Kenya Commercial Bank Group has announced that it is offering a voluntary buyout program for employees considering early retirement as the bank accelerates its transformation strategy.
The employee buyout program which was approved by the board of directors on Thursday is expected to save an estimated 2.0 billion shillings per annum and should recover buyout costs within a period of 18 months.
The program is expected to align the competing needs of adapting to a banking industry whose outlook has been dimmed by legislative and regulatory reforms, and fast-evolving technology platforms that are now attracting non-traditional players into the financial services sector.
“At the beginning of this year I shared with our employees our vision to accelerate our market leadership in each of the markets we operate in today,” said Mr. Joshua Oigara, Group Chief Executive, and Managing Director.
“In 2016, we invested 2.5 billion shillings in upgrading our technology infrastructure among other projects meant to secure our future. This is a strategic initiative that will help us simplify our operations, reduce our expenses, stay closer and much connected to our customers and boost returns to our shareholders,” he added.
The buyout package offers generous severance terms comparable with industry and labor law stipulations, a notice payout of at least three months and family access to medical insurance cover for the rest of the year. Other benefits include loan rebates that will see 25 percent of the outstanding staff loans balances paid off and the remainder to continue at staff rate for six months.
The staff will be required to provide a loan repayment proposal on the remaining loan balances. Staff will be paid their pension dues in accordance with the trust deed and rules of the pension scheme.
“We understand that this is a big decision taken by our company and one that will have an impact on some of our staffs’ personal lives,” said Mr. Oigara. “In line with this, we are offering comprehensive training workshops that will cover personal financial planning, entrepreneurship, business management and other important areas to employees who volunteer to ease the transition.”