• Job seekers should be flexible enough to explore available opportunities
About 800,000 people join Kenya's job market each year, further increasing the hordes of unemployed.
In 2021, the formal sector, which consists mostly of government, the corporate sector, industry and NGOs, created less than 200,000 jobs. This was 19 per cent of all jobs created in the country, according to data from the Kenya National Bureau of Statistics. The rest of the jobs were created in the informal sector, which is characterised by low wages, lack of employment contracts and long working hours.
The government has been encouraging jobseekers to shift into self-employment. Critics say the government is shifting the responsibility of creating jobs to the very people in need of jobs. As the youth consider their options, it's worth looking at the advantages and disadvantages of being employed or starting a business.
1. Financial security: The biggest advantage of being employed, especially in the formal sector, is earning a steady, predictable salary. In business, income is erratic for new entrants. The steady income that comes with a salary allows one to take loans for building a home, buying a car or for family emergencies. Financial institutions rarely give personal loans to the self-employed, fearing the borrowers will be unable to pay back the money.
2. Business can fail: Most new businesses do not survive the first two years. Not everybody succeeds in business. Available evidence suggests that personal and household characteristics can have an important impact on survival in self-employment as they have a direct impact on a person's motivation, ability, effort and risk-taking. For example, more years of education as well as learning more about one's business before starting may significantly increase survival prospects.
3. Specialisation: While in formal employment, your duties will be restricted to your area of expertise. If you are an accountant, nobody will order you to pick a jembe and get busy in the garden. In self-employment, you'll be responsible for either doing or overseeing just about everything that needs to be done. You can get bogged down in tedious activities that you don't enjoy but which must be done. As an entrepreneur, you must find money to pay the rent, electricity, power and even smaller things like stationery and supplies.
4. Independence: As a business owner, you are the approving authority! You don't need a board of directors meeting to change your marketing plan. You don't have to write a memo justifying your business expenses. You can come and go as you wish. You can engage suppliers without worrying about procurement procedures. Remember that power comes with responsibility. Nobody will ask you why you are showing up at 10am, but business success is directly linked to how much effort you put in.
In today's economy, both the employed and the self-employed have to struggle to get an income. The two paths have their pros and cons, but neither is greater than the other. Job seekers should be flexible enough to explore available opportunities, whether in employment or business. That's the only way to find out where you fit.