Kenyan businesses are set to access subsidised artificial intelligence-powered human resource tools following a new partnership between global HR software firm Factorial and the Kenya Private Sector Alliance (KEPSA).
The partnership aims to accelerate the adoption of digital workforce management systems among Kenyan companies as firms grapple with rising operational costs, productivity challenges and growing pressure to remain competitive.
The collaboration will be supported through Factorial’s USD 10 million AI Acceleration Fund, which will finance up to 50 per cent of the implementation cost for the company’s AI-powered HR agent for eligible businesses.
Speaking during a KEPSA members’ breakfast meeting in Nairobi, KEPSA Director and Lineplast Group Managing Director Mary Ngecha said Kenyan companies are increasingly being forced to rethink workforce management strategies amid economic pressures and evolving business demands.
“Our private sector is currently under pressure to manage short-term cost pressures amidst executing our long-term growth strategy,” she said.
Ngecha noted that the manufacturing and services sectors collectively account for about 76 per cent of Kenya’s Gross Domestic Product (GDP), making workforce efficiency a critical pillar for economic growth.
“For us, as the private sector, we have to come up with new ways of attracting, managing and maximizing the productivity of our workforces,” she said.
She added that companies must shift away from manual processes and fragmented systems in favour of integrated digital platforms capable of improving visibility, efficiency and decision-making.
“We need to remain a regional leader, and workforce productivity needs to be our national priority,” Ngecha said.
The partnership comes at a time when Kenyan businesses, particularly small and medium-sized enterprises (SMEs), are under increasing pressure to digitize operations while controlling costs.
According to World Bank data, SMEs dominate Kenya’s business landscape, with more than 80 per cent of employees working in the sector. The segment contributes nearly 40 per cent of the country’s GDP, making it a key driver of employment and economic activity.
Factorial is targeting organizations employing between 20 and 2,000 workers, positioning its cloud-based platform as a solution for firms seeking to streamline HR and business management operations.
The software offers tools for recruitment and onboarding, employee performance management, learning and development, project management, payroll integration, expense tracking and compliance management.
The platform also integrates with Microsoft and Google products while offering audit trail capabilities and ERP and payroll solutions designed to improve transparency and operational efficiency.
Factorial’s Director of Expansion Strategy and Partnerships, Francesc Rul·lan, said many Kenyan firms continue to lose productivity due to disconnected systems and inefficient administrative processes.
“Many organizations in Kenya continue to struggle in terms of productivity, efficiency and competitiveness due to fragmented processes,” he said.
“In order to accelerate the digital transformation and unlock productivity gains, adoption of modern technology in HR is essential,” he added.
The company said it has established a local office in Nairobi to support implementation and provide on-the-ground technical assistance to Kenyan clients.
Kenya will also serve as Factorial’s regional hub for expansion into the wider East African market as the company seeks to deepen its presence across Africa’s growing digital economy.
The deal highlights the growing role of artificial intelligence and cloud-based enterprise software in reshaping workforce management across Africa, with businesses increasingly turning to automation and data analytics to improve productivity and reduce administrative burdens.
For KEPSA, the partnership aligns with ongoing efforts to help businesses modernize operations, strengthen competitiveness and improve resilience in a challenging economic environment.
