Saturday 05th September, 2026 11:33 PM|
Kenya is turning to labour productivity as it seeks to bring down the cost of its public workforce, shifting the wage-bill debate beyond salaries and allowances to how effectively government employees deliver public services.
The Salaries and Remuneration Commission (SRC) says labour productivity should be a key strategy for achieving the 35 per cent wage-bill-to-ordinary-revenue target, as the number of public-sector employees continues to rise.
The move follows a meeting of the steering committee implementing resolutions of the Third National Wage Bill Conference, which reviewed progress on reforms aimed at improving the sustainability of Kenya’s public wage bill.
The committee “recommended the adoption of labour productivity as a key strategy for achieving the 35 per cent wage bill to ordinary revenue ratio,” the SRC said in its Second Quarter Wage Bill Bulletin for the 2025/2026 financial year.
It also committed to convening the First National Productivity Conference in 2026, bringing together stakeholders to discuss ways of improving productivity and develop action plans.
Wage bill remains above target
The productivity push comes as Kenya remains above its statutory wage-bill benchmark. The SRC bulletin says the wage-bill-to-ordinary-revenue ratio stood at 43.3 per cent in the 2023/2024 financial year and was estimated at 40.4 per cent in 2024/2025, against the 35 per cent target.
The bulletin’s long-term data puts the 2024/2025 ratio at 40.64 per cent, while the total public-sector wage bill was estimated at Ksh1.246 trillion. That gap gives productivity a bigger role in the debate because reducing the ratio can come through stronger revenue growth as well as tighter control of employment and compensation.
Moreover, the SRC data also shows that Kenya’s public workforce has been expanding. Public-sector employment rose 3.1 per cent in 2024 to 1.023 million people, crossing the one-million mark for the first time in the period covered by the bulletin.
The Teachers Service Commission was the largest public employer, with 410,700 employees, followed by ministries and other extra-budgetary institutions with 236,700 and county governments with 226,500.
Productivity meets pay pressure
The SRC’s approach does not remove the pressure created by salaries and other employment costs.
During the second quarter, the commission received 84 requests from public institutions covering allowances and benefits, collective bargaining negotiations, job evaluations and salary structures, and productivity and performance. Twelve requests concerned productivity and performance.
The bulletin says requests relating to allowances, collective bargaining negotiations and bonus or financial rewards had an estimated cost implication of Ksh4.03 billion, while SRC advice during the period had a cost implication of Ksh2.31 billion.
The commission also points to the structure of the public workforce as an important part of the wage-bill equation.
“While staff numbers influence the wage bill, the level of remuneration (the quantum per employee) is an equally significant determinant,” the bulletin says.
That distinction means Kenya’s wage-bill challenge is not solely a question of how many people the government employs. The cost of each employee also matters.
Essential services complicate cuts
The government faces limits on simply reducing public employment because much of the wage bill is concentrated in essential services.
Education accounted for 59.66 per cent of the wage bill across the Medium-Term Expenditure Framework sectors in 2024/2025, while governance, justice, law and order accounted for 26.23 per cent. The SRC identified education, health, security and uniformed services as major drivers of the public wage bill.
The commission said these sectors are expected to continue recruiting staff to meet global minimum standards.
That leaves productivity as a potentially important part of the longer-term effort to improve the relationship between public-sector employment, government revenue and service delivery.
For Kenya, the next phase of wage-bill reform is therefore likely to be measured not only by whether compensation costs fall relative to revenue, but also by whether a growing public workforce can deliver more with the resources available.
The SRC’s planned productivity conference puts that issue firmly on the policy agenda, with the commission seeking strategies and action plans to improve productivity while pursuing the 35 per cent wage-bill-to-revenue target.
