The government has reversed its previous stance on reducing public service jobs, announcing that retrenchment is no longer part of its plan to tackle the rising wage bill.
Instead, the Treasury will rely on a modernised payroll system to control spending, prevent fraud, and improve efficiency in the management of public sector salaries.
Kenya’s public service has grown to 1.05 million employees as of June, costing Sh1.25 trillion in salaries and allowances during the 2024/25 fiscal year, almost half of the total tax revenue collected.
Last year, officials had promised a sweeping “radical and surgical” overhaul that would shrink the workforce, but the Treasury now says the focus has shifted to reforms that do not involve cutting jobs.
Treasury Cabinet Secretary John Mbadi said the new human resource management system will allow the government to manage the wage bill without retrenchment.
“With the new human resource management information system that we are putting in place, we are going to manage the wage bill at least at the rate at which it is today because I don't see the government having a strategy of or bringing retrenchment as a strategy,” he said.
Mbadi added that the decision was influenced by high unemployment, explaining that the government reconsidered “because already we are having so many unemployed Kenyans.”
The system aims to unify the currently fragmented payrolls across national government entities and counties, making it easier to identify ghost workers and stop wage bill abuse. By removing ghost workers, the government expects to save billions that would otherwise go to unproductive expenditures.
Mbadi highlighted the example of the Ministry of Education, which has recorded Sh4 billion in savings on capitation thanks to a payroll verification system.
During last year’s national wage bill conference, officials had warned of mass layoffs targeting support staff, casual workers, and employees with fake academic certificates.
At the time, it was noted that support staff made up about two-thirds of public service employees, despite a recommended ratio of 70 percent technical staff and 30 percent support staff. This meant that roughly 702,950 of the 1.05 million public servants were support staff, more than double the ideal number.
President William Ruto also expressed concerns about the workforce composition, noting that “The composition of the establishment itself is problematic in that it is seriously skewed towards support staff at the expense of technical and other core-function staff. Clearly, 83 percent of state departments have violated the recommended ratio of technical staff to support services.”
The Treasury acknowledged challenges in rolling out the new human resource system, including resistance from some quarters within government.
Nevertheless, Mbadi insisted the integration process will continue, with all national government entities expected to join by December 31, 2025, and county governments by the end of June 2026.
“We can make our public sector more efficient and manage our payroll so that we eliminate ghost workers in our payroll and that is why we are integrating the payroll now, with the resistance of course from some quarters but they are not going to succeed,” he said.
