Information technology and human resources in Kenya:the banking sector

Abstract

This study investigated the impact of information technology (IT) on work organization, productivity change and employment using a hybrid of descriptive and analytic methodology. In particular, a labour demand function and a flexible cost functional' form was specified for a single-product, three-inputs commercial banking firm. Pooled time-series and cross-section secondary data obtained from the firms' balance sheets and other records for the period 1980-1989 was analyzed using seemingly unrelated regression method (SUR) . Both work organization and employment were found to have been affected. The technology was found to be labour-saving and capital-using without compromising competitiveness of the innovating firms. Decreases in costs due to computerization were, however, found to be small in magnitude and not statistically different from zero at the 5% level of significance. This was explained by the under utilization of the technology and/or inappropriate information management systems in use. The policy issues arising from these findings are threefold. To protect employment opportunities from IT, an export-oriented production of computer peripherals, especially software housing, is necessary. Secondly, 'innovating firms stand to gain most from the technology if they rely on decentralized, front office type of information systems management. Lastly, people working in highly-information based professions should invest in information technology skills