WINDS OF CHANGE

Employment or Entrepreneurship?

When the legendary Oprah Winfrey says, "Luck is preparation meeting opportunity, " most of us don't get its depth. Especially for us, the youths in a struggling economy like ours. Contextually, Kenya's main population comprises youths - with the biggest percentage joining the skilled and unskilled job market. This is coupled with hundreds of thousands of graduands churned out every year by the many universities and colleges spread across the country. And with Kenya's unwritten hiring philosophy, you've definitely heard before, "That Mr. X is too young to retire!". Or is it "Mr. X is too experienced to be replaced!". Well, let's compare it vis-a-vis the employment opportunities available locally.


Against this mounting pressure on the skilled and unskilled pool available for jobs, the current absorption has only been disappointing and, of course, fueled by the COVID-19 pandemic. Instead of seeing top companies hiring in droves, the opposite is happening. Of current concern is how the tech giants like Amazon.com, Twitter, and Facebook are announcing mass layoffs within the last week alone. For instance, Amazon has announced a planned retrenchment of over 10,000 workers, while Twitter has already let go more than 1,000 following its takeover. And I'm sure you also noticed the Chief Executive Officers (CEOs) are also not spared at times from getting the Memo!


Here in Kenya, you've seen both the National and County Governments cautioned by the Auditor General and the Controller of the Budget on the need to cap the wage bill below a certain percentage of the budget. Do you know what that means? The government and its agencies will only hire those essential positions, creating a hiring freeze. On the other hand, it will be way easier (already is) for a county government to fire an employee through the many schemes at its disposal. Some of the being suspension for investigations into their conduct, several claims of 'ghost workers,' redundancy of certain positions, among others.


Okay, let's make it as relatable as possible. When you undertook to study Medicine and pharmacy then, you were guaranteed a job. Because all the doctors you knew were in stable employment, right? Now, many Medicine and pharmacy graduands are surviving on internship opportunities for over five years with no end in sight. Then some of us went to do education with the promise of guaranteed employment by TSC. When was the last time you saw TSC advertise over 5,000 vacancies in a year? Don't you know someone who graduated as early as 2012 and who's yet to be absorbed into TSC?


Another spanner in the works is how global geopolitics today, more than ever, will affect your job or prospects of getting one. I'm sure you've seen how a war in Ukraine happening thousands of kilometers away has affected your budget from the food you eat, fuel prices, and access to other accessories. For a company faced with these setbacks affecting their cashflows, supply chains, and in some cases, revenue streams, they more often than not pass the heat to the employees. So you'll find that instead of advertising those planned vacancies, they will make them redundant. And in fact, they will affect mass layoffs.

Here's the reality for you. Suppose you're running a company (for example, Valuable Homes Ltd) of, let's say. In that case, you and ten employees are hit by cashflow challenges such as increased prices of supply materials, fuel prices skyrocketing for logistics, and maybe one of the company income streams is car dealerships. Then you wake up to new regulations forcing the car dealership to close until you comply fully, and you have to spend an extra 30% on fuel, supplies, etc. Assuming these new changes put you in a situation where you can no longer sustain 5 of your employees, chances are you'll let them go.


Shareholder returns and profit maximization reigns supreme way above the company's resolve to have you employed or salaries raised. There are associated challenges, no doubt. But so are they in employment! And that's why I always believe that entrepreneurship is the only way to hedge against all these possible eventualities.


Regards,


Victor Wambani

Founder Valuable Homes (valuablehomes.co.ke)