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

And how do they select and retain employment

The previous section has considered job search behaviours and the effect that this has on outcomes. Of equal concern for this study is the finding that suggests that many young people (outsiders) do not always engage optimally with the opportunities that actually exist (Bernstein 2012).

This is evidenced by the research from both Cape Town and rural KwaZulu–Natal which suggests that some young people will not accept jobs that are perceived to pay too little, or that offer little employment security (Bernstein 2012; Seekings 2012). It was found that, extending the definition of ‘outsiders’ offered by Seekings, specifically young men from rural KwaZulu – Natal, frequently walk away from low-paid jobs despite the mass unemployment surrounding them in their communities. This is supported by qualitative research undertaken, which also shows that some young people would not take low paying jobs, such as a domestic worker, but would rather seek high paying jobs. These studies conclude that the reservation wages set by young people for formal employment is higher than is likely to be earned (White, 2012), and that if the job is not what the young person is looking for, the young people (‘outsiders’) would prefer to wait for the ideal job rather than gaining work experience in a less than ideal position (Bernstein 2012 and Mourshed et al., 2012).
This research is also evidenced by the CAPS data, which reveals that unemployment is not exclusively a result of the inability to find work, but that it also relates to young people selecting to leave employment for a number of factors. This includes reasons such as pressure in the work place, caused by the type of job (such as the pressure to meet sales targets or undertaking heavy physical labour) or because of personal reasons (such as conflict with the manager): it was found that individuals leave expecting to find a role elsewhere, again demonstrating ‘outsiders’ lack of understanding of, and inability to, navigate the labour market.
Related to the above, studies found that rural youth express less of a desire or willingness to take active measures, which would increase their chances of employment, such as studying further, or gaining experience in other areas. Rural youth feel time is better spent staying at home and maintaining close ties with friends and relatives able to support their basic needs as opposed to doing a job that is ‘not worth their time’ (Bernstein (2012), White ed. (2012)).
Based on the above it is suggested that ‘outsiders’ tend to restrict their choices based on their ideal job preference. The research suggests that ‘outsiders’ choices are not based on an understanding of what is needed to navigate the labour market, or an understanding of the importance of gaining work experience in any work that is available. It is suggested that this decision-making process is related to a lack of understanding as to what is possible to attain, and a tendency to overestimate their chances of finding work (and in particular to find work that they feel is more favourable to them). That is, there is a disconnect between what the young person wants and what is available.
The research suggests that this may be because these young people have no (or little) experience of working and often know very few people who have successfully looked for jobs – there are no, or insufficient, ‘models of success’ for them. Young people, and first time work seekers, have to contend with starting off at a disadvantage of not necessarily knowing what employers are looking for. Specifically, they do not know enough about how the job market works.
The findings of the research into ‘outsiders’ work seeking behaviour is seen to be in stark contrast to the behaviour of ‘insiders’, who have more insight into the functioning of the labour market and recognise that as it is a tough space to navigate, there is a need to acquire an advantage in this search, which includes attaining experience in the labour market.
This section illustrates that young people who are ‘outsiders’ therefore are further disadvantaged as they lack an understanding of the way in which they can acquire the characteristics that employers value, such as work experience. They may also not have realised the need to focus on achieving higher grades at school or on attending training.
The following section examines how prospective employers’ recruit potential candidates, and considers what employers look for in an individual.

2. Employers: recruiting and selecting young people

As indicated previously, over the last decade the labour market has changed in that the ratio of semi- and low-skilled jobs (as compared to skilled jobs) has declined across all sectors, except for the community/social/personal services sector. This is evidenced by Rankin et. al. (2012) who analyse Labour Force Survey data, which reveals that the industries that have traditionally absorbed high numbers of unskilled entrants to the labour market are increasingly shifting to hiring more skilled labour: this is illustrated by the calculations that Rankin et al (2012) make, which show that between 2000 and 2010, the ratio of semi- and low-skilled jobs to skilled jobs fell from 9.6 to 7.1 in mining and quarrying, 5.2 to 2.0 in manufacturing, 17.4 to 4.7 in construction and 7.3 to 3.7 in the wholesale and retail sector. It is indicated that the impact of the growing prioritisation of skills affects young people most adversely, because semi- and low-skilled jobs are natural entry points into work (Rankin et. al., 2012).

Research also found that companies are increasingly using formal recruitment channels, which they indicate optimises their search for the most suitable candidate based on job characteristics and recruitment cost (Schöer & Leibbrandt et al. 2012). It requires that the recruitment channels assist them to both find the candidate and to screen for the required characteristics.
In high productivity jobs⁵ where more specific characteristics (including higher levels of qualification) mean a smaller pool to choose from, it is more likely that firms invest in more formal recruitment channels which ensure that effective screening methods are used, such as interviewing and testing. This process will also review the level of education that the applicant has and will consider their CV against set criteria.
However, in relation to low productivity jobs (differently termed as low skilled jobs), employers are more interested in those that ‘show potential’ for a specific role. In these cases, it was found that firms are likely to use channels which still produce relatively reliable information about the applicants’ productivity levels but which are less costly: this includes network channels where they rely on referrals made by their own workforce (Rees, 1966 and Schöer & Leibbrandt et al, 2012 and Rankin et al, 2012). This is achieved by use of ‘word of mouth’, and employers indicate that this strategy provides a filtering mechanism because existing employees are likely to tell only those who they deem to have the correct profile about the job (Rankin et al, 2012). This strategy is chosen as it reduces costs, and because there is a mechanism of trust as it is understood that existing employees ‘pre-screen’ candidates which they put forward for the role.
However, employers state that they experience a challenge in determining which person is most suitable for employment. They indicate that as many young people have not worked before, it is difficult for these young people to demonstrate their productivity levels, as the qualifications and results achieved by school-leavers is not considered to be a reliable signal of the relative merits of those applying for jobs. To overcome this asymmetric information problem, the research finds that employers often make use of the screening process followed by friends and family as a signal of productivity levels (Seekings 2012).
It was found that with the economic down turn, social networks have become even more important as a method of employment for unskilled workers. In the early 1990s close to 42% of South African firms “relied on friends and relatives of existing workers” to recruit new blue collar workers (Standing et al., 1996: 338). Between 1998 and 2002, this has doubled on average to 85% for unskilled workers in large and small firms based on data from metropolitan surveys by the World Bank.⁶ This is illustrated in the following diagram:
Figure Preferred recruitment channel (by low/entry level skill)
Sources: World Bank Greater Johannesburg Metropolitan Survey, World Bank Greater Durban Metropolitan Survey, and World Bank Small Medium Enterprise Survey (authors own calculations).
This diagram shows that network channels are by far the dominant method (84%). Direct and formal only represent 10.5% (the remaining percentages are unaccounted for).
Further insights into the manner in which firms recruit, particularly individuals with higher education, is offered by Budlender citing Pauw et al (2006a) reporting on the findings of a survey of twenty large firms operating in South Africa (referred to in Pauw et al, 2006b). The study focused on firms in which the number of employees varied between 2 000 and 40 000, and the sample covered a range of different sectors. The study found that all but one of the firms employed a ‘pipeline’ strategy in terms of which they recruited youth for entry-level jobs, with the hope that they would then move up. However, most of these firms said that they were not able to fill middle- and senior-level vacancies from among existing employees. They also noted that the ‘pipeline’ strategy runs the risk that youth move on to other employers after the first company has borne the costs of recruitment and training. Nearly two-thirds of the firms had bursary schemes that were linked to recruitment, and saw this as a low-risk effort. Some of the larger firms organised recruitment drives on campuses but most felt these were not worth the substantial expense involved. When such drives were organised, they generally focused on historically advantaged institutions on the basis that the quality of the graduates was better, the desired courses were offered, and these institutions had increasing numbers of black students.
Firms reported particular difficulties in finding black recruits for engineering, science and information technology jobs. They also reported higher turnover than for other recruits when they found such employees. More generally, the research report notes that many engineering graduates may not want to do ‘front-end’ engineering work, but instead will want to do office-based work.
The research explored the firms’ attitudes to, and experience of, learnerships. Generally, it seemed that the learnership system had not encouraged firms to employ more people than they would have otherwise, but instead was seen as a ‘windfall gain’ as they received financial support from government for these trainee employees. Firms reported that one reason that they did not take on more learners than they were likely to employ subsequently (so as to provide training for the labour market more generally) was that they found it unpleasant when the time came to refuse them a job. Learnerships were generally utilised for blue-collar jobs rather than those likely to be filled by graduates, although the researchers observe that learnerships could be used for teaching soft skills to graduates. Learnerships were also rarely offered at middle management level.
The findings from the employers resonate with what was found with respect to the ways in which young people found work: primarily through networks, with those young people who have greater levels of education finding employment through direct methods. These issues, coupled with the greater emphasis being increasingly placed on the need for specific skills and higher levels of education, need to be borne in mind in the formulation of relevant interventions.

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