Now Hiring: The Logistics Industry and Unemployment in Kenya

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May 21, 2014

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Recent figures put the unemployment rate in Kenya at about 16 million Kenyans lacking formal employment, up from about 12% in 2006. This sad state of affairs has seen the government work towards rectification, with the recent relaunch of Kenya’s ICT sector, projecting 180,000 new jobs created in this sector by 2017. So what role do we in the logistics industry play in stimulating our economy through job creation?

The most direct way in which logistics continues to help create jobs is through globalization. With several supply chain management firms expanding into regions outside their countries of origin, employment opportunities within the logistics industry is on the rise. This applies to both foreign nationals native to the company’s country taken along to the new location, as well as local staff in the country where a firm is launching operations. With the arrival of new countries feeding the logistics industry in the recently acquired territory, locals may also be inspired to form their own companies, as there will have been a proven market for the services.

Logistics also encourages job creation through outsourcing. Companies are increasingly focusing their attention on reducing costs to broaden their profit margins. To this end, a booming logistics company will likely opt to outsource some services or activities, rather than incur the cost of recruiting, training and maintaining full time employees. This creates employment opportunities for manual or low-skilled jobs such as warehouse positions as well as skilled or white collar jobs such as clearance, and other internal functions. With the current pace of innovation, product life cycles are getting increasingly shorter, with new products out every day that render previous incarnations obsolete by performing the same task faster and more efficiently. An obvious example of this would be the cell phone market: before you have a chance to settle into your hot new device, something faster, slimmer and shinier has emerged. This means products are being replaced faster, putting additional shipping demands on supply chain management firms, thus raising the need to expand workforces through outsourcing.

Photo credit: Business Daily

Photo credit: Business Daily

This need for extra staff at reduced cost is not limited to large companies seeking to expand. Smaller logistics firms may also need to acquire new staff to meet a temporary spike in demand.  In such circumstances, say, a supply chain management firm delivering goods over the festive season will need the extra personnel to deal with increased orders but will likely be unable to maintain these employees during off peak months. Here, and in logistics firms dealing with seasonal crops and so forth, temporary employment will be created for staff taken on to keep operations proceeding smoothly.

The logistics industry also provides employment through the concept of logistics clusters. These can be defined as interconnected businesses providing the full spectrum of supply chain management services, from transport, warehousing, freight forwarding and so on, reaching vertically to include manufacturers, retailers and distributors. This interconnectivity creates the possibility for clients to receive fast, efficient logistics services at lower costs than via contacting individualized companies. This dynamic not only creates employment, but also provides job security through a strong local network that is not reliant on one company or industry, meaning it is secure from changes that may adversely affect individual companies.

As our national anthem encourages, let all with one accord, In common bond united, build this our nation together. Are you doing your part?


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