Kenyan banks have successfully negotiated for a reduction in the salary paid to entry-level employees.
The Kenyan banks will now pay Sh. 50,000 salary for entry-level positions after getting into an agreement with the banking industry union, Banking Insurance and Finance Union (BIFU).
The banks say that the reduced salaries will allow them to hire more workers.
According to Kenya Bankers Association chief executive officer Habil Olaka, the new salaries will be a reduction from the Sh. 82,000 that was previously paid to entry-level employees.
“We have revised it down from Sh. 82,000 to Sh. 50,000 and this enables banks to get more staff at the entry level. We will actually see the number of employees in banks moving much higher,” Olaka told a local daily.
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“We usually have CBA negotiations with the union, and this year, we actually hit a milestone in terms of reducing the minimum entry point for workers.”
According to the Central Bank of Kenya (CBK), the banking industry had a record 36,107 jobs as at end of 2022. A majority of these jobs are made of secretariat staff.
As at the end of 2022, secretariat staff were estimated to be 4,005 up from 2,498 in 2021.
Kenya National Bureau of Statistics (KNBS) data released in December 2022 showed that 39.6 per cent of the employees in the insurance and financial sectors — which include banks and insurance firms — earned over Sh. 100,000 per month in 2021.
Of the 2.9 million employed Kenyans, 310,884 earned above Sh. 100,000 monthly in the period under review by the KNBS.
This represented 12.37 per cent of the total workforce, a share that analysts reckoned nearly matches Kenya’s consumption patterns. At the same time, the number of workers earning over Sh. 100,000 jumped 15 per cent or 48,000 more to 358,833.
The State statistics agency notes that the earnings or wages cover all cash payments, including basic salary, cost of living allowances, and profit bonus, together with the value of rations and freeboard, and an estimate of the employer’s contribution towards housing.