Private sector innovations catalyze youth employment

By Jillian Slutzker

February 18, 2016

Globally, nearly 73 million youth are looking for work, according to the International Labour Organization. For private sector companies, these youth represent 73 million untapped opportunities for innovation and growth.

“Youth are tomorrow’s workers and innovators and buyers. It is imperative that we implement and scale effective youth workforce programs,” says Katy Vickland, Practice Area Director of Workforce Development and Youth Employment at Creative Associates International.

Vickland adds that for Creative and other development implementers, private partners, including larger companies, such as McKinsey and Walmart, and thousands of local small and medium size businesses “are critical partners in preparing youth for employment through relevant curricula, internships and other means.”

Growing economies through youth employment

Empowering youth with skills companies need and then placing them in sustainable formal sector jobs not only benefits employers and youth, but also boosts developing economies as a whole, said experts at a “Private Sector Approaches to Improving Youth Workforce Systems” event at the Society for International Development Feb. 9, moderated by Vickland.

“It’s imperative to be able to answer the question of development…to be able to answer some of the questions on youth employment,” said Eniola Mafe, Program Manager of the Niger Delta Partnership Initiative, which works with market stakeholders to increase youth employment across three key value chains in Nigeria’s Niger Delta.

In this oil abundant region, more than 60 percent of residents live below the poverty line. Despite the oil industry, unemployment is high, especially for those aged 15 to 35 (which is 60 percent of the population).

By tapping into other value chains, such as fisheries and cassava farming, as well as giving youth the skills and resources to enter those fields and make informed economic decisions, Mafe said, the regional economy can be strengthened.

Additionally, first formal sector jobs are often the stepping stones youth need to either “move up or move out to other opportunities,” which benefits the economy at large, said Adam HemphillDirector of Global Government Affairs at Walmart, whose Women’s Economic Empowerment Initiative is training nearly 1 million women globally in workforce readiness.

More than entrepreneurship, integrating into market systems

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The Afghanistan Workforce Development Program has placed more than 27,000 graduates in new or better formal sector positions. Nearly 36 percent of those trained, placed or promoted are women. Photo by Michelle Tolson.

For technical and vocational training programs to succeed, panelists agreed, curriculum must be tailored to the needs of the market. Private sector companies are critical partners, identifying their workforce needs and committing to hiring trainee graduates.

In Afghanistan, for example, Creative’s Afghanistan Workforce Development Program has partnered with 2,060 private sector employers to identify skills gaps and prepare prospective employees with those skills.

The program, which is funded by the U.S. Agency for International Development, has placed more than 27,000 graduates in new or better formal sector positions in healthcare, business administration, the construction industry and more.

As a holder of two task orders under the USAID YouthPower IDIQ, Creative is also engaging youth, communities and the private sector across Central America to develop at-risk youth workforce development and citizen security services.

“Even in extremely challenging environments such as Afghanistan or Central America, focusing on solving employer needs by engaging them in program design generates results and paves the way for their long-term involvement and funding,” says Vickland.

Yet many training programs fall short, panelists noted, by providing young people with entrepreneurship training and expecting them to create their own economic opportunities, without taking stock of the larger economic environment.

As Mafe said, “If the system isn’t set up for entrepreneurship, we’re doing youth a disservice.”

Rather than expecting youth to “entrepreneur themselves” out of “big ticket issues”, such as corruption or poverty, training providers and employers should examine the market constraints that keep youth from entering the formal sector and then design training and placement programs to overcome those, she said.

Entrepreneurship programs, said panelists, need to be strengthened to ensure youth have access to financing, mentors and secure buyers through linkages with existing supply chains.

Evidence needed to scale up

With 73 million youth looking for work globally, private sector employers and vocational training providers are seeking solutions to youth unemployment that can be replicated and scaled.

“The reality is that [most programs] support hundreds, maybe thousands of young people annually, but rarely do they support millions,” said Mona Mourshed, who leads McKinsey’s Generation initiative, which aims to close the gap in global youth unemployment by placing disconnected young adults in jobs, and giving them the skills and support needed to succeed. Generation is the first program of the McKinsey Social Initiative, a nonprofit dedicated to innovating to solve complex social challenges.

The program, explained Mourshed, is building an evidence base that can “make the return on investment case” to businesses and youth, and therefore lead to greater scale of successful youth employment solutions.

Generation has identified key activities performed in a first job that are critical to success. If navigated well, said Mourshed, the moments can catapult a youth into further career success. If botched, these “breakdown” moments can mean stagnation or dropping out of the formal economy. Generation is training youth with “the behavior skills, technical skills and mindsets you need to navigate those breakdown moments,” said Mourshed, and is providing mentorship for their first three months of work.

The program plans to longitudinally monitor the success of its graduates for up to 15 years, tracking job attrition, income growth, health outcomes and more.

By charting the return on investment in youth employment solutions for young people, employers, communities and countries, the program seeks to prove that investing in sustainable workforce solutions for this generation is a win-win and a boon for economic growth.

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