Youth Unemployment: Innovation for job creation: who will crack the code?

The world of work is changing. These changes are driven by a range of factors, including increasing competitiveness of the global labour market, generational shifts in the workplace and the accelerating rate of technological advancement. While the changing world of work has created opportunities for inclusive economic growth, it has also amplified challenges like skills shortages and the digital divide, entrenching poverty and inequality. In response to this, innovative approaches to job creation need to be implemented at scale. This was the subject of an expert panel discussion held during the Trialogue Business in Society Virtual Conference 2020, moderated by Trialogue MD Nick Rockey.

Broad-based solutions centred on collaboration are key

Panellists taking part in the discussion agreed that the changing world of work can be a springboard for sustainable development. However, this can only happen through innovative solutions centred on collaboration.

“To begin with, funders need to be intentional about supporting human capital development, skills development and innovation in job creation,” said Onyi Nwaneri from Afrika Tikkun. Done right, this can enable training providers to deliver skills development programmes that ensure job readiness and demand-driven training, and develop the character and confidence of young people. Government also has a role to play in incentivising employers to take calculated risks and reform HR practices to accommodate young job seekers.

From a business perspective, it is important to create opportunities for youth through work placement opportunities and mentorship. This includes breaking down barriers for start-ups, which are the biggest job creators. In addition, youth themselves need to be committed and motivated to take advantage of whatever opportunities are available to them.

Examples from practice

A number of role players have invested in job creation for youth. An example of this is non-profit Afrika Tikkun. The organisation leverages 26 years of experience and works to reduce youth unemployment by tackling the socio-economic drivers that make it difficult for young people to break out of the cycle of poverty. Afrika Tikkun achieves this through its Cradle-to-Career 360˚ model. This is an integrated set of programmes that supports education, personal development, career development, nutrition, health, skills development, and ultimately the work placement of identified young individuals. Programmes are focused on meeting South Africa’s developmental priorities. They are also aligned with the Sustainable Development Goals (SDGs), in particular SDG 1 (ending poverty) and SDG 8 (securing decent work).

Similarly, the Jobs Fund is an initiative whose objective is to co-finance projects that will significantly contribute to job creation. The initiative was set up in 2011 with an initial capitalisation of R9 billion and a target to create 150 000 jobs. The Jobs Fund has now fully allocated the initial R9 billion to 151 partners across all sectors and regions of the country, delivering 181 000 permanent jobs in the process. In addition, the Jobs Fund has increased the pool of funding available to beneficiaries by catalysing private-sector funding. For each R1 provided by the Jobs Fund, an additional R2 has been crowded in from third parties that include corporate and civil society.

The Jobs Fund has a long track record of successful initiatives, among them Black Umbrellas, Riversands Incubation Hub and the Mercedes-Benz Learning Academy. It has also supported the Sernick Group and Urban Agriculture Initiative. “The last two examples demonstrate the important role technology can play in bringing young people into the agricultural sector. The Jobs Fund also supports social enterprises such as Smart Start and Harambee. This shows job creation can be combined with social impact,” said Dr Fidelis Hove of the Jobs Fund.

The Youth Employment Service (YES) is aimed at assisting South African youth to gain work experience through job placement. It is innovative in that it is an operational plan between government and business. “The job market is very competitive and open to highly skilled individuals. This is in contrast to the South African reality, in which 40% of our young people grow up in homes without a working adult, and we see 54% of South African youth going into the labour market without a matric certificate,” said Tashmia Ismail-Saville, CEO of YES. It is for this reason that YES focuses on breaking youth into the job market. This allows them to experience the dignity and confidence boost that comes with that first job opportunity. It also allows them to get de-risked through work experience.

Since its launch in 2018, YES has created 40 000 work opportunities. This translates to R2.16 billion in salaries going into the economy through youth wallets. The rate of participants permanently absorbed into the workforce through YES varies between 21% and 30%. For youth that are not absorbed, the CV and reference letter they gain from having participated in the programme is massive currency and helps them to secure future opportunities. This is in line with peer-reviewed research, which shows that a CV and reference letters have an important impact. For women, the chance of getting a job within three months of active searching is doubled. Global research and trends also show that employers will hire from the pool of the employed, or someone who has been recently employed, because it is a marker of productivity.

Lessons learnt

The Jobs Fund’s Enterprise Development funding window has been running for nine years and some important lessons have emerged from the programme, including the importance of needs-based and comprehensive support packages for SMEs. “Stakeholders need to focus on growth sectors, make sure entrepreneurs are properly screened, and provide different entry points for different kinds of youngsters based on their needs and abilities. The second thing to focus on is the strengthening of non-bank microfinance institutions such as savings groups to target marginalised sectors of our society,” said Dr Hove.

This is in line with experience from the YES programme. Opportunities have been created because there is a sustainable model and business gets something for their investment. Reduction in red tape and policy certainty also seem to be motivators for business and facilitate the creation of entry-level jobs. This means that, with the right policies in place, business will play along and can contribute to sustainable job creation that targets marginalised youth.

An additional lesson is the importance of integrated and holistic programmes. “Companies should implement structured and integrated programmes, cut down on intermediaries and ensure resources get to beneficiaries,” said Ismail-Saville. It is also important for businesses to build SMEs into the supply chain and link to programmes such as YES to business strategy. Combining broad-based empowerment with strategic objectives will result in real transformation. This is a key imperative, given that poverty and inequality will affect business in the long-term.

The Covid-19 pandemic has forced the acceleration of digital transformation and a restructuring of the labour market. People must now unlearn skills they have previously acquired, reskill themselves, or upskill out of necessity. While it is impossible to predict the magnitude of the impact of the pandemic on the future world of work, the only way to bridge the skills gap and start seeing innovation in job creation is through collaboration and thinking out of the box. No one sector will solve this alone. Partnerships are critical.

Article was written by Connie Huma