NAIROBI, Kenya – Kenyan businesses are taking a cautious approach to workforce expansion in 2025, with 60% of companies indicating they do not plan to increase their staff this year.
This signals a more pessimistic outlook amid economic uncertainties and rising operational costs, heightening concerns over unemployment and job market stagnation.
The latest Kenya National Chamber of Commerce and Industry (KNCCI) Business Barometer Report, based on responses from nearly 2,000 businesses, paints a sobering picture of the country’s employment landscape.
Key industries, including retail and wholesale (26%) and mining (14%), expressed limited optimism regarding new hires, citing a challenging business environment and rising costs.
“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 increases, and with higher expenses, the ability to hire more workers is diminished,” said Kiplimo Kigen, a researcher at KNCCI.
Earlier today, KNCCI launched the KNCCI 2025 Business Barometer report at Serena Hotel, Nairobi. The report measures the expectations of businesses in 2025. We spoke to 1981 businesses across the country. See below highlights: 1. 60% of the surveyed businesses are not looking…
Economic analysts warn that this cautious hiring trend could exacerbate youth unemployment and underemployment, further straining household incomes and economic stability.
Despite weak hiring projections, 65% of businesses anticipate modest revenue growth in 2025, driven by an expanding customer base and increased adoption of technology.
The education (69%) and energy (67%) sectors remain the most optimistic about workforce expansion, bucking the broader trend of cautious hiring.
“Most businesses expect to leverage technology and see some positivity in macroeconomic indicators like interest rates and inflation. There is hope these factors will create a better operating environment,” Kigen added.
However, the overall optimism has waned compared to late 2024, with 24% of businesses expecting stagnation or revenue declines.
High costs of living, rising taxation, and an unfavorable regulatory environment remain significant barriers to growth.
More than 55% of businesses anticipate increased primary input costs due to poor macroeconomic conditions and government policies.
