Young People Navigating the Labour Market Issues facing young people in accessing the labour market

Young People Navigating the Labour Market

Issues facing young people in accessing the labour market

Strategies and challenges related to this: learning from experience

Recommendations and possible interventions
Synthesis of research

Contents

Acronyms 4

Executive Summary 6

1. Introduction 11

2Who are the ‘young people’ struggling to access the labour market? 12

3Issues young people face in accessing the labour market 15

4How do young people find employment 20

And how do they select and retain employment 23

5Employers: recruiting and selecting young people 26

6Policy and Funding Environment 29

a.Framing policies 29

i.The New Growth Path and the National Development Plan 29

b.The Accords 32

c.The Charters 36

d.Other Legislation 36

e.Funding initiatives to support these imperatives 37

i.The Jobs Fund 37

ii.Corporate Social Investment 38

f.Some policy proposals that are being discussed 38

i.Re-directing PIC investments through a Job Creation Index 38

ii.Changes to labour regulation 38

iii.Financial assistance for job search 39

iv.Wage Subsidy (Youth) 40

v.Transport Subsidy 41

g.A summary of the array of policy and programmatic options 42

7Review of the types of interventions generally used to link young people to employment in South Africa and emerging learning 44

a.Interventions: Programmes to address the transition to the labour market 45

i.Secondary School Interventions 45

ii.Work Readiness and Placement programmes 47

iii.Occupational Programmes 52

iv.Entrepreneurial Development Programmes 54

v.Public Employment 57

b.Learning emerging from the SA experience 60

i.Recruit young people who have the competence to cope with the programme 60

ii.Offer information and guidance to learners on what the programme will provide and what opportunities may exist beyond the programme 60

iii.Recruiting young people who are interested in and motivated to take part in the programme 61

iv.Address the relevance of learning programmes 61

v.Providing support to enable young people to access formal employment 62

vi.Providing support to enable young people to initiate an enterprise 62

vii.Ways to design Public Works programmes that meet the needs of youth 63

8Learning from International Experiences 64

9Some Emerging Issues and Recommendations 76

References 84

Include Annexure A

Acronyms

Acronyms

ABET - Adult Basic Education and Training

ALMP - Active Labour Market Policies/Programmes

CA - Chartered Accountant

CRM - Customer Relationships Management

CV - Curriculum Vitae

CWP - Community Work Programme

DFI’s - Development Finance Institutions

DGMT - The DG Murray Trust

DOE - Department of Education

DoH - Department of Health

DoL - Department of Labour

DPRU - Development Policy Research Unit

DPW - Department of Public Works

DSD - Department of Social Development

EMS - Economic Management Sciences

EPWP - Expanded Public Works Programme

ESSA - Employment Services of South Africa

ETDP - Education, Training and Practices Sector Education and Training Authorities

FET/FETC - Further Education and Training/ Certificate

FIETA - Forest Industries Education and Training Authority

GDP - Growth Domestic Product

GED - General Educational Development

GIZ – German Development Cooperation

HR - Human Resources

HSRC - Human Sciences Research Council

IDC - Industrial Development Corporation

ILO - International Labour Organisation

JASA - Junior Achievement South Africa

JET - Joint Education Trust

JIPSA - Joint Initiative on Priority Skills Acquisition

MATRIC - Matriculation (school completion certificate)

MGNREGA - Mahatma Gandhi National Rural Employment Guarantee Act

NARYSEC - The National Rural Youth Service Corps

NEETs - Not employed and not in education and training

NGO - Non Governmental Organisation

NYDA - National Youth Development Agency

NYS - National Youth Service

PES - Public Employment Services

RDP - Reconstruction and Development Programme

SAGDA - South African Graduate Development Association

SAICA - South African Institute of Chartered Accountants

SAIE - South African Institute for Entrepreneurship

SEFA - Small Enterprise Finance Agency

SETAs - Sector Education and Training Authorities

SMME - Small Medium Micro Enterprises

TTO - Triple Trust Organisation

TVET - Technical Vocational Education and Training

UNDP - United Nations Development Programme

UNISA - University of South Africa

UYF - Umsobomvu Youth Fund

YAC - Youth Advisory Centres

YIEPP - Youth Incentive Entitlement Pilot Project

YPED - Youth Professional Entrepreneur Development

Executive Summary

Introduction

Every year the job market is flooded with young new entrants into the labour market. It is these young people who bear the brunt of the economic climate: while there are high national unemployment rates, the rates are even higher among young people.

The paper re-visits the reasons for the problem, and whilst it highlights the challenges related to some of these interventions, however its real purpose is to highlight those which have been effective, with a view to enabling more institutions in the public, private and civil society sectors, to improve their own programmes and services by examining both local and global experiences.
Who are the ‘young people’ struggling to access the labour market?

The primary demographic of the young job seekers is considered in terms of those young people who are between 15-24 and then this is further disaggregated so as to specifically consider the issues facing 18-24 year olds. The report demonstrates that the challenges faced by young people in accessing employment, education or training significantly increases when they reach 18. The immensity of the numbers we are dealing with is quantified in the 2011 census as close to 3.2 million people aged 15 to 24 years old, or about 31% of the 15 to 24 year old population, are Not in Employment or Education and Training (NEET). Of concern is that the total number for NEETs in the 18 – 24 population is at just less than 3 million.

Issues young people face in accessing the labour market?

The first and most important explanation for high levels of youth unemployment is slow economic growth in a context of high structural unemployment and youth, and in particular less skilled youth, were disproportionately affected by the downturn. Further, the level and growth of economic activity has been unable to cope with the supply of new entrants to the labour market.

Some additional issues that impacted youth unemployment can be defined as follows: Youth lack the skills that underpin employability; lack of job experience; lack of mobility and the resources to look for a job; youth with neither a matric nor experience lack a signalling mechanism; lack of personal networks and limited access to information on job opportunities and the challenge of a skills mismatch. There is also limited self-employment. The study suggests that the types of constraints require particular interventions, which are detailed in the main document.
How do young people access the labour market?

The three main employment strategies, or channels, that are pursued by young people are: formal channels, direct application channels and networks. The research suggests that formal channels are more likely to be used by those individuals with higher education/skill levels and possibly some work experience.

The majority of unemployed rely on direct methods: it is stated that ‘place to place’ – that is, that young people literally walk from place to place looking for employment. Research also shows that if an individual comes from a household where individuals are employed, this person is more likely to find employment. Critically these young people have access to contacts in the labour market and can therefore make use of the third channel; that of using networks as a strategy. This third channel is thus reliant on being embedded in a locally defined social network and having a high level of household employment and local contacts.
Policy and funding environment

Government, often working with the social partners, has put in place policies to support growth and employment creation that frame a number of initiatives. These either directly speak to, or include provisions for, supporting youth to effectively transition into the labour market. These initiatives include the five Accords, such as the Youth Accord; the Industry Charters and the BBBEE Code; other legislation such as that relating to employment equity and skills development, as well as broader labour legislation; and specific programmes such as the Jobs Fund.

Employment creation is key to both the National Planning Commission’s National Development Plan (NDP) (2011) and the New Growth Path (NGP) Framework (2010). The NDP highlights a number of areas in which there is a need for interventions that specifically target youth including incentivising the employment of young, unskilled work seekers. They further indicate that there is a need to support small business development and specifically that training should be provided for school leavers and unemployed youth. The NDP also states that there is a need to provide skills development for students currently in school with a focus on grooming an entrepreneurial attitude.
The Youth Accord is the most recent of the Accords, it focuses on the following areas: Education and training; work exposure: public sector measures: youth target set-asides: youth entrepreneurship and youth cooperatives and private sector measures. The other four Accords also have elements, which support youth employment. There are a number of Charters in place as well which emphasise the importance of supporting the development of enterprise initiatives they also have a number of requirements for business to undertake skills development. The BBBEE Code proposes to strengthen the relationship between enterprise and supplier development.
There is also legislation in place that regulates around the issue of employment. The Skills Development legislation, including the Skills Development Levies Act and the associated regulations, has direct impact on youth employability in terms of creating access to meaningful skills development opportunities, particularly those linked to employability. There are also mechanisms to support youth employment such as the Jobs Fund. In addition to government funding imperatives, there is also substantive funding made available by companies through corporate social investment.

The document also notes that there have been additional suggestions made with a view to increasing potential employment and these are described in more depth in the document.

Review of the types of interventions generally used to link young people to employment in South Africa and emerging learning

This analysis found that interventions to address these imperatives could generally be categorised in the following manner:

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  Those that focus on improving the ability of secondary school learners to make a transition into further learning and the workplace
  
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  Those that enhance the work readiness of young people and support the placement of young people
  
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  Those that support the development of occupational competence
  
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  Those that enable entrepreneurial development
  
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  Those that create public employment opportunities.
  

Programmes have been developed in both the public and the private sector that are designed to deal with the issues raised. These include: Secondary school interventions; work readiness and placement programmes; occupational programmes (These are accredited learning programmes which could include learnerships; skills training programmes or apprenticeships); entrepreneurial development programmes as well as public employment programmes.

Learning that have emerged out of the SA Experience

The key learning is as follows: recruit young people who have the competence to cope with the programme; offer information and guidance to people as to what the programme comprises and what opportunities might exist beyond the programme; make sure the young people recruited are motivated and interested in the programme offering; make sure the curricula and course offerings of the programmes in place are relevant; providing support measures to young people to enable them to access employment; assist and support the development of entrepreneurial skills in young people; make sure programmes are developed to meet the skill requirements of the youth.

The review also identified international programmes that had been well documented and that had completed an evaluation that was accessible. In addition an attempt was made to ensure that the programmes were representative of developed, transition (new European countries) and developing countries. Programmes were selected for analysis within this research based on the need to understand how programmes fare in countries that had similar constraints to deal with, and they had reasonable evaluative data that allows an analysis of the effectiveness thereof in addressing constraints.
The learning from the international programmes can be organised into key themes: Targeting Strategies which must ideally be geared to preventing long-term unemployment; providing good information is an effective mechanism for targeting; appropriate selection processes; Programmatic strategies; Outsourced training; A Skills-First Approach; Individual Action Plans; Incentives and Integrated delivery incorporating workplace learning. It was found that the primary messages from these evaluations suggest that there increasingly needs to be a focus on a skills-first approach with strong focus on catching youth before they have been unemployed for an extended period of time, there is a need to have a balance of sanctions and incentives to retain youth in programmes and demand involvement of employers, and there is value in creating a demand-driven market for youth programmes, managed through private sector institutions and NGOs - as long as the conditions are clearly set out and monitored. Finally, the integration of services is effective in consolidating the employability of youth, particularly through on-the-job application of skills and potential placement in sustainable jobs.
Some emerging Issues and recommendations

The key learning is as follows:

Timing - The point at which programmes are implemented is critical. This includes decisions about which grade to target for the intervention. There is also an imperative to catch youth before they have been unemployed for an extended period of time.

Targeting - Programmes should be targeted at specific groups of young people: that is, there must be diverse programmes that meet these varied needs.

Selection - The effective selection of candidates for programmes is a key success factor and different programmes will be effective for different young people.

Information - Information and guidance should be offered to young people about what the programme will provide and what opportunities may exist beyond the programme.

Duration - Programmes, which have a longer duration, and therefore a sustained or sustainable funding source, are more likely to succeed.

Relevance – it is critical to ensure that the programme is relevant for the workplace, for further learning and that young people should be able to see the relevance of the programme for their own lives.

Confidence - programmes needs to focus on building the esteem and confidence of the young person.

Integration - The evaluation shows that for successful interventions, there is a need for multiple levels of integration. This includes integrating theory and practice, as well as services to support the employability of young people.

Institutional Credibility - programmes, which are to attract large numbers of young people, have to have ‘street cred’ and people should know that they work. In addition, the institutions need to have credibility with employers – employers should trust that the young people that they recruit will have the requisite competencies as well as attitude. Institutions that have developed relationships with partner organisations can more effectively refer young people to relevant services, and, bring these partners in to support a particular element of their programme.
The document also cites previous research, which found that there is need to improve the current databases that are in place to support job seeking.
Learning: Key success factors critical to making choices

The report suggests a scenario, which emphasises the need for a sufficient diversity of quality programmes that are targeted effectively and meet the varied needs of both young people and the labour market. The report argues that role players consider how to engage with these recommendations when deciding on programmes and interventions to support and implement should consider some critical factors. These include:

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  That the programme can be offered at scale
  
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  That the programme can be sustained
  
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  That there is a credible institution(s) that can deliver the programme
  
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  That the programme is simple enough to implement
  
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  That the programme will have sufficient impact
  
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  That the programme works innovatively with the range of challenges that young people face in accessing economic opportunities
  

When reviewing these factors, there are some importance nuances that should be considered when determining the objectives for programmes:

Signals - the need to consider programmes that encourage young people to stay in school – and international examples highlight the value of incentives to encourage young people to do this. It also highlights the value of programmes that require a matric as these programmes create a signal that it’s important to achieve the matric

Building Networks - The importance of networks, in enabling young people to access economic opportunities, has been strongly illustrated in this paper and there is a need to support interventions that build these networks.

Work Experience - Youth service programmes have provided workplace experience, in many cases considerable skills development and have focused on developing values and when well run a sense of pride and the confidence to pursue a range of options.

Creating Complimentary Pathways - There must be a range of programmes to address varied needs and cohorts: either as part of the institutional offering or through partnership arrangements.

Balancing scale and innovation - For government there will be a real need to focus on scale, though it will be important that space is created for innovation.

Learning, Monitoring and Innovation – There is a need to improve on this and to create a platform for sharing learning in an ongoing way, so as to encourage greater levels of collaboration and to support the continual development of programmes.