury, most companies have lost many man-hours in the last eight months since the political campaigns started in March and it is going to be difficult for them to recover the lost time.

Wainaina said because of the depressed economy, most employees stand to miss cash incentives and compensation for overtime they have been getting in the past when the country enjoyed political stability and economic boom. Equally, others will likely miss out on paid leave and an eventually decreased minimum wage ahead of the December festive season. He advised employers to be hands-on when dealing with employees who may be affected by loss of bonuses and other contractual benefits.

According to Wainaina since Kenya is often marred by violence, tribal affiliation, financial and property loss during electioneering, it is prudent as an employer to take a hands-on approach to establish the emotional well-being of your employees.

“Not only does this gesture make your employees feel cared for but it further emphasises their value to you as an employer and to the organisation,” he said. Similar sentiments were expressed by the Executive Director of Institute of Human Resource Management (IHRM) Dorcas Wainaina.

She said that according to their estimates, organisations have lost more than 100 labour hours, something that has affected productivity and will eventually cost employees some of the contractual perks and benefits they have been enjoying in the past.

“These include the voting days, public holidays, and the days chaos couldn’t allow workers to safely get to work or left work early to be safe. This lowered productivity,” she said. This, Wainaina said, means that in most organisations there may be no annual salary increments, Christmas parties and the 13th month bonuses if given may be at reduced rate. She advises that employers would benefit from an engaged workforce if they show empathy.

“An employer should, if they do not have such policies in place, support an employee whose house was burnt down for example by financially contributing to support them as they get on their feet,” Wainaina said. She said when an employer shows care, the employees in turn go out of their way to perform as a way of appreciating a good employer.

“Employers have a brand to protect and how they come through in society would determine their survival,” added Wainaina. Federation of Kenya Employers (FKE) warned last month that the current political uncertainty in the country has taken a huge toll on the labour sector. Executive director Jacqueline Mugo said many businesses have closed shop while some have incurred heavy losses, as hundreds of workers continue to lose their jobs.

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