This archive report was first published on 9 July 2021.
Kenyan SMEs adapt to Covid-19 disruptions through outsourcing ¶
When Kenya recorded its first positive case of the Covid-19 in March 2020, firms were forced to make quick changes in the way they deliver services and interact with their customers in line with the advisory to reduce social contact.
Services firms took their business online, while those dealing in physical goods had to invest in last-mile delivery infrastructure to serve their housebound customers.
The result was the adoption of remote working and outsourcing of services, opening new opportunities for the information communication and technology (ICT) and logistics sectors.
A new survey by Kepsa, done jointly with the Ajira Digital Programme, shows that ICT experts and logistics personnel are the most sought after by small and medium enterprises (SMEs) since the outbreak of the virus.
The survey targeted 322 small businesses in 29 counties with a response rate of 79 percent.
Logistics remains the most outsourced service among the businesses interviewed at 65.5 percent followed by branding personnel at 64.8 percent and ICT (61.3 percent).
Some 24 percent of the businesses surveyed said they outsource driven by the need to increase efficiency, followed by 20 percent whose staff lack the capacity for particular tasks and 17 percent outsource in a bid to cut costs.
Companies have since set up remote working platforms or strengthen the existing ones, increasing the need for ICT support services.
Trading firms such as supermarkets have also scaled up home deliveries for their customers, increasing the need for logistics services and couriers for customers keen on having products delivered at their doorstep.
SMEs spend between Sh100,000 and Sh500,000 a month for outsourced ICT services and logistics personnel and services, making them the highest paying of all outsourced professionals.
However, outsourced services for office deliveries and messengers top the list of those taking home the lowest pay per month.
The survey shows that 56.9 percent of small businesses spend less than Sh50,000 per month to outsource messengers and office delivery service providers, followed by logistics at 51.7 percent and accountants (47.1 percent).
