One in every four employed Kenyans is running a side hustle in an effort to meet growing household demands as salary increments lag the rise in cost of living, according to a new survey by Old Mutual Holdings.

The survey shows more Kenyans are turning to side hustles to improve their financial wellness, with the number of those moonlighting growing to 26 percent from 20 percent a year earlier.

Notably, a quarter of the side hustles paid better compared to the main full-time jobs held by employees, eroding loyalty to employers. This has seen the number of Kenyans who are constantly worried about losing their jobs fall to 47 percent, which is 4 percent lower compared to 2024.

“Entrepreneurship for Kenyans is their superpower. This is how people are making sure that they can meet their financial requirements. This is how they're increasing their income,” said Vuyokazi Mabude, Head of Knowledge & Insights at Old Mutual.

Real wages of Kenyans have been declining for the last five years as the increase in salaries lagged the rise in cost of living, as per data from the Kenya National Bureau of Statistics (KNBS).

Besides stagnant pay slips, statutory deductions have increased in the past two years, including a 1.5 percent housing levy, a 2.75 percent contribution to the Social Health Insurance Fund, and higher deductions to the National Social Security Fund.

“Employees have realised that contract employment is not paying them as well as they're getting from alternative employment. So, what you're likely to see is that there's going to be fewer loyal people,” said Tabitha Njuguna, a lecturer at Strathmore University Business School.

“They will give just the basic minimum for the employers and from there give their high skill time or focus to their side hustle,” she added.

A bulk of Kenyans, 46 percent, were classified among the sandwich generation, who not only provide for their children but also have to take care of elderly and sometimes ailing parents. This resulted in only 37 percent of Kenyans saving for retirement.

The sandwich generation, which largely entails the millennials, was, however, warned that they are likely to be the last generation to accept the burden of their parents. They should thus plan for their retirement without banking on their children.

The Old Mutual findings are in tandem with an Ipsos Survey released last week, which showed the gig economy – which refers to short-term contracts or freelance work as opposed to permanent jobs - was $1.03 billion (Sh133 billion).

The survey showed Kenyans were now more optimistic about the future, having adjusted to their current economic status. Financial satisfaction among Kenyans rose to 5.9 points out of a score of 10, up from 5.2 in 2024.

Part of the optimism arose from Kenyans who said they had developed financial plans to deal with their debt status, with some restructuring of their loans.

The optimism was also pegged on improving macro-economic conditions, such as the lowering of interest rates and payment of government pending bills, which had allowed contractors to repay outstanding obligations.

In 2024, most people downgraded their living status so as to accommodate financial strains. Some of the status shifts included changing the schools children attended, purchase of cheaper products at the shopping malls with emphasis on price rather than brand. The number of those who downgraded remains flat, indicating the change was permanent and not erratic enough to be reversed.

Last year, households retained the status they had shifted to, signaling that the downgrade was permanent.

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