Kenyan companies are increasingly turning to casual and temporary workers to keep operations running, according to the Stanbic Bank Kenya Purchasing Managers’ Index (PMI) report. The April 2026 Stanbic PMI report shows that employment increased for the 15th consecutive month, even as overall business conditions remained under pressure.
The report shows that firms mainly relied on short-term and casual hires, indicating a cautious staffing approach during a period marked by elevated operating costs and softer customer demand.
Stanbic PMI Shows Employment Remains a Bright Spot
According to the Stanbic PMI, employment emerged as one of the strongest areas in the April survey, standing out against continued declines in output and new business.
While overall private sector activity contracted for the second month in a row, firms continued to add workers, largely on a temporary basis.
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Survey respondents cited ongoing customer projects and planned business expansion as the main reasons for hiring.
Many firms said casual labour helped them meet workload demands and deliver projects on time without committing to long‑term employment contracts.
The report shows that by hiring temporary workers, companies were able to keep their businesses running and handle project work, even though demand remained uncertain.
Cost Pressures Shape Hiring Decisions
The move towards casual hiring is closely linked to the rising cost pressures facing Kenyan businesses.
Firms reported higher operating expenses in April, with fuel prices and transport costs emerging as the main drivers of increased costs.
These higher expenses squeezed profit margins and made it more difficult for companies to absorb costs without passing them on to customers.
At the same time, rising prices weighed on customer spending and new orders, leaving firms uncertain about the strength and sustainability of demand.
As a result, many businesses became more cautious about expanding their permanent workforce.
The April headline PMI reading of 49.4, which points to a second consecutive month of contraction in overall private‑sector activity, reinforced this caution.
Because output and new orders remained weak, firms avoided hiring permanent workers, thereby reducing long‑term wage and benefit costs. Instead, they chose casual workers to meet staffing needs while keeping costs under control.
By relying on temporary workers, firms were able to keep operations running, meet project requirements, and respond to short‑term increases in workload without committing to fixed employment costs.
The PMI suggests that this approach also gives businesses the flexibility to adjust staffing levels quickly if demand weakens further or operating conditions deteriorate.
In this environment, casual labour has become a practical option for firms seeking to manage costs while maintaining activity.
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Why Wage Growth Remains Subdued
Despite the rise in staff numbers, the Stanbic PMI shows that wage and staff cost pressures remained modest in April. Labour costs increased only marginally during the month, reflecting the nature of the hiring taking place.
The report shows a discrepancy between the number of people being hired and rising wages. Most of the new jobs were casual or temporary, as firms avoided permanent roles that come with higher pay and long‑term benefits.
As a result, labour costs stayed low even though more workers were hired.
This suggests that while companies are still creating jobs, they are doing so carefully, opting for flexible arrangements rather than long‑term employment commitments.
The Stanbic report suggests that casual hiring has become a key strategy for Kenyan private firms navigating a difficult operating environment.
By relying on temporary labour, companies can sustain activity, support expansion plans where possible, and manage risk during a period of contracting output and fragile demand.
While employment continues to grow, the report indicates that job creation is increasingly weighted towards short‑term arrangements, pointing to continued uncertainty across the private sector.
