In a bustling office complex in Nairobi, data workers spend their days reviewing content for a major social media platform. Like many of their colleagues in Kenya’s growing Business Process Outsourcing (BPO) industry, they face daily challenges that highlight the nuances facing global labour markets, technology, and worker rights. Kenya’s BPO industry is presenting as a key partner in achieving the country’s digital transformation goal and playing a key role in creating jobs for its growing youth population. Yet, a closer look highlights the inefficiencies plaguing the sector.

Data workers have voiced concerns about job security, fair compensation, and mental health support, while companies struggle to remain competitive in a global market dominated by established players such as India and the Philippines. This tension between worker protection and business sustainability demands innovative policy solutions that can help Kenya chart its own path in the global digital economy.

Understanding the challenge

The heart of the matter lies in how we define and protect digital labour in today’s rapidly evolving tech space. Data workers in Kenya often find themselves in a legal grey area. This predicament leaves them vulnerable to sudden contract terminations and without standard worker protections. On the flip side, the challenges facing Kenya’s BPO industry run deeper than they might first appear. BPO operators have pulled back the curtain on their operational realities, revealing a complex web of economic pressures and market dynamics.  A closer look reveals that these operators face competition not only from local players but also from established firms in countries like India, the Philippines, and Singapore. These companies, with decades of experience, boast robust infrastructure and economies of scale that Kenya is still developing.

The bidding process itself illustrates the industry’s precarious position. When international companies, particularly from the United States and Europe, put out tenders for data processing or content moderation work, they often pit BPO providers against each other in a global auction. For Kenyan companies, still in their market infancy with most being less than five years old, the pressure to underbid is intense. Adding to these challenges is the volatile nature of contract terms. Many international clients offer only short-term projects, sometimes lasting just a few months. This creates a ripple effect: BPO companies, unable to secure long-term contracts themselves, cannot offer their workers stable, long-term employment arrangements. The industry also faces a significant skills gap challenge. While basic data processing jobs might be readily staffable, more demanding projects requiring specialised skills often go to competitors in other countries. 

Learning from global examples

The Philippines, which generates $30 billion annually from its BPO industry, provides an interesting case study. Despite facing similar challenges initially, the country has managed to build a more sustainable industry model. Its parliament is currently considering 10 different bills aimed at protecting BPO workers while maintaining industry growth. These bills show how government intervention can help balance worker protection with business interests.

Charting a path forward

Rather than viewing worker protection as a burden, BPO companies can use it as a stepping stone to build a more sustainable industry. This might start with voluntary industry standards that go beyond basic legal requirements. Companies could collaborate to establish minimum wages, mental health support programmes, and career development pathways. Government support will be crucial in this transformation. Tax incentives, training subsidies, and infrastructure support could help offset the costs of better worker benefits. The industry could also focus on developing specialised niches where Kenya has competitive advantages. Instead of competing solely on cost, companies could target more demanded services that require specific language skills or technical expertise. This approach would justify better compensation and working conditions while making the industry more resilient to global competition.

Reimagining regulation for the digital age

The conversation around regulating Kenya’s BPO industry requires a paradigm shift. Traditional employment laws, designed for the 9-to-5 office worker, might not fit the dynamic nature of digital labour. What’s needed is an approach that recognises and embraces the unique characteristics of modern work while ensuring basic worker protections. Consider the nature of remote work and gig employment. These arrangements offer flexibility, allowing workers to manage their time, take on multiple projects, and work from anywhere. 

Traditional employment regulations, if applied blindly, could actually restrict these freedoms. For instance, classifying all BPO workers as traditional employees might require fixed working hours or physical presence in an office, effectively eliminating the flexibility that attracts many to this field. This balanced approach could help Kenya’s BPO industry mature while protecting its workforce, ultimately creating a more sustainable and equitable digital economy that could serve as a model for other emerging markets.