Stats SA’s recently released Q1:2017 Quarterly Labour Force Survey indicates a 14 year high of 27.7% unemployment, and youth statistics are even more alarming with 58% of our population below 35 years of age being unemployed. Given that 67% of our population are below 35, we need to start addressing employment opportunities through collaborative programmes with government and business. We discussed this at our recent Thought Leaders breakfast hosted by Old Mutual with Colin Coleman, MD of Goldman Sachs and Maryana Iskander, CEO of the Harambee Youth Employment Accelerator.
Colin Coleman, together with Stephen Koseff of Investec, are leading the Youth Employment Services (YES) Programme as part of the CEO Initiative – which is a collaboration between business, government and labour. Colin explained that the programme has consulted with a cross-industry team of CEO’s and aims to provide internships for 1 million youth over a three-year period. Different industries will be able to absorb interns at different rates, and the cost of the R16.5 billion programme will be split between business and government.
By working with SARS and Treasury on incentives for business, companies who are part of the programme will have an Employment Tax Incentive rebate when employing 18 – 29 year olds. Requirements are that companies must employ a person who has never worked for at least 6 months, and companies cannot use the same intern more than once. To engage SMEs, the dti may create additional B-BBEE credits that can only be gained by hiring YES interns. Government funding to support the programme will potentially come from UIF and the SETAs. Deputy President Cyril Ramaphosa has formed a committee to engage on this key issue. A soft launch is planned for September 2017 with 20 early adopting companies as champions of the programme, and in early 2018 it will begin full operations.
Maryana Iskander explained that Harambee Youth Employment Accelerator was started in 2009 and now places over 35 000 interns by working with business. She highlighted South Africa’s exceptionally high unemployment, with youth unemployment standing out globally. With a schooling system that is woefully underdelivering, particularly in Maths/Numeracy (SA is ranked 140 out of 140 countries in the WEF’s Global Competitiveness Report for the quality of our Maths and Science education), we are creating school leavers that struggle right from the start. Harambee have, however, identified that academic qualifications are a poor reflection of actual ability and are working with corporates to structure their assessment methodologies so that they are able to identify future potential in candidates rather than judging them on past shortcomings.
Another reality is that 80% of jobs are not advertised and jobs are usually gained through networks. The youth from disadvantaged backgrounds are often in communities of people who are themselves unemployed, with no network to leverage when looking for work. Harambee addresses these issues by working with 350 companies to help them find candidates, but also understand holistically what is impacting on each candidate’s success. The cost of seeking employment is often overlooked by employers, but travel costs can be expensive and candidates need help upfront simply to be able to get to work. Some candidates may need part-time options to learn and earn at the same time. They also work with candidates on “soft skills” to prepare them for the world of work.
South Africa has enormous untapped potential, that simply requires the right partnerships to unlock. Here are some realities of South Africa’s situation:
- 44,5% of youth aged 18 – 24 have an education level below matric, only 36,9% have matric.
- Only 5% of our school leavers go to university and 45 – 63% drop out.
- While we desperately need artisanal skills, only 8% go into artisanal training and 85% dropout.
We need to start tackling this mammoth challenge and our corporate members can help address our youth unemployment crisis by getting involved in these various initiatives.