More employees in Kenya are expected to be engaged in a ‘virtual workspace’ next year, according to an employment trend forecast by Bowmans.
A virtual workspace is a cloud-based platform that allows users to access their work files and applications from anywhere, at any time. This means they can work from home, on the go, or from a coffee shop—as long as they have an Internet connection.
“We anticipate more employees being engaged in a ‘virtual workspace’ in 2024 and employers will need to consider the legal implications of such working arrangements, with reference to recent case law,” Terry Mwango, head of dispute resolution at Bowmans and Quinter Okuta, an associate at the law firm said in a brief.
Virtual workspaces are preferred by a growing number of employers who are keen on saving costs because they are often cheaper to set up and maintain than traditional office spaces. There is no need to purchase or lease physical office space, furniture, or equipment.
In Kenya, many employers are going through rough times due to high operating costs and cash flow challenges.
A monthly survey by American analytics firm, S&P Global, on behalf of Stanbic Bank showed that the majority of Kenyan firms have frozen expansion plans for the next year.
In monthly surveys done between July and October, a modest two in every 10 companies have reported plans to increase branches, raise output capacity, or add new products in the next year.
The findings of the resultant Stanbic Bank Kenya’s Purchasing Managers Index (PMI) show business confidence among surveyed firms in manufacturing, construction, wholesale and retail, services, and mining has been weak since July.
This has come at a time when businesses are grappling with a record-high rise in input prices in a decade, pressured majorly by fuel and material costs.
About 46 percent of firms that participated in the survey, based on responses to questions sent to about 400 companies, said costs had risen in October compared with the prior month. Firms in the construction sector said the highest growth in input prices but were the most optimistic about growth.
The upbeat outlook for companies in the construction space has come at a time the President William Ruto administration has prioritised investment in affordable housing projects supported by the 1.5 percent levy on workers’ earnings, matched by employers.
“Business expectations for the coming 12 months remained muted in October, with firms showing a modest degree of positivity that was little-changed from September,” analysts at Stanbic Bank and American analytics firm, S&P Global, wrote in the latest PMI report for October.
“The Future Output Index recorded little movement from the previous two readings, although it was still solidly above the survey-low set in April.”
Kenyan firms have since last year been battling rising operating expenses largely due to soaring fuel prices, fast-climbing electricity bills, and costly raw materials as a result of lingering global supply constraints amid persistently weakening shilling against major global currencies and taxation pressures, including the 1.5 percent housing levy on gross payrolls.
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