Engagement in the Business Process Outsourcing (BPO) sector has grown exponentially in the last few years, with revenue marking USD262 billion and the African market continuing to gain market share. This industry is estimated to hit the USD2 trillion mark in revenue within the next few years. Among Kenya’s goals for Vision 2030 is the recognition of BPOs and their potential contributions to the GDP. Given that the deadline for actualising this blueprint is fast approaching, we see that the BPO sector can increase the opportunities for employment tenfold, with its contribution to Kenya’s economy being set at approximately 10%. Such employment opportunities have been tailored toward capitalisation on the expectation of an influx of foreign direct investment in the BPO sector.

In a bid to diversify and better prepare Kenyans to embrace the BPO sector, the Kenyan government established the Ajira Programme to assist its citizens in accessing digital and remote jobs. The programme also offers various trainings and workshops tailored to specific employment opportunities.

Legal recognition of BPOs in Kenya

Given the growing demand for BPOs in Kenya, regulations must be established within this sector. Proposals have been made to amend certain laws to properly recognise BPOs. For a start, there are proposals to amend certain parts of the Employment Act. An example would be that there is a need to redefine the definition and an employee to include a person who performs his duties remotely or on-site within a business process outsourcing arrangement or an information technology-enabled service. This would also necessitate a need to broaden the definition of an employer to encapsulate persons, companies, or organisations that employ individuals either on-site or remotely and would include an agent, foreman and managers. There is also a proposal to insert the definition of a BPO to mean the act of transferring the recurring internal activities and decision rights of an organisation to a third-party service provider as set out in a contract. This insertion would help to formalise the BPO sector within the Kenyan legal framework.

Additionally, a new tax base would ease the burden experienced by those in the formal employment sector. It could encourage local outsourcing and foster clearer governance of outsourcing arrangements, though it might require balancing flexibility with protections to avoid discouraging investment in the sector. In formalising the BPO under the Employment Act, there would be a cushion in the form of legislation that would protect workers in the BPO sector.

While we see the potential of BPOs to create employment in different sectors like customer service, information technology (IT), and administration, there is the worry that defining BPOs under the provisions of the Employment Act may bring to light issues in outsourced jobs. For example, in instances where engagement in the work is on a temporary basis or if they are offered lower wages or fewer benefits than permanent employees of the company.

BPOs and gig workers

BPO firms supply skilled professionals for tasks, cutting costs and boosting efficiency. Alternatively, firms can hire directly through staffing agencies for similar benefits. This piece compares direct hires and BPO, offering insights for decision-makers.

BPOs are not necessarily under the control of the formal employment sector as the staff are under the contractual obligations of the BPO/ staffing agencies. This would mean that the terms of engagement are based on the negotiated by the BPO being hired to offer, for example, IT services, thereby creating a mechanism of protecting the individuals tasked with carrying out the actual work.

On the other hand, there are Gig workers who are engaged in a need for service. The gig economy is rising globally as people seek freelance work and side jobs. This has been fuelled by increased access to technology and internet connectivity. However, the introduction of BPOs within the laws would challenge this. For example, in the provision of benefits such as leave, healthcare and other benefits, BPOs are better placed to offer such to their pool of professionals in exchange for conformity to certain traditional employment practices. This would take away from the independence that gig workers have enjoyed for the longest time. Lastly, companies may opt to outsource from reputable firms rather than freelancers, forcing them to opt into BPOs due to the lucrative opportunities they offer.