info.undp.org Web viewYoung People Navigating the Labour Market. Issues facing young people in...

Young People Navigating the Labour MarketIssues 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........................................................................................................................................3

Executive Summary.........................................................................................................................4

1. Introduction.............................................................................................................................5

2 Who are the ‘young people’ struggling to access the labour market?......................................6

3 Issues young people face in accessing the labour market......................................................11

4 How do young people find employment................................................................................15

And how do they select and retain employment.......................................................................18

5 Employers: recruiting and selecting young people.................................................................20

6 Policy and Funding Environment............................................................................................23

a. Framing policies..................................................................................................................23

i. The New Growth Path and the National Development Plan............................................23

b. The Accords........................................................................................................................25

c. The Charters.......................................................................................................................28

d. Other Legislation................................................................................................................29

e. Funding initiatives to support these imperatives...............................................................29

i. The Jobs Fund..................................................................................................................29

ii. Corporate Social Investment..........................................................................................30

f. Some policy proposals that are being discussed.................................................................30

i. Re-directing PIC investments through a Job Creation Index............................................30

ii. Changes to labour regulation.........................................................................................30

iii. Financial assistance for job search.................................................................................31

iv. Wage Subsidy (Youth)....................................................................................................32

v. Transport Subsidy...........................................................................................................33

g. A summary of the array of policy and programmatic options............................................33

7 Review of the types of interventions generally used to link young people to employment in South Africa and emerging learning....................................................................................................35

a. Interventions: Programmes to address the transition to the labour market......................36

i. Secondary School Interventions......................................................................................36

ii. Work Readiness and Placement programmes................................................................37

iii. Occupational Programmes............................................................................................42

iv. Entrepreneurial Development Programmes..................................................................44

v. Public Employment.........................................................................................................46

b. Learning emerging from the SA experience.......................................................................48

i. Recruit young people who have the competence to cope with the programme.............48

1

ii. Offer information and guidance to learners on what the programme will provide and what opportunities may exist beyond the programme................................................................49

iii. Recruiting young people who are interested in and motivated to take part in the programme...................................................................................................................................49

iv. Address the relevance of learning programmes............................................................50

v. Providing support to enable young people to access formal employment.....................50

vi. Providing support to enable young people to initiate an enterprise.............................50

vii. Ways to design Public Works programmes that meet the needs of youth...................51

8 Learning from International Experiences................................................................................52

9 Some Emerging Issues and Recommendations.......................................................................63

References: note this is still to be completed and a list of all evaluations reviewed nationally and globally attached.................................................................................................................................70

Include Annexure A

2

Acronyms

AcronymsABET - Adult Basic Education and Training ALMP - Active Labour Market Policies/ProgrammesCA - Chartered AccountantCRM - Customer Relationships Management CV - Curriculum VitaeCWP - Community Work Programme DFI’s - Development Finance InstitutionsDGMT - The DG Murray TrustDOE - Department of EducationDoH - Department of HealthDoL - Department of LabourDPRU - Development Policy Research UnitDPW - Department of Public Works DSD - Department of Social DevelopmentEMS - Economic Management SciencesEPWP - Expanded Public Works Programme ESSA - Employment Services of South AfricaETDP - Education, Training and Practices Sector Education and Training

AuthoritiesFET/FETC - Further Education and Training/ CertificateFIETA - Forest Industries Education and Training Authority GDP - Growth Domestic ProductGED - General Educational DevelopmentGIZ – German Development CooperationHR - Human ResourcesHSRC - Human Sciences Research CouncilIDC - Industrial Development CorporationILO - International Labour OrganisationJASA - Junior Achievement South Africa JET - Joint Education TrustJIPSA - 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 CorpsNEETs - Not employed and not in education and trainingNGO - Non Governmental OrganisationNYDA - National Youth Development AgencyNYS - National Youth Service PES - Public Employment Services RDP - Reconstruction and Development ProgrammeSAGDA - South African Graduate Development AssociationSAICA - South African Institute of Chartered AccountantsSAIE - South African Institute for Entrepreneurship SEFA - Small Enterprise Finance AgencySETAs - Sector Education and Training Authorities SMME - Small Medium Micro Enterprises

3

TTO - Triple Trust Organisation TVET - Technical Vocational Education and TrainingUNDP - United Nations Development ProgrammeUNISA - University of South AfricaUYF - Umsobomvu Youth FundYAC - Youth Advisory CentresYIEPP - Youth Incentive Entitlement Pilot Project YPED - Youth Professional Entrepreneur Development

4

Executive Summary

IntroductionEvery 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.

5

Policy and funding environmentGovernment, 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 learningThis analysis found that interventions to address these imperatives could generally be categorised in the following manner:

Those that focus on improving the ability of secondary school learners to make a transition into further learning and the workplace

Those that enhance the work readiness of young people and support the placement of young people

Those that support the development of occupational competence Those that enable entrepreneurial development 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

6

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 ExperienceThe 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.

7

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 choicesThe 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:

That the programme can be offered at scale That the programme can be sustained That there is a credible institution(s) that can deliver the programme That the programme is simple enough to implement That the programme will have sufficient impact 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.

8

1. Introduction

As a new year begins, the job market is flooded with young new entrants into the labour market. Many of them did not achieve what they originally set out to do – graduate from School, College, Technikon or University etc. Some of these plans are hindered by poor results, others by economic constraints and pressure to start earning an income.

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. In the context of downturns within the economy those with the least experience – and therefore the youngest – are the first to go and are the group that finds it hardest to access the labour market at all. This also holds true for those with a matric and even more so for those without mathematics and physical science.

This brings with it a further challenge: young people are marginalised from the labour market and so are not able to acquire the experience and skills that will contribute to their future productivity (Levinsohn, 2008). In addition, this exclusion also means that the self worth of the young person is eroded (Bodibe & Nkungu, 2010).

A great deal is known about why young people find it so difficult to enter the labour market, and we have learnt more about why the plethora of interventions implemented over the past twenty years, which were intended to change the situation, have had little impact on the problem. While this paper re-visits the reasons for the problem, and the weaknesses in some of the interventions, 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.

This paper begins by outlining the context of young people in South Africa and then describes the ways in which these young people try and navigate the transition from education to the labour market. The paper then highlights some of the key policies that frame the opportunities that may be available for young people, and are considered critical in shaping the interventions that could be put in place for these young people. The paper then explores the programmes and interventions that are currently in place and provides an analysis of the learning emanating from these programmes (these are described in more depth in the vignettes that were developed as part of this research. These are available as a separate document to this paper). The paper also considers global experiences and the extent to which these resonate with the South African experience as well as offers additional insights that can be harnessed. Finally the paper concludes by pointing to options that could be pursued by the partners in taking forward the work completed thus far.

9

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

This section looks at the demographic profile of young people in South Africa. The main source of data is from three Censuses (1996, 2001 and 2011): it focuses on people in defined age groups who are ‘not employed and not in education and training’ or NEETs. The section looks at the picture for both 15 to 24 year olds and then disaggregates this specifically for 18 to 24 year olds, showing that the challenges faced by young people in accessing employment, education or training significantly increase when they reach 18. The section then goes on to look in more detail at challenges specifically related to progress through the basic education system in South Africa.

Table 1: Number of persons aged 15-24 and 18 – 24 years who are not employed and are not in education and training as a percentage of the population1

1996 2001 201115-24 18-24 15-24 18-24 15-24 18-24

Total NEET 2 049 740 1 809 327 3 155 553 2 794 774 3 198 335 2 945 015NEET % of the population 26.2% 33.9% 34.0% 44.7% 30.9% 39.7%

Source: Statistics SA, Census Supercross, downloaded 09 April 2013

The table above shows that in 2011, close to 3.2 million people aged 15 to 24 years old, or about 31% of the 15 to 24 year old population, are NEET. Although the total number for NEETs in the 18 – 24 population is lower, at just less than 3 million, the percentage of the total population is much higher, at nearly 40%.

The diagram below shows the percentage of NEETs of the total population of the two age categories over time:

1 Note 1: Total NEET refers to the number of persons not employed, not in education and training.Note 2: NEET percentage has been calculated by dividing the number of 15-24 years who are NEETs by the total 15-24 year old population.Note 3: NEET is calculated by excluding all persons aged 15-24 who are attending education institutions and who are employed

10

Figure 1: NEETs as a % of the Age Population, over time

15-24 18-24 15-24 18-24 15-24 18-241996 2001 2011

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

26.20%

33.90% 34.00%

44.70%

30.90%

39.70%

Source: Statistics SA, Census Supercross, downloaded 09 April 2013As the diagram shows, although there was a slight drop in the percentage of NEETs in both age

categories between 2001 and 2011, the problems for those in the 18–24 category continue to remain more acute.

In relation to the geographical location of NEETs, the census figures show that in 2011, the highest proportion of NEETs were in KZN, followed closely by Gauteng, as shown in the diagram below:

Figure 2: NEETs by Province, 2011 Census

Easter

n Cape

Free S

tate

Gauten

g

KwaZulu-N

atal

Limpopo

Mpumalanga

North W

est

Northern

Cape

Western

Cape

0%

5%

10%

15%

20%

25%

15-24 years18-24 years


When looking at the highest education achievement of the population as a whole, the diagram below shows the high number of young people who have an incomplete secondary education or a matric as their highest qualification. This is of particular concern for the 25–34 year old category as the younger age group may still be completing: where-as this cohort is less likely to still be

11

completing their schooling. Interestingly though, whilst this is a concern it can be seen that there appears to be an improvement in education levels, as compared to the older cohorts.

Figure 3: Highest Educational Achievement Levels of Population as whole

7-14 15-25 25-34 35-44 45-54 55-650%

10%20%30%40%50%60%70%80%90%

100%

DegreeDiplomaMatricIncomplete SecPrimaryNo education

Source: StatsSA, Quarterly Labour Force Survey, Quarter 4, 2012In relation to the educational profile of the NEETs specifically, the table below shows the highest

level of education attained by NEETs in both age categories over three censuses (1996, 2001 and 2011). It can be seen in the 2011 census report that the majority of persons who are NEET (in the 15 to 24 year age group) have either (a) secondary education less than Grade 10 as their highest level of education attainment, or (b) have Grade 12 as their highest level of education attainment. This profile is critical to consider as it raises the real concern that for many young people there is no indication that matric will enable a transition into the labour market: and this may act as a disincentive to young people completing their matric.

Table 2: Number of persons aged 15-24 years and 18 – 24 years who are not employed and not in education and training by level of education attainment

1996 2001 201115-24 18-24 15-24 18-24 15-24 18-24

No schooling 289 965 220 383 379 616 311 878 109 637 92 458Unspecified 45 327 38 224 0 0 0 0Primary or less 563 587 467 799 661 031 505 271 413 736 326 503Sec education less than Gr 10 388 867 343 869 592 301 503 985 1 481 593 1 343 003

Grade 12/Std 10 339 873 322 116 660 242 621 537 1 102 117 1 092 315Certificated with grade 12 398 691 393 636 773 253 763 603 37 267 37 267

Diploma with grade 12 6 128 6 088 44 048 43 644 22 895 22 895

Higher diploma 10 341 10 291 35 694 35 490 13 407 13 407Bachelor’s degree 2 306 2 289 5 833 5 833 7 236 7 236Bachelor’s degree and post-grad dip 145 144 1 735 1 735 1 455 1 455

Honours 158 158 1 367 1 367 1 849 1 849Higher degree (Masters /PhD) 107 104 431 431 697 697

Other 4245 4 227 0 0 6 443 5 930

12

Total 2 049 740 1 809 328 3 155 553 2 794 774 3 198 335 2 945 015Source: Statistics SA, Census Supercross, downloaded 09 April 2013

Further, this table also shows that the number of persons who have a Bachelors degree and above, and who are NEET, has increased significantly since 1996. Further analysis has to be undertaken to understand this phenomenon.

The following diagram shows only the data regarding highest level of education achievement for NEETs from the 2011 data in the table above, as a percentage of the total NEETs in the two age categories. The diagram shows that young people with a secondary education less than Grade 12 are most likely to be NEET, followed by those with a Grade 12 only.

Figure 4: Highest Education Level of NEETs, 2011 Census

No schoolin

g

Primary

or less

Sec ed

ucation les

s than

Gr 10

Grade 1

2/Std 10

Certificat

ed w

ith gr

ade 1

2

Diploma with

grad

e 12

Higher

diploma

Bachelo

r’s degr

ee

Bachelo

r’s degr

ee an

d post-gra

d dip

Honours

Higher

degree

( Mast

ers/PhD)

Other0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%


The education profile of NEETs shown in the diagram above is a consequence of the fractured pathway that many young people take through the education system in South Africa. Research by the Joint Education Trust (JET) shows the key points of delay for young people as they move through the basic education system:

13

The graphic above show the high levels of ‘repeat’, particularly between Grades 8 and 11. This problem is examined further in the table below, also based on JET research, which shows the number of learners by grade in public ordinary schools between 1995 and 2012.

Table 3: No of Learners in Ordinary Public Schools, by Grade

Year G1 G2 G3 G4 G5 G6 G7 G8 G9 G10 G11 G12% Gr12 of Grade 1

1995 158 645 126 404 122 264 116 632 113 029 104 833 99 392 115 307 105 211 94 573 84 348 69 442 -1996 143 214 123 051 116 380 110 024 107 429 100 554 92 871 103 123 93 002 85 764 72 859 57 217 -1997 160 389 134 531 131 738 124 489 118 685 112 849 106 619 119 005 113 586 105 998 90 753 68 017 -1998 154 009 139 851 134 679 131 548 121 891 115 609 111 505 123 991 114 485 109 272 93 809 71 452 -1999 141 738 141 379 138 944 135 685 127 921 119 209 112 949 126 852 117 378 111 120 96 988 71 096 -2000 105 420 130 491 142 046 142 897 132 465 123 759 115 923 127 609 119 693 112 142 96 146 68 945 -2001 126 961 106 358 133 289 145 663 139 354 129 872 119 659 131 059 120 003 115 137 94 043 60 571 -2002 142 372 121 437 109 912 134 179 144 556 135 836 126 707 119 219 138 996 117 828 94 968 63 548 -2003 147 928 136 898 123 095 114 008 133 911 145 719 133 615 127 223 121 200 146 527 97 671 65 800 -2004 149 214 142 432 137 075 124 154 114 435 133 964 141 202 134 003 125 322 145 516 107 408 68 779 -2005 146 056 141 877 142 487 137 925 124 154 115 334 132 418 142 799 130 732 148 410 112 030 73 927 512006 145 199 138 827 142 334 142 592 137 157 123 821 113 419 137 453 138 290 153 546 119 788 69 750 442007 154 751 142 795 144 372 147 694 147 596 143 117 128 762 127 350 141 548 168 201 134 067 82 422 582008 154 015 145 214 141 737 143 173 146 074 146 360 140 931 130 839 127 723 163 094 132 293 91 404 572009 157 253 145 109 143 218 140 192 141 015 144 950 144 581 142 178 132 089 148 571 126 750 91 047 592010 166 060 152 205 147 476 144 766 142 045 143 324 146 316 149 891 149 802 160 617 118 366 85 444 602011 176 573 156 751 149 265 145 119 142 786 140 714 141 619 148 352 156 277 172 430 121 313 78 765 752012 185 550 167 614 154 026 147 187 143 527 141 516 138 576 143 979 159 729 176 446 125 051 82 914 65

% Growth 17 33 26 26 27 35 39 25 52 87 48 19

Figures from this table for the 2012 Grade 12 cohort (i.e. learners who entered Grade 1 in 2001 – in pink in the table above) have been used to develop the graph below, which shows the key points of repetition and drop out by looking at the percentage of the initial Grade 1 group at the various levels:

14

21% have repeated

31% have repeated

40% have repeated

52% have repeated

Foundation Phase

Intermediate Phase

Senior Phase FET Phase

GRADE 1 2 3 4 5 6 7 8 9 10 11 12

School delays• Starting school late (a small and decreasing problem)• Missing school temporarily: 4% had missed school for a year or more and returned (2007, Social Surveys-CALS)• Grade repetition most common reason for school delays (and multiple)

9% had repeated 3 times or more

School delays in South Africa common

Source: Social Surveys-CALS household survey, 2007

Figure 5: % of initial Grade 1 Learner group in each Grade, 2012 Gr 12 Cohort

Gr2 Gr3 Gr4 Gr5 Gr6 Gr7 Gr8 Gr9 Gr10 Gr11 Gr120%

20%

40%

60%

80%

100%

120%

140%

96% 97% 98% 98% 98% 101% 103% 104%

127%

96%

65%

The diagram shows that, from Grade 7, learners are increasingly likely to repeat, with a major logjam in Grade 10, after which there is a very steep drop-out rate.

3 Issues young people face in accessing the labour market

Youth unemployment is severe, as highlighted in the figures provided in the section above, and whilst it is true that labour absorbing growth is central to addressing the challenges of unemployment, whether for adults or young people, there are specific barriers that young people face when trying to access employment, and these challenges are especially profound in South Africa. This section gives context to the data presented on young people not in employment, education or training by highlighting the challenges which young people face in accessing the labour market.

Altman and Marock (2008) note that the first and most important explanation for high levels of youth unemployment is slow economic growth in a context of high structural unemployment. While economic growth in South Africa accelerated in the 1990s and 2000s, it was simply not fast enough to absorb labour at the pace needed. However, it must be noted that, during this period, the pace of employment creation was fast in relation to the pace of growth, especially between 2007 and 2008: again during this period, the employment growth rate amongst youth aged 20 and older was at least as fast as the national average employment growth rate, if not faster. This growth was abruptly brought to an end by the global economic crisis. South Africa shed a disproportionate number of jobs relative to what would be expected for its GDP growth in 2009/10.

Although the economy has since started to create employment, it has not yet reached the level it was and youth, and in particular less skilled youth, were disproportionately affected by the downturn: it was found that especially hard hit were those that are African (Branson and Wittenberg, 2007) and those that had not passed Grade 12. One explanation that was offered for this is that young people are more susceptible to unemployment during a slowdown in the economy as they are less likely to be hired and more likely to be laid off (both in terms of the first-in-last out principle and due to lower retrenchment costs). This finding was reinforced by Rankin et al in their

15

paper ‘Young People and Jobs during the Financial Crisis’ (Unpublished): they show that the challenge faced by young people during the financial crisis is the growing skills bias in the South African labour market. Industries that have traditionally absorbed most unskilled entrants to the labour market now have a lower ratio of semi- and low-skilled jobs. 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 highlights the increasing demand for skilled and highly skilled individuals and indicates that at the same time, the proportion of those in the 15-34 year age group with a matric or higher level of education has also increased.

Within the context of the shrinking economy and the shrinking job market, Marock and Altman (2008) provide some other explanations for high unemployment among young people:

Youth lack the skills that underpin employability. The economy tends to favour older, more experienced workers where the number of jobs created is not sufficient to employ younger labour market entrants. Young people often lack foundation skills such as mathematics and English, or other capabilities such as communication or personal presentation and work readiness. Overall therefore, it is also often assumed that the economy is skills biased, and is not generating jobs for entrants.

Youth lack job experience. Obtaining a first job is quite a challenge in any context. However, in South Africa it is especially so for historically disadvantaged groups who face the challenge of not having effective labour market networks that can help guide job search behaviour and skills acquisition choices.

Youth lack mobility and the resources to look for a job. They therefore stay close to home where jobs may not be that readily available. They lack job search capabilities and networks that are relevant to the labour market.

Youth with neither a matric nor experience lack a signalling mechanism. Educational qualifications, such as a matric, operate as a signal for productivity levels in the absence of experience. Without the ability to signal their productivity levels to a prospective employer, young people have no way of showing their suitability for a job. Only completed matric and further qualifications are considered trustworthy by employers in South Africa, hence levels below matric serve no value (Wittenberg, 2002; Duff and Fryer, 2005; Levinsohn, 2007)

In a cohort study, Branson and Wittenberg (2007) further show that younger cohorts seem to be leaving the school system much more rapidly than cohorts even a few years older than themselves. The age which African men and women are becoming economically active is lower (Branson and Wittenberg, 2007). The crucial question in this case is whether the transition out of the schooling system is at the cost of lower education attainment. It seems not – young Africans are obtaining the same amount of schooling as before, but at a quicker rate. What is of concern is that they are not being absorbed into work at a faster rate (Branson and Wittenberg, 2007). The increasing availability of jobs is not enough to absorb the increased flow of young people into the labour market.

The above is consistent with the finding that young Africans may take a longer time to be absorbed into the labour market as their job searching appears to be less effective compared to whites, which is possibly due to the spatial separation between business centres and the outlying areas where Africans reside as a result of Apartheid planning policies, and the ‘insider/outsider’ issues dealt with in more detail below. Transportation and the affordability thereof could further add to this problem (Banerjee 2008).

Inexperience is a key factor in employment prospects, and may explain some of the implicit age discrimination in the labour market (National Treasury 2011). Employment fell by more than 20%

16

(320 000) between December 2008 and December 2010 for 18 to 24 year olds in sharp comparison to an overall decline of 6.4% (National Treasury 2011).

Taking these challenges further, Budlender2 cites Mlatsheni and Rospabé who attempt to explain the high overall rate of youth unemployment and characteristics by taking firstly a macroeconomic viewpoint, and then secondly a micro-economic approach. Macroeconomic literature generally sees the main determinants of youth unemployment as being a lack of demand from the economy – the level and growth of economic activity has been unable to cope with the supply of new entrants to the labour market. The other determinants contributing to youth unemployment are youth wages and skills level.

At a microeconomic level, the reason cited for youth unemployment is related to ‘human capital’. In terms of experience youth generally would have less human capital than older people. Interestingly, in terms of education and formal qualifications, youth often have more capital because of greater opportunities: this is consistent with the data provided in the previous section and is particularly marked in South Africa where the (black) majority of the older generation did not have access to education and training. Given these different sets of characteristics, it is suggested that companies place greater value on people possessing experience as ‘human capital’ as opposed to formal education and training. This reinforces other research, which suggests that while a Matric certificate is a good signalling mechanism for productivity levels, it may not be enough to show value for a particular job – and that experience, or a higher qualification counts for more.

Mlatsheni and Rospabé also look at gender, where they found that only 17-27% of the male/female gap in the likelihood of having wage employment or being self-employed was explained by observable characteristics, suggesting a large element of discrimination.

Recent evidence reinforces this research and points to the probability of finding employment being strongly linked to education levels (having post matric qualifications), location (urban vs. rural youth) and family-related characteristics (social networks and belonging to an employed household vs an unemployed household).

It is suggested that while some differences can be explained by discrimination there are also other factors. For example, in rural areas, the phenomenon of young men walking away from low-paying jobs often occurs. For young women, they face a different situation, particularly young single mothers who are confronted with the daily consumption requirements of their children – they feel the responsibility of having to work to provide for their child, whilst for young men, it is not always clear that any kind of job is better than nothing (White ed., 2012)

In looking at where young people who are employed find work, it was found that approximately 80% of employed young people are employees (that is wage earners) and work in formal sector jobs in the private sector (Rankin et al, 2012). Thus conversely it was found that very few young people pursued self-employment as an option. This is confirmed by other data, which shows that in 2010 there were 1.1% young people classified as self-employed, as compared with 8.8% in the 35-65 year age group (ibid).

This low level of participation in self-employment is explained in multiple ways: young people lack the savings and start-up capital and it is hard for young people to access finance without any backing and with no employment track record. Further, they lack the experience and skills gained

2 Budlender, D, Research undertaken for the UNDP/ILO/DoL/NYDA, 2012: this paper was phase 1 of a broader research process undertaken by these organisations. This paper is phase 2 of the same research process. It therefore draws on the phase 1 research extensively so as to avoid duplication of research.

17

through work experience and often do not feel confident to attempt a business on their own. In addition research suggests that a young person, entering the labour market, might need to earn an income from early on, yet most start-up businesses take a while before they start to generate profit. Young people also indicate that they would prefer the guarantee of a regular income as compared to the uncertainty related to a new business venture that may initially require sacrifice in terms of income, particularly in the early phases (Rankin et al 2012).

These reasons are considered critical to understand, with one-quarter of the labour force out of work, it is imperative that the extent to which self-employment can be considered a viable option to address unemployment. As Marock and Altman note, the levels of unemployment, and the challenges that large numbers of young people face in making the transition into the labour market, create a range of pressures on society and on business – and represent both a social issue that needs to be addressed, and a set of issues that partners need to engage around for a multiplicity of reasons discussed below

.

These issues resonate with those from a recent study that was conducted on behalf of the World Bank.3 The study suggests that the following factors that may be constraints to youth employment:

Lack of labour demand in markets where economic activity is too slow for job growth or where there is a demand for labour but employers choose not to hire the available labour pool.

Constraints to self-employment, namely the money, know-how, and social networks that are the bases for successful small firm start-up and survival.

Skills mismatch are the lack of adequate general skills (literacy, numeracy), technical skills, or soft skills (behavioural skills), all of which are identified by employers as necessary for productive employment.

Job search constraints, including poor information about where the employers (or the employees), also called “matching” and a lack of tools that allow young people to signal their capacities to potential employers.

Social norms, on the labour supply side, where young people may not pursue available jobs due to self-imposed or externally imposed constraints on the types of employment that are appropriate.

The study suggests that the types of constraints require particular interventions, and these are outlined in Section 7.

3 World Bank (2010) Active Labor Market Programs for Youth in Africa: A Framework for Engagement (unpublished)

18

4 How do young people find employment

The picture outlined above has had a significant impact on the school to work transition, but tells us little about the individuals’ experiences in navigating the labour market. In order to explore questions around the challenges related to job searching amongst young people, it is necessary to analyse research attempting to understand the way in which employees and employers locate each other. In doing this, the paper explores the significant differences that exist between young people classed as ‘insiders’ and those classed as ‘outsiders’. It also considers those that possess social capital who are further categorised as ‘privileged’.

The current labour market is a difficult place to navigate for a young person who has neither work experience nor experience in searching for a job. This section seeks to understand the ‘choices’ that area available to young people in selecting a job, and the ‘choices’ that these young people make. This takes into account the reality that not all young people have the same resources when it comes to job searching: and that this determines the extent to which they can access the labour market efficiently and achieve improved outcomes.

It has been well documented that those who are most successful at finding employment have higher social capital (Kraak, 2013; Nudzor 2010; Schoer et al., 2012; Seekings ed. 2012). The concept of insiders and outsiders, and the implications for job search behaviour, is further nuanced in research from Seekings (2012a) where they suggest that in addition to insiders and outsiders there is also a category referred to as privileged youth. Considering young people in the urban areas, Seekings provides the following definitions in terms of each of these three categories:

Table 4: Categories of Urban Youth

Privileged Youth from more affluent minorities

InsidersYouth from less affluent neighbourhoods, but who share advantages

with privileged peers either through social capital or proximity to employment opportunities

OutsidersYouth from informal settlements, mostly failing to complete

secondary schooling and lack close connections with people who are employed

Reference: Adapted from Seekings 2012a

More often than not, the privileged and insiders are more easily able to find employment while their counterparts, ‘outsiders’, constantly struggle: some can only find interim work, jobs that are unrelated to their field of study or interest and many do this work without an intention of continuing in this employment (Mourshed et al., 2012).

This section explores the strategies that are used by different groups of people and the effect that this has on the outcomes realised – that is their chances of securing employment. The three main employment strategies, or channels, that are pursued by young people are: formal channels, direct application channels and networks. These channels are defined below:

19

Table 5: Employment Channels

Formal channels Newspaper advertisements, employment agencies and learnerships

Direct application Gate of factories, farms, private homes, as well as waiting at the side of the road

Networks Referrals, making use of friends and family connections

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. This provides them both with a basis for developing a CV and applying for a job, and may contribute to an increased confidence with respect to completing a formal application.

The research on the unemployed and their job search behaviours suggests that 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 (Bhorat et al. 2001; Dinkelman and Pirouz, 2001; Kingdon and Knight, 2001a). However, this method appears to have a very low success rate, and the majority of these young people struggle to gain employment, and remain unemployed.

Yet Schöel explains that, as these young people are not embedded in local networks, they have little choice and are forced to engage in direct methods, explaining why this strategy is made use of - despite the limited success achieved with this approach. The research also indicates that searching strategy is conditioned by household structure: That is, those not searching for work live with those not searching for work, and of concern is that these individuals that are not searching for work are more likely to be from larger households, and in poorer households concentrated in rural former homeland areas. This is explained by the reality that these young people have the lowest number of contacts in the labour market as these individuals live in households where there are other individuals who are also not employed and not searching for work. These individuals therefore have the weakest degree of attachment to the labour market (Dinkelman and Pirouz, 2001).

Conversely, those searching for work generally live with others searching for work, suggesting that if an individual comes from a household where individuals are employed, this person is more likely to find employment. Research suggests that there may be multiple reasons for these young people finding employment other than having been forced to look for work by the household: these young people can ‘learn’ lessons as to how to look for work from other household members who can share their own knowledge and experiences about ways to find employment. Further it means that there is a job search culture in the home and others in the household may have used networks as a job search strategy (Schöel 2006).

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, which explains why the young people who rely on social networks find themselves in households where other household members are more likely to be employed as this enables the jobs searcher to rely on friends and family to gain access to the labour market.

20

These individuals are found to have further levels of success as they are able to make use of a mixed strategy including formal, direct and networks..

The findings highlighted above are considered crucial to understanding the way in which young people navigate the labour market. The relative success of each of these channels is highlighted in the table below which shows the results of four studies into job searching behaviour conducted in the last decade. The figures indicate the percentage of respondents in each survey who successfully used the three main employment channels to find work4:

Table 6: Employment channels: various South African surveys (2000–2006) (%)KMP (2000) CAPS (2002/3) DV (2004) SAYPS (2006)

Formal 14 % 16% 28% 22%Direct 20% 16% 27% 14%

Networks 66% 68% 46% 64%Sources: As extracted from Scheor et al. (2012) Khayelitsha/Mitchell’s Plain (KMP) survey, Cape Area Panel Study

(CAPS), Duncan Village East London (DV) survey (Duff and Fryer, 2005), and South African Young People Survey (SAYPS).

The above highlights the importance of networks in accessing employment, and the relatively mixed results experienced in terms of the other channels (noting that Duncan Village results show greater levels of success in formal channels, and relatively lower in networks). This finding was further emphasised by Schöel (2006) who, using econometric analysis, demonstrates that the lack of social capital restricts individuals in their search techniques and that those with contacts in the labour market increase the likelihood of using social networks than using active search techniques (direct and formal).

The importance of networks reinforces the issue highlighted in the introduction to this paper which pointed to the disparity between ‘insiders’ and ‘outsiders’, as discussed above. The extent to which young people have access to networks is largely contingent on the background of the individual and particularly factors such as the number of individuals that work within their household and immediate community, as well as their access to resources.

The research by Seekings (2012a), uses the Cape Area Panel Study data, and suggests that more affluent minorities belonging to the urban privileged category typically first find work whilst at school or college generally in restaurants, guesthouses, weekend craft markets and shops. These individuals describe finding casual work as easy, ‘as long as one is not too selective’. They take the approach of ‘starting low’, doing odd jobs, and then working their way up. Most of these young people secure work through connections, through people they know. These people understand that sending a CV to a company won’t secure a person a job, and that there is a need to speak to the manager on a personal basis. The research suggests that they understand that there is a need to give a personal display of trust and affirmation. For these people, having an education was not as important to their ability to get their first (often casual) job, as was their understanding about how the labour market works: what employer’s value, and how to ‘sell’ their labour or services. Fundamentally, they understand what constitutes a ‘work ethic’, and their expectations are matched in terms of earnings and the work that is required of them.

Urban insiders are less likely than the privileged category to gain much work experience whilst at school, but having left school they move from job to job, trying them out, before settling on what seems like a long-term opportunity. Their first work tends to be for larger firms, as compared to their

4 This is the most recent data there is, however it is consistent with more recent data pertaining to the way in which employers recruit suggesting that the findings from these research processes remain valid. This is further supported by anecdotal evidence pertaining to the way in which young people access employment.

21

more privileged peers, and more often in sectors such as retailing and services rather than in manufacturing (Seekings ed. 2012). They too access jobs through connections, but their connections tend to be employees at these firms rather than owners or managers.

These two groups of people have the advantage of knowing people in the labour market - particularly the ‘right’ kind of people. Either they know owners of companies, or people that work within companies where they could find employment. Privileged youth directly know owners/managers of smaller firms while the insiders know a number of employees who already work at larger firms. Existing employees provide recommendations, and pass on useful information on potential vacancies.

Urban outsiders differ quite considerably from the urban privileged and urban insiders as they lack the initial advantage of possessing social capital, which is difficult to acquire without attending the “right” schools and social clubs, or living in a particular neighbourhood. These individuals struggle to find employment; and consequently fewer have held any sort of job. Those who have dropped out of school have expressed the desire to obtain additional training and access to decent jobs, but research suggests that they lack any sense of how to navigate into the labour market. As outsiders, they lack the skills to approach a manager and demonstrate that personal affirmation of trust, which the affluent so easily manage. In the absence of options, these young people resort to sending out CVs and going door to door in hope of someone employing them, despite the evidence that this is an ineffective searching mechanism (Schoer 2006, Duff and Fryer 2004).

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.

22

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.

23

5 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

5 Whereby productivity is defined as a measure of skill level assuming a higher skill level leads to higher productivity and vice versa

24

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 6 Preferred recruitment channel (by low/entry level skill)

Network84%

Direct5.5% Formal

5%

Recruitment Preferences

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

6 Authors own calculations based on unskilled figures taken from World Bank Greater Johannesburg Metropolitan Survey, World Bank Greater Durban Metropolitan Survey, and World Bank Small Medium Enterprise Survey as reported in Schoer, V et al. 2006.

25

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.

26

6 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. The extent to which these initiatives have pull depend on the reliance which an industry or company may have on Government: for example, those that require Government licenses, or tenders are more likely to comply with the letter of the initiatives. However, all businesses are required to respond to this environment, and the implications of the environment in supporting youth to make the transition to employment are considered here.

a. Framing policies

i. The New Growth Path and the National Development Plan

Employment creation is key to both the National Planning Commission’s National Development Plan (NDP) (2011) and the New Growth Path (NGP) Framework (2010), “both documents emphasise the need for a more inclusive, dynamic, diverse and equitable economy which is able to absorb labour and accelerate growth, and in doing so decrease unemployment and eradicate poverty. Moreover, both of these strategic documents recognise the interconnected nature of various socio-economic, political, and environmental factors; the need for an effective, capable state; and the importance of a collective effort from all sectors of society for achieving their visions.” (Juggling Jobs: Assessing the New Growth Path and National Development Plan Job Targets, eThekwini Municipality, May 2012).

Given the supposition argued earlier in this paper that improved youth employment opportunities are directly linked to overall employment opportunities, the successful implementation of both the NDP and the NGP is critical to improved prospects for young people in South Africa. The diagram below outlines the key job creation elements of both the NDP and the NGP:

27

The National Development Plan states that many developing economies are experiencing a “youth bulge”. The Plan indicates that a large economically active population can contribute to falling poverty rates, though it indicates that much depends on whether this population is activated. The changes in demography, particularly the increase in the numbers of people in the working-age cohort, can be a dividend or a burden.

The NDP highlights a number of areas in which there is a need for interventions that specifically target youth: for example, one of the key proposals that they make relates to the need to break the disincentive to hiring young, unskilled work seekers by 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 the public sector should establish programmes run by well-trained ex-entrepreneurs who have first-hand experience of the sector; the government should incentivise the private sector through tax breaks to set up mentoring programmes; established small enterprises should be offered wage subsidies to take on apprentices and to offer youth placements. 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. This should include reviewing the curriculum with a view to encouraging entrepreneurial thinking and

creating the skills necessary for start-ups. They propose that the review should consider focusing education into technical and academic streams after grade 8, and establishing vocational and technical training for students in grades 9 and 11.

b. The Accords

The Youth Accord is one of five Accords, with the others being:

Basic Education Skills Development Local Procurement Green Economy.

29

The Youth Accord is the most recent of the Accords. It was signed on 18th April 2013 at the Hector Peterson Memorial in Soweto by government, organised business, organised labour and community and youth formations. The elements of the Youth Employment Strategy contained in the Accord cover the following areas:

Education and Training:Improve education and training opportunities for the gap grouping between school- leaving and first employment.

Second chance matric programmes for those who did not pass or have poor results Expanding the intake of FET colleges as part of building a stronger vocational and technical skills base among young people to complement the current focus on academic training Developing a stronger roles for SETAs and other institutions to help to address the challenge faced by young people in sector and workplace programmes Expanding the target in the National Skills Accord, including for the State –owned Companies

Work exposure: Connect young people with employment opportunities; through support for job placement schemes and work readiness promotion programmes for young school leavers and provide young people with work experience.

Build on the labour centres of the Department of the Labour and the career fairs that the government has introduced. This forms part of the development of public employment services in South Africa. Private sector initiatives with employment commitments will be encouraged. All state departments should introduce a focused internship programme, aiming at employing their interns over a period of time equal to 5% of the total employment of the departments State-owned enterprise will develop placement opportunities for FET and University students who need work experience as part of completing their studies. Private sector companies will be encouraged to provide a range of work-exposure programmes, which include vacation programmes, summer internship, job shadowing as well as employment of young people in permanent jobs. Large local companies will be engaged to make firm and clear commitments. Build on successful examples elsewhere in the world of work-sharing7 arrangements. This can ensure that part-time opportunities are made available to work-seekers to increase the number of persons with income and work experience, given that the very exposure to regular work supports and builds further employability.

Public sector measures: Increase the number of young people employed in the public sector, through coordinating and scaling up existing programmes under

The following should include clear youth intake targets: The Expanded Public Works Programme as well as the Community Work Programme, which should aim to absorb at least 80% of new entrants from the ranks of young people Rural development programmes, using among others the NARYSEC programme to help rebuild rural communities, assist

7 The ILO notes that globally this is referred to as job-sharing as work sharing refers to short-term arrangements, which are implemented to mitigate a temporary decline in production due to unforeseen downturns in a business. They suggest that work-sharing arrangements specifically do not involve hiring additional staff but rather shares the available work with existing staff in order to avoid lay offs.

30

a ‘youth brigade’ programme.

with rural basic infrastructure such as fencing programme and road maintenance as well as addressing food security programmes. Develop a Green Brigade, focused on the Working for Water, Working for Energy, Working for Fire and other environmental programmes and road maintenance as well as expanding food security programmes Health brigades, to expand home- based care as well as health and wellness education to communities as part of the NHI, auxiliary services in health care facilities Literacy brigade, to utilize young people to expand literacy training of adults Other suitable areas of focus as identified from time to time, such as a Maintenance Brigade to undertake small, regular maintenance of assets and premises that are not currently maintained adequately or at all.

Youth target set-asides: Youth target set-asides need to be considered in particular industries, particularly new industries where young people can be drawn in large numbers and should be progressively realised.

The solar water heater installation programme, which should be made a youth focused sector, employing only young people in the core installation activities, and supporting youth cooperatives and youth – owned enterprises as providers of installation services and maintenance for solar water heating programme The rest of the green economy, where at least 60% of the labour intake should be drawn from the young people, and based on realising this target, the parties should endeavour to improve this further to 70% The infrastructure programme, where a target of at least 60% youth employment should be set for new projects and activities, together with training opportunities for young people The Business Process Services sector, which includes call centres, where a target of 80% of new employment should be explored and aimed for.

Youth entrepreneurship and youth cooperatives:Youth cooperatives and youth entrepreneurship should be promoted.

Public agencies such as Sefa, SEDA and the Job Fund will be encouraged to develop and strengthen dedicated programmes for the youth enterprises and youth co-ops. Consideration will be given to the use of the BBBEE Codes to strengthen private and public sector commitment to improve youth employment. The state can assist in a number of ways, including:

Simplified registration of co-operatives and youth enterprises Technical support in enterprises development Support with demand for products, eg school nutrition programmes and procurement programmes Funding support that can complement private sector finance

Private sector measures:Work with the private sectors to expand the intake of young people, with targeted youth support and incentives approved by all constituencies.

It is important to improve private-sector youth absorption given that most sustainable new jobs are expected to be created in the private sector.

Business organisations have endorsed the youth employment strategy as a practical and concrete way in which partnerships can be developed. They will undertake discussions within their structures to

31

identify specific actions that can be taken to improve youth employment.

It is agreed that specific measures will be developed by the end of March 2013 to give effect to this, with concrete commitments by the participating companies. It is agreed that such specific measures will be developed and announced by national youth month, June 20138.

The other four Accords also have elements which support youth employment:

Basic Education Accord Focused on enabling the social partners to adopt historically disadvantaged schools and to support other programmes geared at systemic improvements in the basic education system. As shown above, weaknesses in basic education are major contributory factors to youth unemployment, and improvements in the education system can only assist in supporting youth to transition into employment.

National Skills Accord The commitments in terms of this Accord can broadly be grouped into three categories:

Delivery of training for artisans and other scarce skills – Commitments 1,3 and 5

Skills planning and Seta Performance – Commitments 4,6 and 7

FET Colleges and workplace learning – Commitments 2 and 8

As young people are the most likely beneficiaries of skills development initiatives, again, achievement of the targets in the Accord will have a direct effect on youth employability

Local Procurement Accord The intention of the Accord is to stimulate the domestic economy by encouraging local procurement. It is suggested that this will lead to greater numbers of job opportunities in general, which will have a spin off effect on employment opportunities for young people. This issue was then reinforced in the youth accord, which highlights the need to support young people to initiate and develop enterprises.

Green Economy Accord This Accord has specific targets for the training and employment of young people, specifically in relation to the manufacturing and installation of solar-water heating systems, where it is specified thatat least 80% of new employees in this area will be young people.

c. The Charters

The Charters place significant emphasis on the importance of supporting the development of enterprise initiatives, and in a number of charters the net profit after tax to be invested to drive these interventions is indicated. The BBBEE Code proposes to strengthen the relationship between enterprise and supplier development. This is coupled with the growing emphasis on the role of procurement in supporting these interventions – as highlighted in the Local Procurement Accord.

8 Some announcements have been made with respect to programmes but whilst the date has passed there are no clear details of these measures

32

These require of business that they employ procurement strategies that allow them to address the profile of their suppliers: the focus has been primarily been on changing the race profile of suppliers, but is increasingly on promoting local suppliers.

The Charters also have a number of requirements for business to undertake skills development: in many cases the Charters stipulate an amount, which is over the prescribed 1% skills levy and also suggest a matrix of programmes that can be supported with this investment. These regulations also specify target groups for this skills development, and in particular state that these programmes should be made available to black employees. Many of them also indicate that young people should be beneficiaries of these programmes.

Most of the charters recognise the need to address the socio-economic imperatives of the communities in which their workplaces are based. For example, the Forestry sector outlines the need to provide services and amenities to the rural poor: this includes the provision of housing for workers and their families, support to health and HIV/AIDS programmes, provision of community education facilities, environmental conservation programmes, community training in fire prevention and conservation, and support with rural road maintenance. Quite specifically the charter states that the industry is also aware of the important role of forests in providing livelihood opportunities for poor rural households and makes a commitment to ensuring regulated access to non-commercial forest products such as firewood, building poles, medicinal plants and edible fruits by local communities.

d. Other Legislation

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. The skills levy is set at 1% of payroll, and recent regulations increase the amount to be paid to business through discretionary grants, creating greater emphasis on occupational qualifications, rather than shorter skills programmes. All SETAs also have specific targets for creating skills development opportunities for young people, in terms of the National Skills Development Strategy III

The Employment Equity legislation focuses on the need to transform the profile of the employees within various sectors, which creates opportunities for young people: for example, in order to support employment equity within the accounting industry, a number of extended programmes have been developed to support young black men and women to access higher education, employment and then to register with the relevant professional body.

e. Funding initiatives to support these imperatives

i. The Jobs Fund

Over and above funding from the fiscus for various youth employment initiatives, in 2010 the South African government established the Jobs Fund with the specific intent of finding innovative and sustainable ways of creating additional employment. The Jobs Fund is a Challenge Fund, offering to partner with institutions that have already committed funds to new interventions, and showing evidence of success. While 3 000 applications were received only 65 projects received support. Most applications presented projects which if funded could create jobs, but did not speak to innovative ways of leveraging significant job creation potential: that is creating significant opportunities for more jobs through systemic change.

33

The Jobs Fund aims to initiate its own processes of identifying original and potentially successful programmes. They have not focused specifically on the question of youth employment, and had assumed that this would be addressed through the work seeker or enterprise development funding windows. While two private sector initiatives which work to convince employers to identify job opportunities suitable for young people, and to commit to placing youth who have been screened and prepared, are being supported by the Fund, they acknowledge that there is a severe need to understand how large numbers of school leavers can be better prepared for the job market.

The Institutional Capacity Building funding window could potentially support institutions such as the Department of Labour Centres to re-configure their business processes to enable much higher levels of placement, based on the learnings from the two pilot projects.

The Fund also indicates that there is significant opportunity for further research into the real cost of youth not being economically active. This could review the costs of incarceration/diversion; social support; second chance education etc. There is an urgent need to quantify the private sector, public sector and individual benefits for young people being employed. Once established, this would serve as a benchmark that could inform funding models in the future. It would also form a useful framework for looking at the types of costs, which should be borne through public funding, corporate investment and individual contributions.

ii. Corporate Social Investment

In addition to government funding imperatives, there is also substantive funding made available by companies through corporate social investment. These focus on a range of areas related to youth including, but not limited to: Support to and in schools (whole school development, learner support, teacher development etc); Support for FET Colleges (again this includes support for the college, as well as learners and practitioner development), Provision of bursaries; Supporting bridging programmes and academic and psycho-social support programmes for students in universities; Supporting placement into the workplace for new entrants through to the professions; as well as youth development programmes – including those that develop networks and leadership skills.

It was found that many of these corporate funders mobilise other private sector agents to invest in the expansion of delivery – where programmes are found to be successful – and also share their learnings with relevant parties (including social partners as well as government departments). Interviewees suggest that this enables interventions to increase substantially in scale and scope and offer useful learning for other stakeholders.

f. Some policy proposals that are being discussed

In addition to the policies and interventions that are already in place, and that have been highlighted above such as the youth brigades, there are also a number of others proposals that are being considered:

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

One suggestion made is that the Public Investment Corporation (PIC) through the Government Employees Pension Fund could place greater levels of pressure on firms to, at a minimum, report the number of jobs per unit of output they have directly and indirectly created in the course of any given financial year. Linked to this proposal it was suggested that the initiation of a ‘Job Creation Index’ of these listed companies could become a vital additional criterion by which the PIC’s investment flows

34

and mandates are shaped and determined. In effect, it could be a powerful manner in which to incentivise investment in companies (Bhorat 2012). Bhorat further proposes that the state could effectively fund and support those companies, which are job creators through the launching of a Job Creation Index Fund on the JSE. Traded Index Funds or ‘tracker funds’ are now a key part of any institutional and individual investors’ profile. This could be an effective means of channelling investable funds to those companies exhibiting high employment creation levels in the domestic economy (ibid).

ii. Changes to labour regulation

There are a number of debates relating to the issue of ‘Cost of Doing Business’: Bhorat (2012) conducted an analysis on the mean measures of regulation. He finds that “while firing and hiring costs, together with the hours rigidity index are below the global average, it is the hiring and firing rigidity measures which are noticeably above the world mean”. At the heart of the labour market flexibility debate in South Africa is the legislation that currently governs fixed-term contracts and the clauses governing dismissals and unfair labour practises (Bhorat, 2012). Bhorat suggests that relaxing these legislations could influence businesses to hiring more labour when they are less certain of their performance, i.e. making use of unskilled labour. This picks up on a point raised in the NDP, which states that, “labour-market reforms aimed at promoting employment, particularly of young people”, are necessary. It states that probation allows employers to assess the suitability of employees. It is set for a specified period, often six months, to determine whether a new employee fits in based on capability, performance, personality, culture and other factors. Probation allows the new employee the opportunity to perform, but also gives the employer the chance to avoid undue risk. Uncertainty about the application of current provisions undermines the willingness of firms to hire inexperienced workers. It proposes that to ease entry into formal work opportunities, ordinary unfair dismissal protections should not apply to employees on probation, up to a limit of six months of service. This means that the contract is assumed to be limited to the probationary period, unless confirmed otherwise. To prevent the abuse of terminating and re-employing just before the probationary period expires, the period of service could include all previous service with the employer, whether directly or through a temporary placement agency. It also makes recommendations regarding dismissals, labour regulation for small business, and regulating temporary employment. The NDP also states that wage determination must be conducive to employment and equity objectives. Some considerations include: Ensuring a fair division of earnings in a context of extreme inequality; Determining affordable wages that support economic expansion; Recognising the need to achieve a social floor, including the social wage (for example free basic services and transport costs) and measures to reduce inflation of basic commodities and that of administered prices. Bhorat specifically suggests that by encouraging a looser labour market, it would enable young people to move around the job market more effectively and would also enable employers to replace staff more easily – and therefore increase their willingness to employ new entrants. This proposal is, however, very contested and others argue that there is little evidence that labour market flexibility would have any effect on the absorption of new entrants.

iii. Financial assistance for job search

Looking for a job can be expensive in relation to the amount some people have to spend. One option that is being considered is to give work seekers the resources to collect the information on their own. A “stipend for job search” is emerging in the United Kingdom (Dolton & O’Neill 2002, and Wurmli, 2010). In the UK context, proponents of this approach argue that this form of conditionality motivates beneficiaries to use resources to look for a job rather than solely to replace lost income as unemployment insurance does (Wurmli 2010). This mechanism is particularly effective when combined with job intermediation services (Van Reenen, 2003): that is, a service that can support placement in the labour market.

35

In the South African context, the majority of these work seekers are not eligible for unemployment insurance, as they have not worked before. However, the bulk of available evidence9 concerning job search assistance programmes suggests that provision of such programmes are critical as they improve the labour market outcomes of participants relative to non-participants, and that these kinds of programmes may be more effective than other ALMPs such as subsidy schemes. Typically, job search assistance programmes are shown to have significant short-run effects in reducing unemployment, with the added bonus that they are relatively cost-effective to implement.

This is confirmed by a study, which considered factors pertaining to the transition from school to work in Flanders (Vanoverberghe J et al, 2008), which found that a decisive factor “for a speedy transition process (ibid, page 329)” is the level of search intensity. Their research also suggests that those who start their job search prior to leaving school have a substantially shorter period of joblessness and highlights the role that schools could play in this process through the provision of information about job search strategies.

There is other evidence, as reviewed in Smith (2006) which shows that job search assistance is particularly beneficial in reducing short-term unemployment, where workers are between jobs.

Rankin et. al. (2012) argue that, despite the good intentions of a job-seekers grant policy, it is unlikely to create new jobs as it would have little or no effect on the cost of employment that businesses face. In addition, they suggest it may cause firms to increase their reliance on a word of mouth method, because the greater the number of applicants the higher the costs of recruitment – because of the costs associated with sifting through applicants (Rankin et. al., 2012). However, recent evidence emerging from such programmes in South Africa suggest that where financial assistance for job search is coupled with a process of supporting improved assessment, placement and matching, then employers are more willing to consider employing this target group. The long term effect on new jobs still need to be evaluated.

iv. Wage Subsidy (Youth)

The intent of the wage subsidy is to reduce the cost of labour to an employer, which reduces the cost to company. This is seen as relevant as the cost of labour is perceived to be too high to attain full employment (Fedderke, 2012). The subsidy could in effect lower the labour cost, resulting in labour being a cheaper input in the production of goods and services. This in turn provides a compelling incentive to make production more labour intensive. Hence the demand for labour and employment would increase. Research by Rankin and the University of Witwatersrand show that a subsidy improves employment chances by at least 25% (Paton 2013).

Treasury proposes that the subsidy will be available for young and less skilled people aged between 18 and 29 years old earning below the personal income tax threshold. It will be available for a maximum of two years and have a maximum value of R12 000. This is approximately half of the average income of a formal-sector worker aged 18 to 29 years old and eligible for the subsidy10. An announcement of the subsidy was first made during the 2011 Budget Speech, and was then confirmed in 2013. The implementation of the subsidy is still hotly contested between various parties and unions.

Arguments against the study are founded on deadweight loss and displacement. There has been strong opposition to this intervention by Cosatu who argue that a youth subsidy will lead to older

9 Altman, M and Marock, C, Employability of youth – overview discussion paper, HSRC, November 2008

10 National Treasury, Discussion Paper, February 2011

36

workers being replaced by younger ones. Most typically this would only occur where experience is not a highly valued attribute, but it could be seen to occur in the low wage, low skill sector of the market. In a study by Rankin & Schöer (2011) this is disputed as they found that substitution of existing workers by younger, inexperienced workers seems less likely. In a survey of firms they found that over three quarters of the respondents stated that they would not replace workers with subsidy holders owing to the premium that they put on the experience of older workers.

Deadweight loss, on the other hand, is based on the notion that the subsidy is paid to the youth unemployed who would have been hired even had the subsidy not been implemented. The greater the deadweight loss, the lower the effect on employment resulting in a limited effectiveness to improve the labour market position of youth unemployment. In a stagnant economy this is likely to happen. Based on current experimental research by Rankin, there are further benefits: the individuals receiving the subsidy are more likely to remain in employment as opposed to those who had not. This finding showed that the subsidy had the intended positive effect on employment.

Other proposals suggest that the wage subsidy should not be used exclusively to finance the remuneration cost, rather the subsidy could increase the possibility of young people receiving on-the-job training, as it becomes more affordable for employers to do so. It is argued that in turn, this would allow workers to gain work experience and improve their productivity, which is something they might not have been able to achieve in the absence of a subsidy. In the long-term, it is argued; this will improve their long-term employment prospects.

v. Transport Subsidy

Previous apartheid laws have meant that over a decade and a half into democracy, residential areas continue to be defined, in the main, by race in South Africa. One of the arguments often made for the economy’s high unemployment rates, is that spatial apartheid does not allow for optimal search behaviour amongst the unemployed. It is extremely expensive for unemployed young people resident in poor communities at the fringes of metropolitan areas or rural areas to go out and search for jobs, this is part of the reason for so many people falling into the ‘not economically active’ category (Bhorat 2012).

A transport subsidy attempts to bridge the gap between outsiders living further away from the market place, by enabling them access to opportunities and making it more affordable to find employment. This is seen as critical as the unemployed are often in on the fringes of metropolitan areas or in outlying rural areas, far from any employment opportunities, and they lack both the networks and skills to access employment opportunities in urban areas. The unemployed in these areas are often too budget-constrained to go out and search for work hence the cost of looking for work is unaffordable. The incentive to look for work is low given the low probability of finding a job coupled with the high cost of transport.

The National Planning Commission is currently exploring the possibility of a transport subsidy and has instituted a randomised control trial to assist government to understand the impact of such an intervention.

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

This section has highlighted the policy options that have been conceptualised in South Africa, and indicates additional proposals that are being suggested. The approaches suggested, are consistent with the types of interventions that are suggested by the World Bank. These are included

37

here as a useful summary of the array of options that are available, and the constraints that different choices may address.

Constraints/ Market Failures

Programmes

Possible short term interventions Necessary longer term measures

Lack of Labour Demand

Low job-growth economy Wage subsidies (employee or employer based)Training subsidiesPublic service/public works programsEntrepreneurship/self-employment programs

Macroeconomic stabilityInvestment climateJob generating growth

Employer discrimination Wage subsidies to employers for hiring target groupsEmployee mentoring

Labour regulations

Constraints to Self-Employment

Lack of financial, human, and social capital

Comprehensive entrepreneurship programsMicro-financeMentoring between established and new entrepreneursBusiness development services

Financial systemsTVET reformsStronger social services

Skills mismatch Inappropriate general education

Second Chance ProgramsEducation equivalency programs

Education reforms

Technical skills mismatch Training + programsInformation about the returns to technical specialtiesOn-the-job training (Internships, formal or informal Apprenticeships)Accreditation of training centres

Demand driven TVETPrivate-public partnership

Soft skills mismatch Reform teaching methodologies to incorporate soft-skillsLife Skills Programs

Education curriculumTVET curriculum

Job matching Job intermediation centresJob counsellingFinancial assistance for job searchMedia and traditionally based information

Labour market reforms

Job search constraints

Signalling Skills certificationTraining centre accreditationSecondary school diplomas

TVET reformsPrivate-public partnership

Social norms Social constraints (external or self-imposed)

Beneficiary targeting scheme to bring adolescent girls and young women into the programsHome-based work, Flexible work hoursChildcare options and other social support systemsTraining in non-traditional skillsAdjust program content/ structure to account for initial differences

These options, and the manner in which they have succeeded in addressing the various constraints outlined are considered in the following section.

38

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

This section of the report considers the nature of the interventions that are currently being implemented in South Africa and an analysis of the learning emanating from the interventions that have already been implemented, highlighting some examples of good practices that have emerged from this process.

This relies on an extensive review of the interventions implemented in South Africa. Methodologically this included accessing as many evaluations of programmes that the research team could, reviewing these, and then follow up interviews with individuals in some of these programmes in order to clarify certain issues that emerged from the evaluation and to explore certain issues in more depth. In addition, the team interviewed individuals from organisations, which have been intensely involved in designing, resourcing and implementing programmes for unemployed young people over the past decade in order to explore the learning that has been developed through these processes. Particular attention was paid to understanding the factors that are perceived to enable young people to make the anticipated transition (A detailed review table can be found in Annexure A.)

This took into account the issues raised in the previous sections of this report, which outlined the many, and diverse, reasons why young people struggle to access the labour market in South Africa, as well as some of the policy interventions, which have been developed, by different role players, to respond to these. Across all sectors of society, there is a recognition that South Africa cannot continue to have generations of young people who complete their schooling and are then disconnected from any opportunity to generate an income. Some key issues emerging from this policy analysis suggests that to address this challenge there is a need to ensure that the following is in place:

Incentives for employers to overcome their reluctance to employ school leavers Greater investment in ensuring that young people leaving school have the attitudes and

skills which better equip them to take up available opportunities Publicly funded interventions to engage young people in constructive activities while the

number of formal jobs remain inadequate to absorb all work seekers Greater development of an entrepreneurial capacity, will create support for young people.

Critically, there is the constant caveat inserted, that for any youth employability interventions to succeed it is necessary for the economy to grow in a manner that absorbs greater numbers of workers.

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



39


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

i. Secondary School Interventions

Programmes aimed at improving secondary school learner competence which were reviewed, focused primarily on improving learners abilities in maths and science and in entrepreneurial education (which tends to focus on understanding what is required and developing entrepreneurial attitudes).

For example, the National Youth Development Agency explored several ways of improving maths competence particularly for matriculants. In some programmes, they contracted organisations with subject matter expertise, and deployed them to both improve the capacity of class room teachers and to provide extra curricula support for learners. In one programme, student teachers were recruited from a university and placed in schools to provide additional support to teachers. The evaluation of this programme pointed to learning that was acquired through its implementation. This includes the finding that there was initially resistance from classroom teachers to having outside trainers monitoring their work. However, the evaluation suggested that in cases where the principals and senior teachers embraced the programme there was a substantial improvement in both the performance of the teachers, and learners’ confidence in the subject. Further, it was found that in many cases the programme only gained momentum in the latter half of the year, and while learners indicated they found the support useful, and believed they had improved their knowledge and confidence to engage with the subject, the time was insufficient to substantially improve exam performance. This highlighted the need to consider the lead time for the programme more carefully in the future so that this can be accommodated in the programme design.

In another example, in the Investec Pro Maths programme, (supported by Investec) which has been working incrementally in more and more schools since 2005, it was suggested that for a maths support programme to be effective, it should begin in Grade 10. Their programme requires learners to attend additional classes from Grade 10: the frequency of these classes increase each year and by Grade 12 the learners are attending three extra classes (which are held during the week and on the weekend). Evaluations of these programme show exceptional improvements in the results of the learners: it was found that while they averaged 20% in their Grade 9 exams they successfully passed in matric – in many cases achieving high marks in their exams. The evaluation conducted also points to the finding that because the programme has run continuously for several years the staff has become increasingly engaged and relationships of trust have been developed. The presence of the programme over time has also meant that learners in lower grades have a high level of awareness of the benefits of the programme and so are enthusiastic about becoming involved in the programme by the time they reach Grade 10.

Another interesting example, which highlights the extent to which school support programmes can be integrated into longer term interventions that focus on employment, is that of Go for Gold. This programme is an integrated, four-phased programme: at a high school level it supports Grade 11 and 12 learners with mathematics, science, life skills and computer skills development. This is then followed by a one-year job shadowing/internship in the Built environment (that is, the construction sector). Learners can then enter either learnerships or tertiary education in preparation

40

for careers in the Built environment and ultimately those that succeed access employment in the Built environment. This programme found that it was best to work with Grade 11 learners as this was early enough to have an impact but late enough for the young people to be able to decide whether they wished to pursue this route. It has been found that these students are very motivated and there is a very high level of completion at all levels of the programme.

Over and above support with mathematics, science, languages and life skills it was also found that there were programmes that focused on developing an entrepreneurial attitude in the schools. For example, the NYDA has also supported programmes which aim to raise the awareness of learners about opportunities to start their own businesses and to gain some practical experience of the skills required for this to succeed. Several interventions were run with multiple schools in two provinces. A service provider experienced in entrepreneurial education developed the learning programme, and ran classes with secondary school learners, which required learners to research and set up entrepreneurial initiatives. The evaluations found that learners had significantly improved their awareness of small business activities in their community, their confidence to explore such an activity, and in some cases learners started income generating projects that continued to supplement their household incomes while they were at school.

Another such intervention has been implemented by the South African Institute for Entrepreneurship (SAIE), which was started by the Triple Trust Organisation (TTO) in 1996 “in recognition of the critical need for easily accessible financial literacy training materials for both the small enterprise sector and for schools”11. The SAIE aims to eradicate poverty by creating entrepreneurs through the participation of learners in the BusinessVENTURES schools programme. Individuals from the programme state that the programme was initiated in schools because they “believe a Grade 12 learner exiting school should be entrepreneurial, they do not have to start a business necessarily. The overall aim of the programme is to change mindsets, but can you teach a learner to change their mindset? We say this is difficult to do and in order to change mindsets the teaching styles and learning styles must change. Our materials have tools, which build learner independence, which is an important entrepreneurial habit. In a classroom the teachers drive the learning experience and what we have done is provide tools that sees the learner taking on some control of learning. The teacher then becomes a facilitator, guiding learning, as opposed to doing the traditional talk-and-chalk, teacher-centred approach”. It was explained that the SAIE has designed and developed over time a pack of entrepreneurial materials, which are fully integrated with the DOE’s curriculum for EMS and Business Studies and aligned with CAPS for learners in Grades 7-12. It was indicated that previously they worked in all grades but EMS has been removed as a subject for lower grades and so they now focus on Grades 7-12. SAIE has tracked learners who used the SAIE materials and have completed Grade 12 and found the following impact: 65% of learners pursue further studies in commerce and they further indicate that ultimately 58% of learners pursue self employment (though it would appear from the data that some that pursue this option do this out of necessity rather than as an opportunity-driven decision).

ii. Work Readiness and Placement programmes

The cluster of programmes that fall into this category tend to provide young people with information and advice on opportunities. Some provide work readiness training, others also assist the person to identify the opportunities for which they are most suited. Some place young people in a work opportunity (which could be in a job or for a fixed period of time) so that they can obtain experience and develop the skills required for the work place. They have varied target groups: open to all, minimum of a matric, minimum a post-schooling qualification. These programmes include

11 http://www.entrepreneurship.co.za/page/about_us

41

those that were reviewed as part of previous research completed by the UNDP/ILO/NYDA and DoL by Budlender (2012) and these findings have been integrated into this report where relevant.

The field of work readiness and placement programmes is increasingly seen as important: although, as illustrated by the research, many employers prefer informal employee search mechanisms, employment centres can serve as information clearing houses to lower the search costs for employers and employees and to increase the quality of job matches. In the most basic centres employers post job openings and jobseekers reply directly to employers of interest. A more comprehensive full-service centre could employ staff that sort though job applications and interview potential employees on behalf of the employer. Other services could be offered to potential employees such as developing training plans, skills development opportunities and to help young work seekers manage competing work and non-work demands (Wurmli, 2010).

Public Employment Services (PES) aimed at improving job-search efficiency and job-matching within the labour market have been put in place in South Africa to target the disadvantaged and the long-term unemployed. The Public Employment Services are framed by the Employment Service Bill (published in the Government Gazette No. 35844, 2 November 2012), which sets out specific provisions to assist young work seekers to find employment, including the following: Providing opportunities for new entrants to the labour market to gain work experience (Section 2(1) c); promoting employment of youth and other vulnerable work seekers by establishing work schemes for the purpose of enabling youth to enter employment, remain in employment or be placed in opportunities for self-employment (Section 6(1)); and providing vocational and career counselling, (Section 5(2)).

The Department of Labour gives practical effect to this legislation through its employer services, which registers vacancies and provides placement services for work seekers and the unemployed through access points at local labour offices. Some of these centres also offer counselling to work seekers although counsellors are not available in all centres.

South Africa has around 135 Public Employment Services known as Labour Centres spread throughout the country. However, it is not clear the extent to which these do, or even could expect to, affect employment: research by Bhorat (2012) suggests that there is no such relationship between per capita labour centre expenditure and the unemployment rate within districts. This finding may relate to the reality that, despite the Bill, there is significant under-investment in South Africa. Comparisons across a handful of countries show that South Africa spends the least in this area. For example, in relative terms, this amounts to 76 times less expenditure on Public Employment Services than South Africa’s middle-income country counterpart – Brazil (Developing an appropriate Public Employment Service model for South Africa, March 2010, Research undertaken by Singizi/DPRU for the Department of Labour, commissioned by GIZ).

The National Youth Development Agency is a youth service agency, which is established by the NYDA Act, 2008 (Act 54 of 2008). Its funding is primarily from government and it provides a number of services that aim to facilitate the job search and match jobs to the requirements and skills of young work seekers. NYDA is a national organisation but it also has a provincial presence. Each province has a board, which has its own full-time chairperson. The chairperson may, among other tasks, try to source opportunities through engaging with business leaders and political leaders. In addition, there are full-time employees who have overall responsibility for the database and also actively source opportunities through engaging with companies.

NYDA supports the Graduate Development Programme and Job Preparation Programme, which aim to enhance the employability of jobless graduates and matriculants by providing job

42

preparation, for example work related life skills, computer literacy, CV preparation, interview skills etcetera as well as job development support that helps young people find work placements.

NYDA also supports 14 Youth Advisory Centres, which are walk-in centres established within communities as a one-stop service centre where young people can access all NYDA products and services including career counselling. There is no charge to either youth or employers for the service.

The process of application for a job involves two steps. Firstly, a young person must complete a beneficiary profile. NYDA’s customer relationships management (CRM) system then checks whether the person is eligible (for example, that they are under 35 years of age and that they are either South African or a permanent residence). If eligible, the youth can complete a job application form or apply for some other form of assistance such as microfinance or business assistance. These tasks can be completed by visiting one of the 14 branches, faxing or emailing their curriculum vitae to the NYDA, or even by phone. In the report by Budlender it is indicated that NYDA also hope to provide on-line registration.

Currently, some of the 14 youth advisory centres do not have JOBS officers. In a review of these centres, Budlender states that the absence of JOBS officers causes delays in attending to work seekers as well as in inputting their information on the database. Thus NYDA reportedly has 6 000 curriculum vitae across the 14 centres, but not all of these are in the CRM system. It was further indicated that while all but one of the branches have four or more computers that youth can use free of charge to input their information, the reality is that the level of computer literacy tends to be low and there is reportedly no one from the NYDA to assist. NYDA staff members also indicate that computers are not sufficient when youth arrive in groups. A further challenge is that whilst previously the CRM system was able to match youth and opportunities, after changes were made to the system this is no longer possible. NYDA staff members therefore have to use the search facility to find matches.

It was explained that where an opportunity arises, the general rule is that the names and details of approximately three youth are put forward to the employer for each opportunity. The CRM system generates monthly reports, which show placements. These placements are recognised where there is a written confirmation letter from the employer and an indication that some sort of payment will be made to the young person. NYDA observes that they are concerned about the potential geographical and urban-rural bias in that it is much easier to find employment in urban areas.

NYDA has piloted certain initiatives with the Department of Labour Public Employment Services, and there are examples in which NYDA provides specific support for young people that enter the public employment centres.

Other placement services that are in place include those run by SAGDA. which has as its mission: “to develop students [to] prepare for the world of work and empower graduates to actively participate in the economy through high impact programs, viable partnerships and research” (Maqubela, 2012). Budlender, in her review of SAGDA, indicates that the Association was registered in 1997 as a Section 21 company. An unemployed graduate initiated the association, as a vehicle to assist other unemployed young graduates: the Nedbank Foundation provided assistance in the form of an office, furniture, telephone and similar assistance. The Foundation also subsequently provided stipends for office bearers of the Association. SAGDA currently has an office in Johannesburg, and is in the process of finalising a memorandum of understanding with the Department of Labour, which would allow SAGDA to use their offices. SAGDA is also in the process of developing a memorandum of understanding with the Development Bank of Southern Africa for use of their Stellenbosch-based telecentre infrastructure and technology.

43

http://www.entrepreneurship.co.za/page/about_us

One of SAGDA’s first initiatives was to establish a database of unemployed youth. The numbers registered on the database remained relatively small until 2010 when SAGDA developed a memorandum and articles of association that established it formally as a membership organisation. Budlender reports that at the time of the research, there were more than 2 200 graduates on the database from 2010, 2011 and 2012 (although it was indicated that this number includes some duplicates).

The graduates registered on the database are beneficiaries rather than members. They receive free services. The members, who pay fees for membership, are divided into five categories, namely universities, public and private colleges, municipalities, companies, and sector education and training authorities (SETAs). There are three categories of membership – primary, secondary and tertiary – with different benefits. Primary members, for example, can serve on the board of directors, can receive 100 copies of the quarterly Top Graduate publication, and can get access to a maximum of 100 graduates for placement. Membership fees are set at R20 000 per annum for primary membership, R15 000 for secondary and R10 000 tertiary.

Budlender comments that one of the characteristics that distinguish this database from the others is SAGDA’s commitment to providing assistance, to those who register, within three months of registration. However, despite this, only a relatively small proportion of those who register find a placement in this period and by end September 2012 SAGDA had succeeded in placing a total of only 154 graduates since January of the same year (Maqubela, 2012). The registered graduates are, however, assessed using an assessment form as well as, at least in some cases, through meeting with the resident psychologist and career advisor. Budlender indicates that based on the assessment, they should have, within the 3 month time frame, received some assistance. This could include access to a graduate empowerment seminar, being assisted in determining their desired career path, or receiving training in business writing, communication, and business ethics. They may also be placed in an internship programme, which earns them a stipend and provides exposure to, and experience in, a workplace. It is indicated that SAGDA also aims to provide further support once graduates are placed: this could include assistance in finding a further job (if it’s an internship) as well as access to industry- and occupation-specific talks.

In addition several other graduate development programmes supported by NYDA were also reviewed. These programmes engaged young people who had undertaken tertiary studies in interventions designed to increase their ability to find employment. Some specifically aimed to give people the professional experience they required in order to register with professional bodies; others sought to provide graduates with work experience, and some of the generic skills (such as computer training, a driver’s licence and the attributes desirable in the work place), which make people more employable. Others provided work experience and weekly classes where graduates would review learning questions, which had arisen for them in the work place, with mentors.

The Graduate Development Programmes reviewed engaged varied numbers of people. On average however, one service provider would work with approximately 50 graduates. The duration of programmes varied from 4 months to 12 months and the average cost per learner was approximately R7 500.00. None of the programmes tracked learner performance beyond the end of the project, and the numbers reported do not necessarily reflect the impact of the programme. However, while most participants reported that the experience had been valuable in that it exposed them to the work environment and gave them greater confidence in searching for work, generally less than 20% of participants were employed at the time of the evaluation.

44

Other placement initiatives are also being implemented by other parties: Provincial and local Government have a number of programmes in place where they are assisting to place young people in industry as well as in the public service (many as interns). In addition the private sector has established a number of initiatives to support improved placement of young people into the workplace.

For example, the Harambee Youth Accelerator is an initiative of the Yellowwoods Trust (and five of its investor businesses: Hollard, Clientele, Telesure, Direct Axis and Nando’s). It was established to enable young people that have a matric qualification and either no work experience (or very limited) to access work. Harambee has spent significant effort in developing relationships with employers – assisted by the fact that it was employer initiated. This entailed working with these employers and expanding the employer base – so as to convince them to actively prioritise the employment of school leavers into new entrant positions. Harambee’s proposition is that they will source, screen match – and where required bridge - young people to the job, and thus reduce the likelihood that the young person will not be suitable, competent or unreliable. Before recruiting young people Harambee maps the job with the employer, and then profiles the top performing employees currently doing this work. This generates a “profile of the attitudes and behaviours most desirable in this job” which is then used as the basis of the recruitment strategy. Any additional skills such as numeracy, competence in certain software or other skills are also identified.

Harambee recruits young people through established youth programmes, community networks and word of mouth. The Harambee process then includes an initial screening (to ensure that the applicants are disadvantaged, between the ages of 18 to 28 years of age, unemployed, have a matriculation (matric), and have had less than a years work experience). Those young people that qualify are invited to participate in a range of assessments (both written and interviews), which enables Harambee to assess the applicants mathematics and communication skills as well as generate a personality profile. The applicants receive feedback on this assessment to enable them to better make decisions. Further, based on the assessment those applicants that meet the requisite criteria are then engaged in a development programme. For certain jobs, such working in entry-level retail or food services, this may simply be interview preparation and some basic training on the attitudes required in the work place. For jobs requiring specific competence, such as working in a call centre, the preparation (bridging) programme can be between two and three months. The programme focuses on the technical skills required for the workplace, understanding the work environment and also rigorously monitors indicators such as punctuality, curiosity and peer engagement.

Harambee has instituted a strong monitoring and evaluation system and will be tracing young people that go through the programme, as well as employers to understand the impact of the programme against critical indicators such as: the number of young people placed in employment; the sustainability of the employment; the extent to which employed young people progress within the workplace and the extent to which these young people support a network of other young people to access employment and can make a contribution to the income of their families.

Thus far Harambee has placed over 800 candidates and has achieved the targeted retention of over 85%, at the 1-year mark. They have also secured 4,000 additional placement commitments for the coming 2 years. Anecdotal feedback relating to the programme suggests that employers are satisfied with the quality of the employees at this point in the programme, and, in interviews with employers, it has been suggested that there has been a significant reduction in churn. Harambee suggests that important lessons continue to be learnt as the programme is implemented: for example, they indicate that they have recognised the importance of employers adapting their management culture and process to support the absorption of first time employees into the

45

workforce. They suggest that another learning pertains to the funding model, which they suggest has the promise of an effective and sustainable private-public partnership model for addressing youth employment.

Harambee has, since it launched, had a step-up in scale having been awarded grant funding from the Jobs Fund. Recently Harambee has identified the need to work proactively with the DoL Labour Centres to source young people and this partnership offers significant opportunities for expanding the impact of both programmes

Another similar programme has been initiated by the Redcap Foundation supported primarily by Mr Price though there are other donors: The Foundation realised that a key issue that they needed to address was that of unemployment and with this in mind they started Jumpstart in 2007. Initially it provided work experience for youth that had completed lifeskills training with a local NGO, with the anticipation that between 25-50% would be taken up into employment. The Jumpstart Program seeks to give unemployed youth between the ages of 18 and 30 a ‘jump start’ to their careers by providing youth with the opportunity to gain work experience, with a targeted outcome of 60% employment. Mr Price has partnered with Non-Profit organisations that provide training to unemployed youth. Mr Price then gives their candidates the opportunity to gain practical work experience in a Mr Price Group store, after which they receive a certificate. Where such placements are successful, store managers will offer many of the youth positions in the store.

The Jumpstart programme highlights the value of, effective screening with the possibility of support to address any gaps that may emerge so that by the time the learners enter the programme they are able to cope with the learning requirements of the programme. It also highlights the importance of providing young people with life skills that are of a consistent quality, and that have been shaped by the needs of the employer, so as to enable the young person to successfully enter the workplace. This is then complemented by a brief workplace experience, which provides the young person the chance to ascertain whether they wish to enter the sector, gives them access to a network and also provides a chance for the employer to establish the extent to which the young person is likely to be a good fit within the company. Other learning from this vignette relates to the value of working with a network of NGOs that have experience in working with young people and can source individual young people from a range of places. The programme also demonstrates the value of having multiple opportunities available to young people, so that different cohorts of young people can be placed including those that do - and those that do not -have a matric.

iii. Occupational Programmes

These are accredited learning programmes which could include learnerships; skills training programmes or apprenticeships. These programmes were also referred to in the research undertaken by Budlender: this paper referred to research by the HSRC (Kruss et al, 2012) which interestingly found that both learnerships and apprenticeships are better at providing for female, black and lower socio-economic status individuals than the further or higher education systems. The research indicates that despite this, higher-skilled learnerships continue to be dominated by white and male learners, and African and female participants are over-represented in learnerships, which relate to services occupations. Further, this research suggested that these learnership opportunities were concentrated in metropolitan areas.

The HSRC research also suggests that those who completed learnerships or apprenticeships are likely to find employment. Of those doing apprenticeships, 70% found employment immediately after completing while a further 6% found a job relatively soon afterwards. Of those on learnerships,

46

86% were employed within a short period of completion. Budlender highlights the finding from the HSRC research that most of the jobs found were permanent positions, however it is noted that the research did not track these learners beyond initial placement. Other evaluative research, for example the Business Trust Tourism Learnership Project case study, found that many young people that found employment then lost it because of disciplinary issues, or in some cases, that they young people chose to leave, as they were not satisfied with the wage and/or the work.

In the evaluative work undertaken by the NYDA, which has supported the implementation of a substantial number of learnerships in partnership with FET Colleges, it was found that there were a number of common challenges:

Learners were not able to cope with the subject matter of the course and as a result completion rates were very low;

Relationships between the providers and the employers were often not in place, and as a result the work based learning components were poorly conceptualised and therefore badly implemented;

Many young people had not understood either the course requirements, or the opportunities which would be available after completion, and therefore became frustrated when the programme did not meet their expectations and/or the work was not what they were anticipating;

There were often delays in making funds available, which affected the payment of stipends and provision of equipment;

In a number of cases, learners who managed to complete the programme and write the final assessments, did not receive their certificates due to various problems in the accreditation arrangements;

Further, with regards to the institutional arrangements: it was indicated that these typically required high levels of cooperative management and funding from multiple institutions such as SETAs, the FETCs, NYDA and in some cases government departments. The evaluations suggested that this often made the programme difficult to implement effectively and that this worked against the programme achieving the desired impact.

However despite many challenges some programmes had significant success. Three examples implemented by different parties, which offer insight into what can make a programme effective, are offered here (these also draw on evaluations completed):

An FET College in Limpopo had identified a number of employment opportunities in the tourism industry associated with game parks. They worked with employers to identify their needs and their willingness to employ young people who had the necessary competencies. They then selected young people who exhibited existing interest in the employment areas (cooking), and who had the necessary academic skills to cope with the course work. Although the programme did not offer a full learnership, the skills programme was tailored to employer requirements. All the learners at the end of the programme were employed.

An FET College in East London used a similar method to identify opportunities in the automotive industry. The learning programme was designed with the employer and when learners undertook their work place experience, the College provided a mentor to assist learners make the links between their classroom theory, and to provide support if they struggled with a task. The programme had a much higher pass rate and employment rate of graduates than most of the other programmes.

47

The Forest Industries Education and Training Authority (FIETA)12 ran an extended learnership in furniture making across South Africa. In addition to the formal learning programme, they funded colleges to run business incubators for a sustained period beyond the programme. Learners who had completed the course were encouraged to form small companies who could receive business support from the college, use the tools and equipment of the college and receive technical support from college staff. The FIETA programme was one of the very few learnership programmes, which tracked learners beyond the completion of the programme. The findings of the tracer study suggested that significantly more young people had exited into self-employment than any of the other programmes reviewed. It also suggested that the incubation support had been found to be critical, and recommended that such support needed to be in place for a sustained period of time (potentially two years) so as to allow learners to access it on a needs basis.

These programmes generally run for 12 months and cost between R18 000 and R55 000 per learner. Data on completion and employment rates varied significantly across programmes, and it is not possible to make general findings. However in programmes where the majority of learners passed the learning programme and entered into employment after the programme, at least three of the success factors identified above were in place.

iv. Entrepreneurial Development Programmes

This includes a diverse range of interventions which support young people as they set up businesses including the provision of finance; an array of training; business incubation and mentorship and support as the business is established. This is an area that is extremely contested with a number of studies suggested that young people, who lack work experience are not an appropriate group to target for entrepreneurial development. Many of these studies suggest that where young people do initiate a small business it is out of necessity and its likelihood of success is lower. Further, most of the evaluations reviewed as part of this study, focused on school based entrepreneurial support (as referred to previously). However, there were a number of other interventions to specifically enable young people to initiate their own businesses for which we had access to evaluative findings and these are considered here:

The National Youth Development Agency has invested significant funds and energy in entrepreneurial development, and staff members interviewed suggested that they have had some success, citing two examples of programmes they believed were particularly positive.

Interviewees highlighted the example of the Auto Café, which was developed out of a partnership with Massmart and Builders’ Warehouse. The intent was to develop young people as franchisees. UYF paid participants a stipend and Massmart and Builders’ Warehouse provided space at their stores and mentored and coached them to provide a full set of retail services. 15 young people were placed in each participating store and were then coached to become fully-fledged store managers. However, there was no data about the current status of this project.

The second example was a project implemented in partnership with Nestle around the 2010 World Cup – the bike ice cream programme. Participants were trained in all aspects of selling ice cream and then provided with pedal powered ice cream carts. If people were successful they were able to obtain a scooter, and it was reported that in some cases participants were ultimately able to open up mini warehouses.

12 FIETA has since merged with other sectors and has become the Fibre Processing & Manufacturing Seta

48

The NYDA staff members, reflecting on these experiences, made a number of observations – which resonate with learning from other studies about youth entrepreneurship in South Africa. These comments include that:

South African young people have had limited exposure to entrepreneurship and express much greater interest in formal employment opportunities. Whereas immigrant youth in South Africa engage easily with the idea of “doing the manual work of making the wire animals” and “developing your business strategy”, many South Africans see the manual work as the end of the opportunity (these comments highlight the importance of the entrepreneurial education highlighted previously).

Programmes which carefully assess youth interest and competence prior to engaging them in entrepreneurial development programmes have higher success rates: for example, they commented that the Ikusasa supplier development programme assessed youth against multiple criteria as part of the selection criteria suggesting that this was critical to the success of the programme.

Further, interviewees indicate that low levels of numeracy among many school leavers have an impact on entrepreneurial capacity and interventions should consider how to provide additional support.

Finally, they indicate that much of the NYDA’s success in providing financial loans to young people has been when they invest in individuals or companies who already have highly developed technical and business skills, and simply require capital to expand their companies.

NYDA indicates that as a result of their learning, they will be shifting focus and will in the future no longer be offering SMME loan finance to young entrepreneurs. They will instead, grant finance in the form of micro-finance grants for survivalist and very small youth entrepreneurship initiatives as well as cooperatives grants for greater participation of youth in the cooperatives sector. The grant finance will start from R1 000 to a maximum of R100 000 for any individual or youth cooperative. Due to the financial constraints of the agency just over 37 000 young entrepreneurs will be supported in this financial year. NYDA states that strong non-financial support programme which will include a suite of services and products shall be a requirement for awarding grants in order to ensure preparedness of enterprises or cooperatives as well as sustainability. This suite will include, thorough assessment of business ideas, technical training, mentorship and coaching, relevant entrepreneurial training and support, after care and market linkage support and constant monitoring and evaluation. NYDA indicates that they will enter into a formal agreement with SEFA and IDC as well as other DFI’s in the near future to assess and hand over qualifying enterprises for funding by government funded institutions and commercial banks.

Other programmes reviewed tended to support these findings. For example, an initiative in the retail sector is that of the Clothing Bank, which runs a small business training programme for women of all ages: the Clothing Bank has developed relations with the major clothing retailers and they offer retailers a win-win efficient and cost-free solution to get rid of their excess stock. Excess stock is donated to the Clothing Bank and retailers can claim enterprise development points for the donation as the programme contributes towards the development of emerging enterprises. The Clothing Bank receives approximately 30 000 garments a month and the clothes are used “as a tool to teach unemployed mothers how to run small businesses. The clothes become the supply to the businesses. We are a training organization, using the clothing to teach the practical aspects of small business. We teach a wide range of skills and the key skill is the ability to trade. We are not asking participants to come up with a unique business model as the model is supplied to them”. The Clothing Bank implements a two-year small business training programme centred on selling clothes and this provides participants with the opportunity to earn at least R3500 per month.

49

The Clothing Bank states that whilst they have tried to work with young women they often do not succeed stating that the young women they work with remain dependent. They suggest that there are only 3 cases where a young woman was successful and one of these one was a Zimbabwean citizen, commenting that:

“Youth have many choices and they try various options so they lack perseverance because of this; because they are women they think their white knight is going to rescue them, which happens periodically....they come and go depending on how their life is going which we do not tolerate – you are either in or not, they are expected to stick it out through whatever is happening on a day to day basis.”

The Clothing Bank stated that to address this they consulted with Junior Achievement South Africa (JASA) for guidance but found JASA’s “success rate was almost as dismal. Working with them did not improve the performance of our young women dramatically”. The Clothing Bank suggest that their key learning is that interventions with young people should have “stronger support systems; and extensive one-on-one coaching which would cost more but closer support would be provided”. The Clothing Bank also indicate that such an intervention would need to include the provision of support for young women, who may have substance abuse issues or who may be grappling with physical abuse. The Clothing Bank believes both these should be addressed prior to joining the programme as a small business project could feed addiction and increase violence as partners power is threatened.

This example highlights the real commitment that goes into nurturing small businesses so that they succeed. This includes a lengthy period of training, incubation and support. It also involves consistent monitoring to address any issues that arise. This example illustrates the specific challenges related to enabling young people to initiate a small business – and highlights the issues that need to be taken into account. This does not suggest that this is not a possibility for young people but strongly emphasises that for such interventions to succeed there will be a need for very careful selection and strong support systems to be built into the programme: this would need to include one-on-one coaching which would cost more but would improve the ability of the young person to succeed.

The need for careful selection and training coupled with extended mentorship is reinforced by Ikusasa International which states that they rely on a two-phase candidate assessment, they indicate that this is based on 4 building blocks and 22 criteria. They also support the identification of opportunities and then provide training. Candidates are required to pass the training modules with 80%, and they then provide extended one-on-one mentorship. They state that this is critical to preparing a strong force of competent entrepreneurs. The programme is not only for young people – however they suggest that a large number are young people and that businesses succeed because of their focus on enabling candidates to, “emerge mature with a strong sense of taking responsibility for themselves and their business and this is due to the programme focus on attitude change. Candidates are guided to shift the dependent paradigm to a responsible, mature and independent paradigm”.

v. Public Employment

Public employment programmes are state initiatives aimed at providing unemployed people in poor communities the chance to earn an income while contributing to the development of South Africa. Since 2004 all public employment programmes have been required to report on the work

50

opportunities they create through the Expanded Public Works Programme (EPWP). The EPWP essentially requires government departments to spend funds in a manner that intentionally creates work for the poor.

The EPWP is a nation-wide government-led initiative aimed at drawing a significant number of unemployed South Africans into productive work in a manner that will enable them to gain skills and increase their capacity to earn income. The initiative is coordinated by the Department of Public Works (DPW) and is implemented by government departments and through institutions of civil society. The EPWP commenced in the 2004/05 financial year and targets were set for a five-year period ending on the 31 March 2009.

DPW, as the lead department of the EPWP, then initiated a process to extend the implementation time frame of the EPWP by a further five years. The second phase of the EPWP significantly increased the targets for EPWP job creation, based on the findings of the EPWP mid term review (undertaken in 2008), the achievements of the first phase, and the introduction of the EPWP wage incentive. Since 2009 the EPWP has begun to embrace ways in which civil society organisations can participate in the implementation, and to more actively identify how young people can benefit from the programmes. Several different types of programmes are run under the EPWP umbrella. These include:

The Community Work Programme The national environment poverty alleviation programmes such as Working for Water and

Working on Fire National Youth Service programmes (such as NARYSEC) Rural Roads Rehabilitation programmes e.g. Zibambele in KZN Home and Community Based Care initiatives through provincial departments of Social

Development and Health Kha Ri Gude Mass Literacy Campaign And a pilot initiative to support not-for-profit organisations to initiate work activities in their

communities

Although the institutional arrangements for the programmes differ substantially, common features include payment of a daily wage to workers; clearly defined tasks with measurable outputs; alignment with the development objectives of that sector or local area and compliance with basic health and safety requirements for the area of work.

One of these programmes, the Community Work Programme (CWP) was initiated in 2007 and then recognised as a new component of the EPWP. In two years CWP’s growth has been from 1500 participants in 2009 to 99,179 participants in 2011. By 2014, the target is to establish a presence for the CWP in every municipality. The CWP provides participants with regular part-time work, typically two days a week or the monthly equivalent – adding up to 100 days a year. It is an area-based programme, targeting poor communities in rural and urban areas, and is designed as ‘an employment safety net and not an employment solution’, providing a minimum level of regular and predictable work while wider policy processes to create decent work take effect (TIPS, 2010).

The Seriti Institute, an organisation which acts as implementer for many CWP sites, believes that there is a need to develop a youth development companion programme, which can engage younger workers in additional activities such as life skills or raising awareness of study and other opportunities.

51

Similar international work programmes to the CWP exist such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This programme was established as an act within the constitution guaranteeing a minimum of 100 days of wage employment to every rural household with unemployed adult members willing to do unskilled work. The aim of this act is to provide a fall-back employment source when other employment alternatives are scarce or inadequate. This programme achieved a far higher scale than any other programme has managed. By mid 2010 more than 55 million households were participating in the scheme – this is equivalent to approximately 4.5% of India’s population. In South Africa, the equivalent participation rate would be about 2.2 million people (Philip 2012).

The Kha Ri Gude Mass Literacy campaign engages over 70 000 volunteers across South Africa. The programme director notes that most of the volunteers are young people, and are engaged in the programme because they have nothing else to do. New partnerships with the ETDP SETA have allowed the programme to fund bursaries for 1 000 volunteers to register for teaching courses at UNISA and they hope this can be expanded.

Another key Public Works programmes is the National Youth Service (NYS) programme, which has been designed for unemployed young people. It was initially intended to provide young people with substantial experience of service (work) that benefited communities and to build their own competence; a qualification in an area where there was economic demand and a substantial programme of personal and citizenship development. The NYDA report that they have had the same challenges in providing a structured learning programme as reported by the EPWP and state they now tend to focus on providing the experience of work through a service project, and building civic awareness.

Lovelife and City Year South Africa are both NGOs, which have run NYS interventions for more than ten years. Lovelife has more than 8 000 volunteers nationally who work to support DoH and DSD Clinics and Drop In Centres, and run peer awareness and school based HIV programmes in hundreds of South African communities. The programme recruits young people who already volunteer in their communities and are well known by the different agencies they will support. Although the programme provides no structured learning, there is an extensive network of regional staff to support the volunteers in their work. An evaluation of Lovelife showed extraordinarily high levels of post project placement among participants. Almost all the Groundbreakers (volunteers who lead and receive a stipend) had left their one-year programme and continued on to employment or further learning. One of the most urgent needs of the Lovelife programme is to ensure the second tier of volunteers, the Mphintshis, are able to access the equivalent of the EPWP wage incentive for the days that they work.

City Year South Africa, which recruits 18-24 year old matriculants to spend a year providing after school and homework support in Gauteng primary schools believe that one of the most important factors for a successful programme is that young people want to participate, and find motivation in the additional value they add to the lives of the people they serve. They believe that participants who, during the programme, learn to see themselves as valuable and an asset, and who have high levels of empathy and engagement with the schools during their year of service, are far more likely to sustain their search for employment beyond the programme, even when it is difficult. They believe that it can take 6-24 months for a person to find a job after they complete their service.

The EPWP Unit is aware of the need to have programmes that directly meet the needs of young people and is committed to addressing the challenges related to public employment programmes internationally: recently the NYDA has agreed to a partnership with the EPWP Unit which will allow them to access the wage incentive to support civil society NYS interventions. It is anticipated that the

52

NYDA pilot of civil society NYS programmes, to be supported by the EPWP wage incentive, offers substantial opportunities for careful monitoring and massification.

b. Learning emerging from the SA experience

The review of programme experience in South Africa and the fact that there is now a substantial body of experience from programme evaluations, has allowed the team to extrapolate some key learnings related to what makes programmes most likely to succeed.

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

It was found that learning programmes which define the competencies that young people need to succeed in a programme and/or the workplace (e.g. not just have matric but the specific communication, literacy and numeracy competence that they require to cope with the learning programme and ultimately the workplace) and then assess applicants for this ability prior to selection report significantly higher numbers of youth completing the programme and graduating from the programme.

While providers are often anxious to give “as many people as possible” the chance to participate, recruiting learners who will not be able to cope with a learning programme means they are more likely to fail or drop out, and this will have negative implications for them personally, and means funds are spent on projects with low success rates.

Associated with this learning is the need for programmes to actively identify applicants who do not meet the assessment criteria, and either provide them with the competencies that they require prior to undertaking the programme, or refer these young people to other interventions, such as adult learning centres, so to improve their competence and prepare them for other opportunities.

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

It was also found that programmes which are able to clearly articulate to applicants, both prior to and during the programme, the intent and expectations of the programme, maintained higher levels of participation and placement beyond the programme, than those where participants were unclear.

This includes information about what the programme will require from participants (e.g. classroom attendance and passing assignments; reporting for work or full participation in other activities), what the conditions of the programme are - many programmes reported that disputes about stipends and work place opportunities were common reasons for people to drop out – and what opportunities could be taken up by learners beyond the programme.

The ability to communicate changes in the programme conditions were therefore also considered critical: it was found that whilst institutional arrangements often meant that stipends or

53

allowances were paid late, programmes which anticipated this and kept learners aware of the process were able to negotiate the difficulties and prevent drop out.

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

Programmes which recruited young people based on their demonstrated interest in the programmes, and which tested this prior to finalising participation, also achieved better results.

National Youth Service projects in health for example, reported they achieved the best results when they recruited young people who already had an active history of volunteering in the sector. An FET skills programme in catering, carefully assessed applicants existing experience and interest in the food industry and was then able to graduate and place all the learners in employment beyond the programme. Participants who demonstrate this motivation are more likely to be pro-active in sustaining their participation, even when they encounter challenges.

Programmes which actively develop and test this motivation as part of the learning process also have high levels for success. Examples of this include enforcing learner punctuality, completion of assignments and reviewing non-participation or poor performance as a regular activity.

iv. Address the relevance of learning programmes

Very few of the evaluations obtained reviewed the learning programmes which had been developed. This makes it difficult to establish the extent to which the curricula and available materials are appropriate for the courses being offered.

However, what was found was that with respect to occupational programmes, where employers understand the programme content and find it sufficient for the job opportunities being identified, programmes were able to successfully place learners at the end of the programme.

There was also evidence that results further improved where employers were engaged in the design of the programme, specifying entry requirements and informing the learning institution of the kind of competencies required for employment.

In addition, it was found that this was further enhanced in those programmes where the

providers engaged mentors who had experience in the industry, and who were able to work with learners during the training sessions and in the workplace, so as to assist the learners to make the linkages between the theory and the practice.

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

It was found that it is critical that young people, that have limited networks, are supported to access opportunities. This involves a number of steps: including assessment, matching and where necessary bridging. Critically, it then involves working with employers to encourage them to recruit new entrants with limited experience, and also entails preparing the young people for any selection

54

process that employers may have in place, as well as for the workplace (in terms of both work readiness and an understanding of what to expect in the workplace).

To complement the above, it is suggested that there are a number of possibilities emerging about possible incentives that could be put in place: for example, one idea which has been tabled for several years is that participation in a public employment programme can earn a participant a “voucher” to access further learning. Another option that has been piloted and is being discussed, is that of the wage incentive. This has also been shown to have possibilities where coupled with other forms of support (as outlined above).

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

Successful entrepreneurial programmes in secondary schools tended to include several activities:

They helped learners understand the concept of entrepreneurship and gave specific examples of people who have achieved success in this area

They engaged learners in practical activities such as starting small businesses and experiencing at first hand the need for market research; budgeting and product development

They helped learners identify ways of exploring entrepreneurial activities while they were still at school, and identifying possibilities beyond school.

For out of school learners two types of entrepreneurial development programmes were dominant:

The first intended to recruit people interested in business activity, with no tangible skills development interventions to be provided. These programmes had to clearly define the technical and general skills participants would require and then assess applicants in relation to these prior to recruitment.

The second aimed to support people who had completed a learning programme to establish income generating opportunities using those skills at the end of the programme. Lessons for success in these programmes included making learners aware of the entrepreneurial opportunities while they were still engaged in the technical training; providing dedicated business incubation support through access to tools, workshops and advice beyond the programme, and a recognition that learners may require 2-3 years of this support before they become fully independent.

It was also noted that employers are increasingly building entrepreneurial development into supplier development programmes so that there is a market for the goods/services, although other programmes emphasise the need for diversity of markets so as not to develop dependency.

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

In the second phase of the EPWP, projects began to focus on providing only the training required to undertake the work, rather than on skills training that enables individuals to exit into an economic activity: this change took place as it became clear that for many projects, there was not sufficient time, nor capacity, to allow substantial skills training. However, it was recognised that the situation is slightly different for 18-24 year olds who participate in public employment programmes. The intent

55

for this group of beneficiaries is not that they remain within the programme, but that it provides structured activity and some income while they assess other opportunities which they may pursue.

The CWP reports that 18-24 year olds have higher literacy and numeracy rates than the older workers, and thus they are usually employed in the leadership positions on site. This means they work at a slightly higher rate and for more days. CWP staff believe that in many communities, school leavers now see the CWP as a chance to “progress” and network, and not as a keep busy programme. They also report that young people are eager for any training opportunity, and prefer work which engages them in activities such as community education or building relationships and skills. The CWP and the NYS also report that in programmes where youth undertake work, and demonstrate leadership, which is valuable to communities, the status of the young people increases, and they are more likely to remain with the programme, and in a number of instances, are able to access employment because of this.

56

8 Learning from International Experiences

This section considers the key learning from international programmes about ways in which to support youth employability. The lessons, which are drawn from evaluations that have been completed for these programmes, are categorised according to emerging themes. In many cases, the evaluations focus primarily on impact, and the team has had to try and distil the lessons.

The selection of programmes that were reviewed were those that are focused on young people and that fall within the following categories:

• Improving secondary school learner competence / second chance programmes• Work readiness and placement programmes• Occupational programmes• Entrepreneurial development programmes• Public employment or deployment programmes

The review identified 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. However, it is noted that there is variability in availability of evaluative, reliable data across programmes. The programmes selected for analysis within this research were based on the need to understand how programmes fare in countries that have experienced the broad range of constraints identified in the table and therefore this report covers a broad range of associated programmes, also they had reasonable evaluative data that allows an analysis of the effectiveness thereof in addressing constraints.

The table below indicates the programmes that were selected for this overview:

Table 7: Outline of Selected International ProgrammesCategory Country Programme

Second chance programs

USA Job Start

Denmark Youth UnemploymentProgramme

Portugal Inserjovem

USA Youth Incentives Entitlement Pilot Project

Chile Chilecalifica

57

Category Country ProgrammeMulti-Service Programmes, incorporating

Occupational Training Work Readiness and Placement

Chile, Peru and Argentina Jovenes Programs for Comprehensive Job Training

Dominican Republic Youth Training ProgrammeEl Salvador, Peru, Paraguay, Panama, Brazil, Colombia, Venezuela, Dominican Republic, and Bolivia

Entra 21 (internships)

Belgium First Job Initiative

UK Job Centers Plus,New Deal for Young People in the UK

US Jobs Corps

Employment subsidies Czech Republic Job Brokering

Bulgaria Subsidised employment for young long-term unemployed workers

Belgium Subsidised employment for young long-term unemployed workers

Australia Special Youth Employment Training Program

Training Subsidies Kenya Jua Kali

Public Works / Deployment programs

Bulgaria Temporary Employment Programme

Jamaica Youth Service

Youth entrepreneurship

Peru Young Micro Entrepreneurs Qualification Programme

Indonesia Youth Professional Entrepreneur Development (YPED)

The learning from the selected programmes is captured below, organised into key themes:

Theme 1: Targeting strategies

a) Targeting Strategies must ideally be geared to preventing long-term unemployment

Generally, international programmes to enhance youth employability state that they place emphasis on the importance of enrolling youth in the programme before they have spent too much time in unemployment. The priority of the programme is to then ensure that the barriers that young people experience in accessing employment are addressed; so that when the programme is completed the young person is no longer unemployed. These two conditions are seen as critical for preventing long-term unemployment.

However learning from these programmes suggests that the effectiveness of targeting may determine the extent to which the programme succeeds in the above- mentioned objective, that is, that of addressing long-term unemployment.

58

Effective targeting focuses on ensuring that the programme reaches the appropriate groups of disadvantaged youth and, of equal import, that the programme ensures that the interventions are suited to addressing the needs of these groups in the particular context concerned.

Targeting strategies vary significantly across countries: In many European countries the target is youth who need to make the transition from education into the labour market and/or those youth who have been in the labour market but are now unemployed and have been for an particular length of time.

For example, in the Belgium First Job Agreement programme, preference was given to those youth who had been in unemployment for less than 6 months: this was a departure from previous strategies in the country which tended to focus on long-term unemployed and represents the growing understanding of the importance of intervening early.

Other examples include the Danish Youth Unemployment programme as well Portugal’s Inserjovem: both of which target youth that have been unemployed for 6-months or less.

To enable this target group to move into employment, programmes typically rely on a combination of financial incentives (allowances or stipends), job search skills and employability skills. In the Danish Youth Unemployment programme, specially designed programmes of ordinary education or on-the job training are offered to youth who have fallen out of the education system. This programme lasts for 18 months, during which time youth continue to receive 50% of their unemployment benefits. For Inserjovem, the youth continue to receive benefits as long as they remain in the programme, and the support to the youth continues until they find employment.

In the UK and some European countries, enrolment in these programmes is linked to potential sanctions: youth who are unemployed are required to enrol in the programme or face losing their unemployment benefits. This provides an effective mechanism for “passive targeting”, as youth are enrolled in the programme when they seek to retrieve their unemployment benefits. For example, in the UK, the New Deal programme placed youth in a Gateway period after 6 months of unemployment, during which they receive intensive training or work experience in order to fast track their transition to employment. This programme was ended by the Coalition government in 2011 and replaced with the Work Programme that began in the summer of 2011.

Programmes in countries that are considered ‘transition countries’, such as Eastern Europe and Central Asia, also target unemployed youth with low levels of education. In these programmes they focus on raising the skills levels of this target group: they offer a combination of institution-based occupational training and/or work-based training and/or internships, which are combined with wage or hiring subsidies. They report that this is necessary given the significant barriers to employment in these countries, the level of job precariousness amongst youth and the lengthy periods for which young people are unemployed.

Programmes in the USA are focused on addressing barriers to employment for disadvantaged youth through ensuring youth complete their schooling (such as in the Youth Incentive Entitlement Pilot Project (YIEPP) and JobStart). Here, programmes are voluntary and there is a bias towards self-targeting – they suggest that youth that qualify for the particular programme will be drawn by the specific nature of the service offered.

In the JobStart programme, for example, the programme was explicitly targeted at youth who were between 17 and 21 years of age, did not have a high school diploma or GED, read below the eighth-grade level, and were “economically disadvantaged” (defined primarily by household income or receipt of social security benefits). These explicitly stated criteria attracted the targeted economically disadvantaged youth with low reading skills to the centres. In addition, the reputation of the site in the community and its perceived service focus appeared to have a strong influence on who applied for the program. Those sites with a history of providing basic skills instruction and not

59

occupational training attracted youths who were more interested in GED attainment, while those centres that emphasised occupational skills training seem to have attracted youths who were more interested in job skills and immediate employment than in education.

Similarly, in the Latin American countries, the focus is on assisting young people from low-income families who are less likely to access employment opportunities and who are prone to risk-taking behaviours. Examples of these are the Jóvenes and Entra 21 programmes, which actively target economically, disadvantaged youth. Entra 21 tries to ensure that the youth that it targets apply to the programme, by putting in place a financial scheme that provides an incentive for youth to register in the programme. The agencies reach out to youth from a wide range of geographical areas and make sure they have a presence in each of the communities targeted. In the Jovenes programme, there was a deliberate filtering process to ensure that they worked in those neighbourhoods, which have the highest number of houses operating below the poverty lines.

Although most Public Works programmes are not directed towards youth, they have been widely used to provide short-term opportunities for long-term unemployed that have low levels of education and are at risk, particularly in economies that are in crisis. Public Works projects have also been used in post-conflict countries to stabilise and re-integrate youth who have been victims of conflict. Bulgaria implemented a large-scale Public Works programme (temporary employment scheme lasting 5 months) to try and mitigate the effects of the transitional economy, with low employment opportunities, on sustained unemployment. Its primary objective was to reintegrate the unemployed on social assistance into the labour market, restore work habits and motivation, and reduce dependency on the social security.

The programme was effective in attracting large numbers of long-term unemployed youth through wage and other incentives, but employers reported low levels of productivity and the need to invest substantially in mentoring and firm-level supervision to address poor work habits and discipline at the workplace. Ultimately, however, employment outcomes were low - only 8% of programme participants found employment at the end of the programme.

Public Works have a built-in self-targeting mechanism – by setting the wage offered at no more than the prevailing market wage for unskilled labour, they invariably attract the most disadvantaged groups, although the uptake of the service is generally low. However, they can also have the unintended stigmatising effect on youth who participate in such a programme, which can undermine longer term employability.

b) Providing good information is an effective mechanism for targeting

Both the Latin American programmes and the JobStart programme have demonstrated the important role of providing information in encouraging the targeted group to apply to the programme. These programmes use strong media campaigns, which specifically target youth in their particular communities and demonstrate that if the programme objective and services offered are clearly articulated, individuals will most likely self-target. That is, that articulating the particular set of services that will be provided by these programmes, will more likely ensure that the youth that are being targeted will be most attracted to what the programme offers (and conversely that those who don’t need the programme are unlikely to apply). For example, highly skilled youth are unlikely to enrol in a programme that focuses on developing entry-level skills.

The Entra 21 programme ensures it has visibility and had a clear marketing strategy in the communities concerned. This marketing strategy is attuned to reaching disadvantaged youth. In addition, the NGO’s who acted as service providers are well known and respected in their

60

communities. As such it achieves success in reaching its target audience, which are youth that have completed secondary schooling and that are from low-income households.

The Peru PROJoven program, which is a variant of the Jovenes programmes implemented across various Latin American countries, uses dissemination and information campaigns directed to community leaders and local authorities. It also broadcasts PROJoven activities and goals on television and radio, with printed ads in the press, and distribution of pamphlets and other printed materials in localities where poverty rates are higher. They suggest that this allows for a form of self-selection to take place, in that young people that are more motivated, because of a desire to achieve and/or because they are more disadvantaged, will respond to the information about the benefits also the opportunity costs associated with voluntary participation are lower than otherwise would be the case if they had multiple opportunities.

c) Appropriate selection processes

International learning suggests that successful outcomes from youth programmes depend in the first instance on effective recruitment and selection processes. Ideally, youth should be selected on the basis that they are most suited to the programme demands and are therefore most likely to succeed. However, youth programmes face the challenge of having to balance off targeted selection with the equity and access requirements of the programme. Selection is particularly critical in programmes that rely on self-targeting.

In general, the first stage of selection will seek to verify that the young person meets the eligibility criteria (i.e in terms of poverty levels, educational background etc.). This provides the first filtering mechanism in the selection process.

Final selection of participants onto programmes may invariably involve a trade off between equity and appropriate targeting. When seeking to provide training opportunities for youth, it may not be possible to stick closely to the criteria where high levels of inequality prevail. A key challenge here is the tendency of training providers to select the best candidates that meet criteria and more likely to succeed, resulting in particular educationally disadvantaged youth being left out and further marginalised.

It was found that once a programme has established selection criteria, it is important that this is communicated to whomever is undertaking the selection. Experience from the international examples suggest that for example, participating centres/ training providers should be given clear guidelines about the appropriate selection of candidates. This approach can form part of the public tender process and equity requirements can be built into the contractual requirements of the training providers ensuring that these training providers will be unable to or discouraged from unfairly creaming the best candidates and neglecting others.

Further, the Jovenes programmes demonstrates the importance of not allowing training providers to make the final decision on which youth are selected for the programme, as it is in their interest to only select those youth who are likely to succeed which could work against equity requirements. This was also demonstrated in the Peru PROjoven programme: labour offices will pre-select a pool of youth who have chosen to enter particular training programmes on a first-come-first-served principle. This pool, which exceeds the number of spaces available, is sent to the training institutions for final selection. The evaluation found that these training institutions invariably chose those youth who were most likely to succeed in the training – this was known as “cream-skimming”.

61

On the other hand, the targeted selection in the Entra 21 was driven by the placement targets and was viewed, not as undermining equity, but as a means to prevent dropout and ensure placement targets were reached. Youth were selected on the basis of their motivation and ability to succeed. This was done through a written application, combined with interviews and, where possible, should also include other assessments. These screening processes were time-consuming and presented particular challenges when taking the project to scale.

International learning also suggests that small business selection should be based on those that are likely to sustain businesses and create profitable enterprises. The Young Micro Entrepreneurs’ Qualification Program in Peru is a good example of how pre-selection can operate – though it also highlights the challenges inherent in such an approach. The target group is that of: economically disadvantaged young people; that are between the ages of 15 to 25 years of age; that possess entrepreneurial skills and/or own a small and/or informal business (with less than a year of operation); and, that are residing in the localities targeted by the programme. A jury selected the projects or business plans on the basis of a feasibility analysis as well as a determination as to which businesses promised higher profits. It was reported that this competition intimidated a great number of participants with the result that few candidates submitted proposals. However, the evaluation suggests that this process strengthened the likelihood of successful outcomes.

Theme 2: Programmatic strategies

a) Outsourced trainingEvaluations of youth programmes suggest that governments are moving away from the role of

direct provision of training and focusing more on addressing market failures in information and financing, while leaving more of the delivery to private providers. The rationale for this approach is that it suggested that this market-driven approach can stimulate demand-driven programmes on the part of training providers. The key objective of these programmes is to stimulate an effective market for training, which is geared specifically to the needs of disadvantaged youth. The Jua Kali programme in Kenya is a good example of this, as training providers responded to the particular needs of the enterprises and were competitive in their pricing, although it also proved difficult to manage which opened the door for high levels of corruption.

In another example, it was seen that public tenders were prevalent in the Jovenes programmes. It was found that the public bid process attracted good quality courses at good prices. It was also indicated that a key requirement of awarding the contract is that there must be an internship phase and training providers were therefore incentivised to identify niches markets for skills in order to ensure that they could find internships.

In JobStart, however, the use of outsourced agencies was not very effective, particularly in terms of retention and placement of youth. Many outsourced providers were unwilling to accept the youth as they did not meet their entry criteria. Therefore, occupational training programmes, which were an integral component of the JobStart programme, were not always available to these youth and this resulted in lower participation amongst these youth relative to other youth who were provided such training within the JobStart centres. Furthermore, outsourced training providers appeared to have little incentive for and paid little attention to job placement activities. In addition, placement activities generally were undertaken towards the end of the occupational training component of the programmes, many youth were not given the opportunity to benefit from such placement activities.

A further challenge, as found in the Jua Kali project, was the challenge of overseeing outsourced providers. Administration needs to be highly efficient to ensure providers are paid timeously but

62

there also needs to be strong governance to avoid corrupt practices or poor quality on the part of providers.

b) A Skills-First ApproachThere is general agreement in the international evaluations that low education and skills levels

are critical barriers to long-term employability. The bulk of youth programmes therefore focus on upgrading skills. This approach is taken as the evidence suggests that skills-first interventions are suited to disadvantaged youth who lack skills to enter the labour market. It is indicated though that work-first interventions are suited to skilled workers who are job ready.

JobStart and the Chilecalifica programme in Chile both focus on strengthening the foundational skills of young people. Similarly, the Danish Youth Unemployment Plan prioritised human capital investment rather than placement, with the intention of raising the qualification base first. The assumption underlying this approach is that skills will open job prospects, and skilled workers will gain a competitive edge in the labour market.

The key challenge associated with a skills-first approach is to ensure the content (skills and knowledge) and level sufficiently match the demand from industry. For JobStart, the objective is to assist youth to obtain their GED and then do further vocational training. However, while the project was successful in increasing the number of youth with a GED, the participants did not remain in the vocational training for a sufficient period of time to achieve the necessary skills levels for industry. Similarly, some youth were not able to access further training because they did not meet basic requirements for entry as their skills levels were not high enough.

The challenge related to achieving the correct content and level of skills training necessitates closer working relationships between providers and employers, as is the case in strong vocational education systems such as Germany and Switzerland. In the Jovenes programme, providers were incentivised to find niche training markets and internships and the market driven approach was subsequently integrated into the formal training system in Chile.

The Entra 21 programme required agencies to have market intelligence in the design of their programmes in order to reach their target of 40% placement of the participants in jobs. This included conducting surveys with employers to understand their entry-level skills requirements and the challenges they experience in hiring youth. Agencies also used secondary data sources such as labour market studies; although this was reportedly not highly effective as data was difficult to find. In addition, they created a business advisory group to guide programme planning and design. The placement of participants in internships also provided the basis to get feedback from employers on the effectiveness of the programme.

Similarly a skills-first approach applies to some successful entrepreneurship programmes. The Youth Professional Entrepreneur Development (YPED) in Indonesia is targeted at university/college graduates and works in cooperation with local universities. In the YPED graduates are provided with 30 days of training on motivation and self-development, entrepreneurship, business management including marketing and development of a business plan. The graduates are then placed in remote village areas to further improve their knowledge and skills through the establishment of village cooperatives using a revolving fund scheme. Some also conduct peasant business development in rural transmigration areas.

63

c) Individual Action Plans

The international studies suggest that activation strategies for youth are best supported by the development of individual action plans, which lay out action steps and monitoring mechanisms for the young jobseeker. This approach individualises the intervention, by providing a unique plan suited to the particular individual, so as to address the individual’s specific challenges, and enables the young person to take some responsibility for their transition to employment.

The Inserjovem programme and the UK New Deal programme both use individual action plans to determine the process of getting into employment. Similarly, many of the Eastern European countries work with each registered unemployed jobseeker to develop an individual action plan, which outlines the activities and obligations of the youth in seeking employment. In Poland this action plan is compulsory after a period of registering for benefits, while in the Czech Republic it is voluntary. It often includes a mutual contract between the jobseeker and the public employment services agency, thus making the actions obligatory on the part of the jobseeker. These plans are reportedly particularly useful for youth that face multiple barriers, including lack of skills, limited labour market experience and various social issues, in that the plan can address each of the barriers in a systematic manner to maximise the support to the young person.

The individual action plans must include a rigorous job-search plan for benefits to continue – should the youth not follow the plan or refuse to take a suitable employment opportunity, they risk losing their benefits. Such plans appear to work best where there is availability of jobs, as they will invariably involve job search assistance. In addition, it is clear from the Inserjovem programme that, while job search assistance is a highly cost-effective approach, it is not effective without a clear focus on skills upgrading. A key risk is that individual action plans themselves are labour intensive and high caseloads may limit the capacity of PES personnel to effectively monitor progress and manage sanctions where young people are not following the agreed upon plan.

Theme 3: Incentives

There is a substantial base of evidence that demonstrates the effectiveness of incentives in getting youth into - and retaining youth in - programmes. However, many youth programmes appear to combine a ‘carrot and stick’ approach in order to reinforce the dual function of incentives and sanctions. These incentives and sanctions may target youth in order to support entry and retention in skills training, or employers by compelling them to take on youth and subsidising such employment.

Programmes such as JobStart offer a range of incentives to participants including childcare, transport, meal allowances and incentive payments. However, this is only if youth reach certain milestones. Despite this, the programme struggled to retain participants for long enough to achieve the expected skills levels, partly due to the programme being voluntary and having no sanction for dropping out. The Jobs Corps, which preceded JobStart and provides the model for JobStart, offered residential facilities for participants and this assisted with greater retention than the non-residential option but with substantially higher costs being incurred by the programme. In the Youth Service Jamaica programme, an intensive entry-level job preparation program was provided for one month (residential camps) followed by a six month internship / job placement. Volunteers also received a stipend each fortnight.

It was found that in order to be attractive to the young person, the benefits from the programme should exceed unemployment benefits, for example a Public Works programme may

64

offer higher income than if the youth collects unemployment benefits. This was the case with the Australian Special Youth Employment Training Programme.

Most other programmes are either stronger on incentives or sanctions. The YIEPP incentivises youth to remain in and complete secondary schooling by providing access to work while they were studying and thus alleviating the economic reasons for dropping out. A reduction or removal of benefits was a strong sanction if beneficiaries did not participate or dropped out.

For example, access to training and employment placement opportunities. In the Belgium First Job Agreement benefits are safeguarded if offered as a carrot, as long as the youth is looking for a job. Multiple options for mainstream jobs are made available through the support of the Public Employment Services. Similarly, the Inserjovem provides access to a high level of personal support in job searching but requires the participants to honour their commitment to the programme or face a loss of unemployment benefits.

With respect to employers, subsidies are an effective incentive for hiring youth, particularly in the short-term and for long-term unemployed youth. These incentives can take the form of a direct wage subsidy or a reduction in social contributions. The Belgium First Job Agreement demonstrated that employers can be required to meet a quota of young employees - or face sanction – but continue to receive the incentives that are offered to employers if they agree to having these youth in their employ.

For incentives to be successful in the longer-term, they should stimulate not just placement but also the retention of youth in sustainable jobs. For example, incentives can be extended beyond the initial placement or training incentive towards a further incentive if the employer retains the young person for an extended period of time. In the Belgian First Job Agreement, employers who retain low-skilled young people under a written fixed-term contract of employment, may receive cost reductions similar to those in the hiring subsidy. The subsidy lasts 2 years: during the first four quarters the reduction is 75% of the base amount of social insurance contributions; and from the fifth to the eighth quarter it is 50%. Furthermore, for retention of skilled workers, 10% reduction of the employers’ social security contributions is given for the year following the first job agreement.

Theme 4: Integrated delivery incorporating workplace learning

The need for internships and placement is given particularly high levels of prominence in developing countries where no formal apprenticeship systems exist. The Latin American Programmes (Jovenes and Entra 21) demonstrate the importance of programmes incorporating a comprehensive set of services to meet the holistic needs of unemployed youth and ensure employability. They are both demand-driven programmes, with Entra 21 being the most successful in implementing a demand-driven approach.

In the Entra 21 programme, internship hours were considered part of training time. The amount of contact time was dependent on the nature of skills being developed, but the curriculum had to integrate lifeskills and technical skills, and incorporate internship time. A general principle was to ensure that the lifeskills input complimented or reinforced technical skills rather than being offered separately. The project emphasised the importance of monitoring training partners closely to ensure that life skills were well integrated with technical content throughout the training process – this was constantly emphasised throughout the project. However, the one challenge related to the lack of specificity with respect to the lifeskills inputs resulted in a lack of consistency, both in terms of the content and the types of lifeskills that were addressed.

65

Internships in the Entra 21 programme typically occurred after each component of classroom instruction was concluded, although there were attempts by some agencies to alternate classroom and internship hours. In one centre in Colombia, three types of internship were on offer, with varying intensity:

a six months internship comprising intensive on-the-job experience with a wage incentive, a two month internship providing work experience without pay but with a basic stipend, and a short duration for youth (variable) who did not perform well in the classroom and need

reinforcement in a particular skill area in order to master the content.

However, the agencies all found that Identifying internship opportunities was time consuming and took more effort than they anticipated. Even those agencies that had pre-existing links with industry struggled with the investment of time and energy needed to establish the relationships and manage the internships.

In addition to the internship, the Entra 21 programme included a job placement component, which was new for the majority of agencies and set it apart from most youth programs in Latin America and the Caribbean when the program started. Although networks were the predominant source of employment, the participants cited the placement services as the second most important service. Placement services were offered up to three months after the completion of the programme, although some programmes began offering the service while participants were still in the classroom. As youth were spread out across geographic areas, the agencies had to devise effective management structures to deliver the programmes through decentralised teams and outsourcing agreements. The job placement component was predominately delivered either through a job placement unit within the organisation, where dedicated people in the project sites who were hired purposively to fulfil this role, or through outsourced agreements. The latter was the least common approach as the organisations generally wanted to directly engage with employers. However, given the demands for placement, and the training providers were not always equipped to manage the placement aspect. To address this challenge, some organisations hired a job placement coordinator with private sector experience: this was considered critical, a central part of their job was to understand the needs of businesses. It was found that if youth were located in multiple cities or regions, the coordinator needed to create a decentralised team and delegate the job placement to each site.

The importance of this approach is supported by research relating to the importance of work experience for young people. The Vanoverberghe study notes that those young people that have prior work experience find work significantly more quickly than others. This is confirmed in Burns (2008) and in the work of Mlatsheni and Rospabe (2007) and Banerjee et al. (2006).

The comprehensive approach to youth development is also applied successfully in entrepreneurship programmes, and it was found that in general, entrepreneurship skills seem to yield better results when they are acquired in a comprehensive training context. For example, the Peruvian Young Microentrepreneurs Training Scheme involved a package including theoretical classes, counselling and follow-up services, on-the-job training and credit: this was found to be more effective for business development than the provision of managerial training alone.

In summary

This section tries to distil some of the key themes and lessons emerging from the international programme evaluations. It is noted that whilst not all the programmes that were reviewed had an

66

exclusive focus on youth; however, as indicated, the programmes that were selected above had a strong bias towards youth.

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.

With respect to institutional issues it was found that the majority of programmes are executed through the Ministries of Labour Public Employment Services. Some programmes, such as Entra 21, operate through private non-governmental agencies.

67

9 Some Emerging Issues and Recommendations

During this assignment we have considered a vast number of evaluations undertaken both nationally and globally. We have also considered policy documents, discussions and debates taking place about youth in the country as well as elsewhere, and have reflected on the context of young people in South Africa. A substantive amount of work has been done, many lessons have been learnt – some point to challenges, but there are also really positive examples of programmes that are successfully enabling young people to make the transition.

This section provides a summary of the key learnings that are emerging and these are presented below to guide discussion and deliberations. The first section of this conclusion talks to what we have learnt about effective programme design. The second section highlights the more macro issues that emerge from this report, it is anticipated these will form the basis for future engagement amongst role players.

SECTION ONE: LEARNING ABOUT PROGRAMME DESIGN AND IMPLEMENTATIONTIMING The point at which programmes are implemented is critical. The learning

from the school level interventions show that the point (Grade) at which particular programmes are introduced is a key success factor (and the Grade will depend on the type of programme i.e. those which depend on learners having made a choice about career should be introduced later, while those that address foundational skills and depend on high levels of trust and commitment need to be introduced earlier).In relation to post-school interventions, and this is particularly seen in the international review, there is an imperative to catch youth before they have been unemployed for an extended period of time.

TARGETING The ‘youth’ are an extremely diverse group: Programmes should be targeted at specific groups of young people: that is, there must be diverse programmes that meet these varied needs. Programmes should then ensure that the target group is aware of these programmes and that the programmes enable this target group to effectively access and participate in the process. This includes considering the balance of sanctions and incentives that are required to retain youth in the programmes.

SELECTION The effective selection of candidates for programmes is continually raised as a key success factor: this links to the point highlighted above – different programmes will be effective for different young people. There is therefore a need for careful selection of young people prior to entering programmes: and young people should either be accepted directly into the programme (where they meet the requisite criteria) or should be supported to develop these competencies prior to beginning the programme, or be directed to an institution that can support the young person to acquire these competencies.

INFORMATION Information and guidance should be offered to young people about what the programme will provide and what opportunities may exist beyond the programme: this should ensure that the young people that are recruited are interested in and motivated to take part in the programme. It should also ensure that young people understand what the expectations are of them, and what the conditions of the programme may be, so that they are able to determine whether they wish to make a commitment. It is then critical that changes that take place are communicated to the young people – and there

68

are an increasing number of ways to do this such that young people are kept abreast of developments.

DURATION Programmes, which have a longer duration, and therefore a sustained or sustainable funding source, are more likely to succeed. This needs to take into account the reality that there is a long lead-time to get to the point of directly observable success.

Further, examples provided in this report – such as Go for Gold illustrate the value of working with young people over a sustained period. The importance of programmes of a lengthier duration is further illustrated by the examples of the entrepreneurial development programmes provided in this report such as Clothing Bank, which highlights the need for sustained support to be provided to young entrepreneurs. As the Ikusasa programme notes, the process of shifting young people in South Africa from a “dependent paradigm to a responsible, mature and independent paradigm” is a long, hard process.

Further, examples in this report, such as Harambee, point to the need to create credible and effective relations with employers such that it is possible to explore ways in which the work environment and/or work processes can be modified to effectively and successfully accommodate young people.

RELEVANCE This is linked to context and to selection, but a strong learning that has emerged from the evaluations conducted, is the need to explore ways to ensure that learning programmes are more relevant: the examples, such as Harambee and Mr Price, where they have achieved high placement rates are those where (i) work readiness is a strong feature of the programme relating to both the work context into which the young people will be entered and is able to instil the discipline and attitudes required in the workplace, and (ii) where employers are involved in different aspects of the programme such as selection, curriculum, assessment and of course placement.

This involvement ensures that the programme is relevant for the workplace - however, there is equally a need to ensure that programmes provide a basis for further learning and this has implications for the nature of the programme.

Further, the programmes that are most effective are those when young people can see the relevance of the programme for their own lives, for example both City Year and LoveLife report that young people find the programme useful when it provides them the possibility of changing their status in their communities. Further, Promaths highlights the finding that when young people could see maths as something that opens up opportunities they commit to the programme and are willing to do the extra tutorials – even on the weekends, because they can see that it helps them.

CONFIDENCE Critically, programmes needs to focus on building the esteem and confidence of the young person. This is illustrated by programmes such City Year, LoveLife and increasingly CWP, which has shown the importance of young people receiving affirmation for the work that they are doing in the community, and creating spaces for young people to develop their leadership skills is critical.

This philosophy needs to be built into the structure and design of the programme: Further, some of the learnership/FET college interventions show that successful programmes are often built on intensive one-to-one relationships between a young person and a mentor of some description.

In addition, to develop this confidence, programmes need to have markers of success – whether it is receiving an award in the workplace, achieving a

69

matric pass, completing a qualification, successfully starting a small business or getting a job: these need to be effectively communicated as part of the programme, using language and methods which are accessible and attractive to young people.

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.

This will include integrating work readiness as well as creating opportunities for on-the-job application of skills as well as services to support the placement of young people in sustainable jobs and opportunities. Learning from these evaluations point to the need to enhance the efficacy of the support provided to young people to enable them to access formal employment and/or enterprises: suggesting the need for programmes which have strong assessment, matching, and placement components.

Further, there is a need to integrate other forms of learning support within the programmes: this may include bridging support within a programme, or could include linkages with other providers that may be enabling young people to complete their matric through an adult education centre.

INSTITUTIONAL CREDIBILITY

The programmes described in this report demonstrate strongly that there is a need to work with institutions that have credibility, in terms of what the programme can deliver, as well as, it’s relative ‘attractiveness’ in terms of social norms: essentially, programmes which are to attract large numbers of young people have to have ‘street cred’ – people should know that they work. In addition, the institutions need to have credibility with employers – there is a need to ensure that employers trust the institution that the young people that they will recruit have the requisite competencies as well as attitude.

There is much greater strength in institutions that have developed relationships with partner organisations to enable them to refer young people to relevant services, and, where pertinent, to bring these partners in to support a particular element of their programme.

Further, It is noted that a prior research programme undertaken as part of this UNDP/ILO/DoL//NYDA process recommended that there is a need to consider ways to improve the current databases that are in place to support job seeking. The paper suggests that a number of technical details can be improved relating to how data is stored. The analysis also suggests further ways in which the databases and the way they are maintained could be changed with the aim of providing improved services to work-seekers, as well as a better understanding of what the services are achieving.

The research also suggests that it would be particularly useful to improve the recording of what happens to the work-seekers after they are registered on the database, and of whether and when the work-seekers are placed in jobs or other opportunities. It is further recommended that it would also be good to have details of the placements, such as the industry, occupation, starting salary and location, as well as whether the placement was secured through the job placement agency (ESSA, SAGDA or NYDA) or through other means. The research suggests that ideally one would also want further information on whether the person stays in the job, though it is noted that this is complex.

SECTION TWO: LEARNING: KEY SUCCESS FACTORS CRITICAL TO MAKING CHOICES

This paper has highlighted the complexity of the issues facing young people – the large numbers

70

that have not completed their matric, the alarming statistics about the NEETs, and the numbers of factors that effect both how people seek work and the possibilities of securing economic and learning opportunities. For example, location, gender, race and education levels are all factors that affect how one seeks work, and the likelihood of securing an economic opportunity.

This paper also highlights the policy environment in which choices are being made – and points to the debates that are taking place with respect to which policy and programmatic options to strengthen and to introduce.

It considers then, what is required to make different choices work – and reflect on the factors that enable programmes to succeed based on South African and global experience. This learning has been distilled in the previous section of this conclusion.

The report takes as its starting point the type of interventions that have been discussed in this report, which are:




The report suggests that where these are offered well – in line with the programme design principles suggested above – all of these programmes have value for young people. Flowing from this, 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 therefore argues that role players considering how to engage with these recommendations when deciding on programmes and interventions to support and implement should consider some critical factors. These include:

That the programme can be offered at scale That the programme can be sustained That there is a credible institution(s) that can deliver the programme That the programme is simple enough to implement That the programme will have sufficient impact 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 This paper has alluded to the concern that large numbers of young people with a matric are not managing to access economic opportunities. Research suggests that this raises the question for other young people as to why complete matric. Data in this document already highlights concerns about the decrease in participation rates after Grade 9: this suggests 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.

71

BUILDING NETWORKS

The importance of networks, in enabling young people to access economic opportunities, has been strongly illustrated in this paper. The paper shows the extent to which those young people that are outside of these networks – where no-one in the household is working, where their home is located far from transport and/or workplaces, struggle to access opportunities. The paper also highlights the extent to which the nature of the network is likely to even determine the size of enterprise in which the young person secures work.

There is a need to support interventions that build these networks: for example some of the placement programmes profiled (Harambee, Mr Price) deliberately build networks and consciously enable young people who might not traditionally have access to those networks (the ‘outsiders’) to get into them – the extent to which these networks are created, and support a wider circle of young people to access opportunities will be traced as part of the Harambee evaluation process. The LoveLife example also shows how, even if the network is not deliberately focused on providing access to job opportunities, simply being part of a network, doing work which is seen as valuable, enhances young people’s self esteem dramatically and considerably increases their chances of getting formal, full time employment.

In a slightly different example, DGMT is actively working with young people that have been through these programmes to encourage an active network of young leaders: it is suggested that these young leaders can in turn create new networks – and (taking into account what has been argued in this report) perhaps in the process create new ‘insiders.’

WORK EXPERIENCE

The report has illustrated the value of young people accessing work experience. It has shown a range of models that can be supported to achieve this: workplace exposure during a programme, internships or less structured workplace experience after graduation, or as is the case with Go for Gold after matric and before beginning the programme, as well as placement into work experience, and the wage subsidy. Further, the public employment programmes offer valuable insights as to ways in which young people can develop a positive identity and the requisite skills for the workplace: the examples provided in this report offer examples such as CWP, where young people can have access to guaranteed work for 2 days a week allowing them time to also pursue other options. 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

The evaluations that are highlighted in this paper, suggest not only that there must be a range of programmes to address varied needs and cohorts: but also that in some cases – either as part of the institutional offering or through partnership arrangements, the young people should have access to what is described here as a continuum of programmes.

To take the proposed wage subsidy as an example: if the policy is introduced, placement programmes involving powerful networks need to be in place to enable young people to benefit from the policy, or else the ‘outsiders’ will just continue their ineffective job search strategies, going ‘place-to-place’ to find work from employers. These employers may be – and initial research suggests that they will be - more willing to take these young people on, due to the subsidy, however this will be isolated from a strategy of changing employer culture with respect to new entrants, or of ensuring that the young people that

72

are placed have been matched so that the chances of them sustaining their opportunity is likely to be higher. Programmes that have strong linkages with employers as well as effective assessment, matching and bridging capacities will be critical in this respect.

Further, the DoL’s employment centres, which have a strong national footprint, are ideally placed to ensure that ‘outsiders’ could become ‘insiders’ – the extent to which they source and assess young people and then place them in programmes which have direct access to employers is seen as critical.

In addition, within programmes there also needs to be more of a continuum: the Go for Gold programme is instructive here, where learners are recruited in Grade 11, taken through work experience, into further education and finally into employment. This model highlights the extent to which success is possible where young people received sustained support and access to the multiplicity of interventions required.

Critically this involves role players determining what their respective contribution should be, and determining what capacity and linkages are required to enable this.

BALANCING SCALE AND INNOVATION

Flowing from the above, it is recognised that in many of the programmes, there is an on-going tension in the system relating to the need for scale whilst searching for innovation. This debate recognises that for government there will be a real need to focus on scale, though it will be important that space is created for innovation.

There are a number of innovative programmes highlighted in this paper – and the temptation is to simply determine a plan to ensure that the successful programmes go to scale. However, there may be some programmes which – to succeed – will need to be contained. Such a programme could test out innovations – with respect to the nature of the programme, the institutional arrangements, the opportunities that are being supported: attention would then need to be paid as to how such a programme could be replicated or how elements of these programmes could be integrated into a larger programme.

Other programmes, which have simpler designs and are easier to implement may be able to be offered to scale – for example one of the most attractive factors of the wage subsidy is its simplicity to implement. The proposals for a placement voucher have also been suggested because of their potential simplicity: though these need to be tested to establish how to ensure that the system remains simple, whilst ensuring there is sufficient levels of monitoring to ensure the quality and credibility of the service - that is, that it leads to sustainable employment. Similarly, with regards to the transport subsidy, it is noted that while it is very simple in developed countries where there is an integrated transport system, there is still a need to understand how this would work in SA: the Presidency is currently testing such an approach and whether this can be simply applied relative to the impact that it has will then need to be considered.

Some institutions and initiatives may lend themselves to scale, though to enhance their level of success they may need to determine whether there are institutional and programmatic innovations that can be introduced to achieve this. For example, the PES has a well-established national footprint, and is able to work at scale. However, there are target groups that may require more

73

labour intensive assistance than can be reasonably provided with the PES limited resources, and there are also services, interventions or target group clients, which require expertise that goes beyond the normal mandate of the PES. There is a need for the PES to explore partnerships that can enable them to work more effectively and maximise what they can achieve with the available resources.

Similarly NYDA is ideally positioned – as it has direct access to government as well as NGOs - to test certain innovations, and then determine whether these should be taken to scale (as indicated, some projects may need to remain focused on smaller numbers), and where it is agreed that the programme (or elements of it) should be taken to scale there would be a need to then determine what is required to make this step-up change.

This requires of funders that they are willing to fund both scale and innovation (and some funders may select innovation while another leans to scale).

LEARNING, MONITORING & EVALUATION

It was found that some of the more successful international and local programmes have ‘evolved’ over time, with changes being made to the programme or spin-offs being introduced, in response to effective evaluations of the various programmes.

However, there are serious gaps in the data related to the effectiveness (or otherwise) of the various programmes initiated in this area. There is a strong 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.

74

References

Altman, M and Marock, C (2008), Identifying appropriate interventions to support the transition from schooling to the workplace

Banerjee A, Galiani S, Levinsohn J, McLaren Z, Woolard I. 2008 Why has unemployment risen in the New South Africa? The Economics of Transition 16(4): 715–740. DOI: 10.1111/j.1468

0351.2008.00340.x

Bell, D., & Blanchflower, D. (2010). Youth unemployment: déjà vu?.

Bernstein, A (2012) Coping with unemployment – Young peoples strategies. The Centre for Development and Enterprise, Johannesburg, South Africa.

Betcherman, G., K. Olivas, and A. Dar. 2004. “Impacts of Active Labor Market Programs: New Evidence from Evaluations with Particular Attention to Developing and Transition Countries.” Social Protection Discussion Paper 0402, World Bank, Washington, DC.

BHORAT, H. 2003. The post-apartheid challenge: labour demand trends in the South African labour market, 1995-1999. DPRU (Development Policy Research Unit), Working Paper 03/82.

BHORAT, H., LEIBBRANDT, M., MAZIYA, M., VAN DER BERG, S. and WOOLARD, I. 2001.Fighting poverty: labour markets and inequality in South Africa, UCT Press, Cape Town.

Bodibe, O. and Ndungu, K. (2010). Youth Wage subsidy and the spectre of a two-tier labour market.

Branson N, Wittenberg M. (2007). The Measurement of employment status in South Africa usingcohort analysis, 1994–2004. South African Journal of Economics 75(2): 313–326.

Chandra, V., Moorty, L., Rajaratnam, B. & Schaefer, K. 2001. Constraints to growth and employment in South Africa. Report 1: statistics from the large manufacturing firm survey. Informal discussion papers on aspects of the South African economy No. 14, World Bank Southern Africa Department,

Washington D.C.

Chandra, V., Moorty, L., Nganour, J.P., Rajaratnam, B. & Schaefer, K. 2001. Constraints to growth and employment in South Africa. Report 2: evidence from the small medium and micro enterprise firm survey. World Bank discussion paper 15, World Bank Southern Africa Department, Washington

D.C.

Cloete, N. (2009). Responding to the educational needs of post-school youth. African Minds.

Centre for Development and Enterprise, July 2008, South Africa's Door Knockers:Young people and unemployment in metropolitan South Africa

Centre for Development and Enterprise. November 2012. Coping with Unemployment: Young people’s strategies and their policy implications. CDE workshop: Johannesburg.

75

DINKELMAN, T. and PIROUZ, F. 2001. Individual, regional and household determinants of labour force attachment in South Africa: evidence from the 1997 October household survey, Trade and Industrial Policy Secretariat (TIPS) Working Paper 1-2001.

Dolton, P. & O’Neill, D. (1996). The Restart Effect and the Return to Full-Time Stable Employment. Journal of the Royal Statistical Society, Series A, Vol. 159, No. 2, pp. 275-288.

Duff, P. And Fryer, D. (2004) The dynamics of job search and microfoundations of Unemployment. Evidence from Duncan Village. Forum Paper

Ellwood, D. (1982), 'Teenage Unemployment: Permanent Scars or Temporary Blemishes?' in The Youth Labor Market Problem: Its Nature, Causes and Consequences, edited by Richard B. Freeman and David A. Wise, pp. 349-390. Chicago: University of Chicago Press, 1982

Fedderke, J. W. (2012) , The Cost of Rigidity: The Case of the South African Labor Market (December 2012). Comparative Economic Studies, Vol. 54, Issue 4, pp. 809-842, 2012. Available at SSRN: http://ssrn.com/abstract=2188794 or http://dx.doi.org/10.1057/ces.2012.25

Jeanne Gamble and Carel Garisch, Youth Development in South Africa - A Misereor Research project: Summary of Key findings, April 2007

GCIS (Government Communications and Information System), 2011. Statement on theCabinet Lekgotla of 26–28 July 2011, Pretoria.www.info.gov.za/speech/DynamicAction?pageid=461&sid=20345&tid=38379Accessed 13 February 2013

Katz, E. 2008. “Programs Promoting Young Women’s Employment: What Works?” Paper presented at The World Bank Launch of the Adolescent Girls Initiative, “The Adolescent Girls Initiative: An Alliance for Economic Empowerment,“Washington, DC, October 10.

KINGDON, G. and KNIGHT, J. 2001b. “What have we learned about unemployment from microdatasets in

South Africa.” Social Dynamics 27(1): 79-95.

Kraak, A (2013): State failure in dealing with the NEET problem in SouthAfrica: which way forward?, Research in Post-Compulsory Education, 18:1-2, 77-97

Levinsohn, J. (2008). Two policies to alleviate unemployment in South Africa. CID Working Paper No. 166. Harvard: Centre for International Development.

Mourshed, M., Farrell, D., & Barton, D. (2012). Education to employment: designing a system that works.

National Treasury, Confronting youth unemployment: policy options for South Africa, Discussion Paper, February 2011

Nudzor, H. (2010). “Depicting Young People by What They are Not: Conceptualization andUsage of NEET as a Deficit Label.” Educational futures 2 (2): 12–25

76

Paton, C. (2013) Study shows benefits of youth wage subsidy. Business Day Live 5 March 2013. Accessed on 20 March 2013: http://www.bdlive.co.za/national/labour/2013/03/05/study-shows-benefits-of-youth-wage-subsidy

Pellizzari M. (2011) Employers’ search and the efficiency of matching. British Journal of Industrial relations 49(1): 25-53.

Philip, K. (2012). The rationale for an employment guarantee in South Africa. Development Southern Africa, 29(1), 177-190.

Rankin, N., Roberts, G., & Schoer, V. (2012). The Challenges that Young South Africans Face in Accessing Jobs: Could a Targeted Wage Subsidy Help?.

Rankin, N. Gareth, R. Schoer, V. and Shepherd, D. (2012) Young people and jobs during the financial crisis. (ed)

Rankin N & Schoer V (2011) Youth employment, recruitment and a youth-targeted wage subsidy: Findings from a South African firm level survey.

Rees A. (1966) Information networks in labour markets. The American economic review 1(2): 559-566.

Rodriguez-Planas, N. 2008. Understanding Why Public Employment Services and Small-Business Assistance Programs Work at Getting the Unemployed Back to Work: Evidence from Romania. Working Paper. Universitat Autonoma de Barcelona.

Schöer, V., & Leibbrandt, M. (2006). Determinants of Job Search Strategies: Evidence from the Khayelitsha/Mitchell's Plain Survey. South African Journal of Economics, 74(4), 702-724.

Seekings, J. (2012a) How young people look for work (ed) in Coping with unemployment. Centre for Development and Enterprise, November 2012.

Seekings, J. (2012b). Entry into the labour market. Chapter 1. Draft report used for presentation at Carnegie Conference. University of Cape Town.

Singizi/DPRU (March 2010), Developing an appropriate Public Employment Service model for South Africa, Research undertaken for the Department of Labour and commissioned by GIZ

Solidarity (2012) The South African labour market and matriculants’ prospects.

Smith, J.M. (2011) Connecting Young South Africans to Opportunity: Literature review and strategy. Cape Town: DG Murray Trust. Accessed at http://www.dgmt.co.za/files/2011/05/Literature-Review-Strategy.pdf

Statistics South Africa (2012) Quarterly Labour Force Survey. Third Quarter

TIPS (Trade and Industrial Policy Strategies), 2010. Community Work ProgrammeAnnual Report 2009/10. TIPS, Pretoria

Van Reenen, J. (2003). Active Labor Market Policies and the British New Deal for the Young Unemployed in Context. Working Paper 9576, National Bureau of Economic Research.

77

White, H. (2012) What shapes young people’s job preferences? A view from rural KwaZulu Natal (ed) in Coping with unemployment. Centre for Development and Enterprise, November 2012.

Wurmli, A. (2010) Active labor market programs for youth in Africa. A framework for engagement. December 5, 2010.

Yu, D. (2012) Youths in the South African Labour market since the transition: A study of changes between 1995 and 2011. Stellenbosch Economic Working Papers: 18/12. October 2012

78

http://www.info.gov.za/speech/DynamicAction?pageid=461&sid=20345&tid=38379

http://dx.doi.org/10.1057/ces.2012.25

http://www.dgmt.co.za/files/2011/05/Literature-Review-Strategy.pdf

http://www.bdlive.co.za/national/labour/2013/03/05/study-shows-benefits-of-youth-wage-subsidy

http://www.bdlive.co.za/national/labour/2013/03/05/study-shows-benefits-of-youth-wage-subsidy

info.undp.org Web viewYoung People Navigating the Labour Market. Issues facing young people in...

Documents

Transcript of info.undp.org Web viewYoung People Navigating the Labour Market. Issues facing young people in...