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Turning the Tide of Youth Unemployment in South Africa

Youth unemployment has reached crisis levels in South Africa, with only 1 in 3 youths of working age employed. The high level of youth unemployment has far-reaching implications across sectors:

  • Social Sector: More than 12 million young people face limited earnings potential and a life on the margins of the economy.
  • Government Sector: The country faces the erosion of skills and human capital that comes with prolonged joblessness and an ever-growing number of people reliant on state grants, placing significant pressure on government resources.
  • Private Sector: The struggle to fill entry-level jobs with good, skilled workers creates growth constraints for many businesses.

Several challenges have contributed to the crisis:

  • A mismatch between the skills required by employers and the skills of young work-seekers: The current education system is leaving young people, particularly from disadvantaged backgrounds, under-qualified and unprepared for available jobs. Young people often lack the necessary problem-solving skills, business acumen, technological savvy, and communication skills required for the workplace.
  • Poor market mechanisms/inadequate market information: The current system makes it hard for disadvantaged youth to find job opportunities, and for employers to find entry-level candidates.
  • Outdated HR systems, structures, and processes that favor experienced workers over first-time job seekers and lack on-the-job training.

However, there is a remarkable opportunity to turn around the situation, with over 500,000 entry-level jobs available today across a range of sectors in the country.

Stakeholders across different sectors are mobilizing to act, with government revising frameworks and resource allocations and introducing a Youth Wage Subsidy, business supporting inclusive hiring as part of the shifts in governmental policy, and training providers working to better align their offering with private-sector demand.

Taken in isolation, the interventions of these different stakeholders are promising. The biggest impact on youth unemployment, however, comes when these activities intersect.

Our new report, Reducing Youth Unemployment in South Africa, explores the ways in which cross-sectoral partnerships throughout South Africa are turning the tide of youth unemployment, with wide-spread social, policy, and business implications. In the report, we highlight 2 promising initiatives that demonstrate the value of these partnerships: the EOH Youth Job Creation Initiative and the Mentec Foundation.

These case studies reveal important actions and considerations for other actors wanting to address youth unemployment through cross-sectoral partnerships:

  • Private sector involvement is most powerful and sustainable when driven by business imperatives. Employer commitment should encompass senior management buy-in and practical implementation capacity and willingness.
  • The role that government can play is multi-fold. Government, typically a large-scale employer, can set the tone for youth-focused hiring and employment. More broadly, it can create legal and policy frameworks that actively encourage inclusive hiring. Incentives that directly address the cost and risk of hiring young people and are easily accessible by employers can be a powerful tool. Lastly, government can fulfill an important coordination function by bringing together relevant stakeholders to direct activity towards the shared goal of lowering youth unemployment.
  • Philanthropic funding is vital to support experimentation and innovation to remove some of the barriers that keep disadvantaged youth locked out of opportunity. Funders can also play an important part to build and popularize the case for the expanded involvement of employers and government in partnership-based solutions to youth unemployment.

To learn more about how cross-sector partnerships are having a positive effect on youth employment around the globe, read Collective Impact for Opportunity Youth, a framework for communities in the United States working to improve outcomes for youth between 16 and 24 who are unemployed and not in school.

What other ways do you think sectors can partner together to reduce youth unemployment?

Read Reducing Unemployment in South Africa >

Learn more about FSG’s inclusive markets approach >

 

 

 

 

Harvey Koh

Managing Director

Vignesh Shankar

Associate Director