On the occasion of the 2017 World Youth Skills Day, which has the underlying theme of “Skills for All”, this blog post reflects on the serious challenge of youth unemployment. It looks forward and shares practices regarding how the problem can be addressed in a sustainable and scalable way.
At present, 156 million or 38% of working youth are in extreme or moderate poverty, compared to 26% for working adults. Of course, poverty and unemployment are not comprehensive markers, and factors such as ethnicity, gender and economic/social status (orphans, internal migrants, returnees, rural women, victims of gender-based violence, migrants) also influence entering, returning to or integrating into the labour market. It is easy to describe the problem, but it is not simple to find sustainable and large-scale solutions to the challenge. In many instances, even if there are proposed solutions or interventions, they address symptoms rather than root causes and hence becoming short-lived and limited in scale.
Lack of relevant and matching skills
Skills mismatch remains a challenge between young people coming out of educational institutions and potential employers. Training and education institutions provide low quality and less relevant skills. There is the lack of effective mechanisms/platforms for dialogue between employers and educational institutions. Kosovo is a good example: across many sectors, businesses continuously report that the level of skills and qualifications of the workforce is not in alignment with their requirements. The county spends too little on education, and a disproportionately large share of the spending goes to wages. Nepal is another example where an estimated 500,000 young people enter the labour market every year but with little prospects of finding gainful employment.
Solutions, however, should look beyond formal vocational education and training; they need to include nonformal and informal types of training. Young people need a different type of skills to meet the different challenges in life: foundation skills, technical skills, and transferable skills. In Albania, for example, there is a growing awareness that both formal higher education and vocational training programmes have not catered to the demands of an increasing number of un/underemployed and disadvantaged youth. The project RisiAlbania tackles this problem not just by supporting the improvement of the skills of young women and men, but also facilitating the designing and implementing interventions for labour market insertion. It supports to make the content, delivery and performance evaluation of non-formal skills training private sector-driven and therefore more financially attractive to training receivers, providers and employers. Part of the facilitation also focuses on re-orienting youth towards training that enhances their employability: for example, a number of young people presently focus on language and cosmetic courses even though this does not significantly increase their employability.
The need for adequate and relevant labour market information
Even if good education and training systems are available for young women and men to have better skills, they lack an adequate and a relevant job and career information to make a fact-based decision on which career, what field of study, or which schools to choose. Most decisions by young people and their parents are made on their perceptions and biases.
Through the facilitation of RisiAlbania, leading job matching portals can now offer new value added online services to businesses and young job-seekers and further increase their outreach through a free mobile app. In addition, national media in TV, radio, print and online have the capacity to develop and broadcast programmes on labour market information that is relevant and attractive to young women and men.
The EYE project in Kosovo supported the development of job matching service through marketing and new value-added services. The initiative targeted commercially sustainable operations within the few promising private job matching firms. The incentive was increased and sustained profits. This increased awareness of the benefits of job matching services to young job seekers and to private employers, and helped ensure the relevance and sustainability of services to address the needs of young job seekers and private employers.
Increased demand through improved private sector investment
Weak labour demand by the private sector arises due to insufficient business and financial services as well as inadequate business environment. Private companies lack quality and accessible business services for investment in high potential sectors.
The MarketMakers project in Bosnia and Herzegovina supported private sector enterprises in sectors such as ICT and tourism to adopt new business practices in how business is conducted – from the adoption of new roles and responsibilities at various levels of the company through to buying-in or offering a new product/service or overhauling the existing business model entirely. All new practices seek to be growth-oriented in nature such that the adoption of these new practices are directly correlated with improved sales and increased revenue.
Stimulating private sector investment can be undertaken through co-financing feasibility studies, linking businesses to specific and tailored support services such as technology and business know-how transfer arrangements, supporting internal human resource improvements, and providing mentorship in developing products and services that are in compliance with quality standards.
Investment by the private sector is also inhibited by lack of suitable financial products. For improving access to finance, RisiAlbania facilitated the availability of information on seasonality, which led to the development of a continuously updated source of sector information to banks. In the tourism sector, RisiAlbania stimulated participatory research to create the necessary environment for the establishment of a national competition for product development. The institutionalisation of this competition supports the continuous diversification of the Albanian touristic offer and increase the duration of tourists’ stay and the extension of the touristic season. More tourists staying longer means increased investment in hotels, tour agencies and other related services.
In Kosovo, lead companies have started to improve their human capital management practices. The Young Growing Businesses Initiative supported pilots involving different young companies, which pool their resources in order to access markets abroad. The support increases accessible and quality marketing services to the companies. With the Municipality of Pristina, EYE has supported the establishment of a business-hub, which provides young entrepreneurs with affordable office space and services.
Two key messages stand out from this blog post relevant to the “Skills for All” theme of the 2017 World Youth Skills Day. First, youth unemployment requires identifying root causes, not just symptoms. We all know the gravity of the problem; what is important is to understand why the labour market system underperforms or fails in creating jobs for young women and men, increasing their employability. This also includes ensuring a socially inclusive labour market as a process of improving the terms for different young women and men to have gainful employment – in terms of income (productive work), satisfaction (motivation, sense of goal achievement, and positive morale) stability (job security and tenure). This is an essential prerequisite for successfully reaching different youth categories. For example, as part of the analysis of why labour market systems underperform/or fail, experience shows that the more clearly the target groups are defined and specific strategies outlined, the more demands-oriented will be the solutions will be to address key constraints of labour markets system.
Second, solutions proposed to tackle unemployment, particularly for young women and men, will not work or will have limited impacts unless they focus on holistic or integrated dimensions of labour markets system. A labour market is composed of supply, intermediation and demand. Around these three dimensions come labour market policies and regulations to improve the quality of jobs. In other words, the solutions need to address skills mismatch (the “wrong” qualifications), lack of means or tools to find potential jobs (the “wrong” jobs) and weak private sector investment (“few” or “no” jobs).
Zenebe Uraguchi is a development economist with multi-country experience working for a multinational private company, an international development bank and a research institute. He currently works with HELVETAS Swiss Intercooperation, based in Switzerland, as Programme Coordinator for Eastern Europe and Senior Advisor in market systems development. His area of interest is in development approaches specifically focusing on labour economics, development finance, and monitoring and result measurements.
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Cover picture: EYE Kosovo