Why Most Kenyan Companies Will Not Hire In 2025: Report

The report, which gathered responses from nearly 2,000 businesses across the country, came amidst concerns about unemployment levels

Marvin Chege Marvin Chege
Feb 5, 2025 - 12:15
0
Why Most Kenyan Companies Will Not Hire In 2025: Report
Job seekers holding up placards. /FILE

60 percent of Kenyan businesses do not expect to hire more employees in 2025, depicting troubling times ahead on the road to addressing the unemployment crisis in the country.

The Kenya National Chamber of Commerce and Industry (KNCCI), during the launch of its 2025 Business Barometer report at Serena Hotel, Nairobi on Tuesday, February 4, revealed eight business sectors that were likely to put a hold in terms of recruiting a new workforce.

These sectors included retail and wholesale, professional services, hospitality and tourism, manufacturing and processing, transport, financial services, and mining.

The report, which gathered responses from nearly 2,000 businesses across the country, came amidst concerns about unemployment levels, as slow job creation could further strain an already struggling labour market.

Long queues of job seekers in their hundreds wait to hand in their documents at county hall in Nairobi, Kenya. /NATION MEDIA GROUP

“At the end of the day businesses have to match whatever deductions are being made to the employee, this means that the cost of doing business, the expenses increase for these particular businesses, and then the ability to hire people with increased costs is not likely,” said Kiplimo Kigen, a researcher at KNCCI.

According to KNCCI President Erick K. Rutto, high taxation, unfavourable government policies, and limited access to capital were identified as the biggest obstacles to the growth of Kenya’s private sector in 2025. Businesses remain concerned about these factors and their potential to hinder economic progress as well as the overall competitiveness of the business environment.

Although unemployment remains a concern in the eight sectors, the education, healthcare, and Information Communication and Technology (ICT) industries are optimistic about increasing hiring in 2025.

The negative outlook on workforce growth contrasts sharply with last year’s surveys, where only 47% of respondents anticipated a workforce reduction in Q4 2024, and just 25% in Q3 2024. Financial limitations are also hindering businesses' ability to implement climate change mitigation and adaptation strategies. While 43% of surveyed businesses have adopted such measures, 85% have done so without any external support.

Nonetheless, economic analysts caution that persistent hesitation in business expansion could exacerbate youth unemployment and underemployment, further straining household incomes and overall economic stability.

“Because of the shrinking disposable incomes that have faced the businesses and individuals over the last 1 or 2 years, that has also trickled into the numbers we are seeing. The 65% of businesses are not able to expand their workforce,” Churchill Ogutu, an Economist, said.  

Tags: