The Economy and Business Environment – without a silver bullet, we need collective action on the youth unemployment crisis

epa08508007 A painter displays a paint brush indicating his skill as he waits for work in the informal sector along with around 200 other job seekers at a road junction in Cape Town, South Africa, 24 June 2020 (issued 25 June 2020). According to a report released this week by Statistics South Africa the unemployment rate has reached a record high level of 30.1 percent up from 29.1 percent in the final quarter of last year. Africa's biggest economy was in recession before the coronavirus pandemic but lockdowns have further negatively impacted businesses and employment opportunities. The informal sector provides employment to approximately 30 percent of South African workers according to the World Bank. Cape Town is the countries epicenter of coronavirus SARS-CoV-2 which causes the Covid-19 disease. EPA-EFE/NIC BOTHMA ATTENTION: This Image is part of a PHOTO SET

By Kasthuri Soni

24 Nov 2022

No silver bullets, no scapegoats. The unemployment crisis demands a social compact across all stakeholders and institutions – to shift the levers that can accelerate youth economic inclusion, at scale.

We have all heard the statistics – that South Africa’s unemployment rate is the highest in the world, and that more young people are unemployed than employed. We know the data – that we are the world’s most unequal country. This is a status quo that we cannot be proud of.

We at Harambee Youth Employment Accelerator face these facts sharply every day. We handle on average 2,000 to 3,000 calls a day with young people and are acutely aware that South Africa’s young people are struggling to earn a sustainable livelihood.

There are the stories behind the statistics – stories like Nqobile Rathebe, who started hustling to make ends meet to pay for transport to university by selling cakes and washing waste bins. She now runs a successful eco-friendly mobile car-wash business, Nqo Trendz.

Young people show us time and time again that they are resilient – even hopeful – in the face of a real crisis. And while Nqobile should be commended for her resilience, it is not enough that she remains optimistic and has her own plan.

The scale, depth and complexity of the problems faced by Nqobile and many millions just like her are too significant to be solved by a single actor in the ecosystem. We need real, concrete, multi-stakeholder partnerships to address this challenge – partnerships that generate full-time opportunities, like those within the Global Business Services (GBS) and Digital industries.

While the West talks of the Great Resignation, South Africa is witness to “the Great Application”, with impact sourcing driving back-office tech support and customer service jobs to South Africa’s shores.

Over the next five years Harambee and its coalition of partners aim to pathway more than one million young people into opportunities across multiple sectors. (Photo: EPA-EFE / Nic Bothma)

This is a success story by all accounts. The GBS industry has grown, despite, perhaps even because of the crisis, with more than 50,000 jobs generated over the past three years, with the potential to generate between 250,000 and 500,000 net new jobs by 2030.

In particular, recent initiatives like the adoption of the GBS sector’s master plan have carved out at least 30% of jobs for inclusive hires – a huge step in the right direction to ensuring both job growth and economic inclusion.

These opportunities would not have been possible without real commitment to compacting and partnerships across institutions, stakeholders and even political parties. Similar progress is being made within the digital sector, with industry titans like Mteto Nyati partnering in multi-stakeholder coalitions such as the Digital Work Accelerator to solve critical supply-side challenges in the digital skills space. The initiative aims to restore and unlock critical digital jobs, conservatively generating 60,000 jobs in the sector.

And there are many such examples. Take Absa, which conceptualised and curated a cross-skilling project, in partnership with Harambee and BPESA, that enabled young South Africans from the hospitality industry to transition into opportunities in the GBS sector. Having lost their jobs in the tourism and hospitality sector that was decimated by the Covid-19 pandemic, these young people have been reskilled for new working opportunities with GBS employers in administration and support roles, as team leaders and quality assurers, and for sales and collections. This cross-skilling initiative has created jobs which bring in more than R3.5-million in salaries per quarter.

Generating jobs

There are more examples where the private sector has taken the lead to drive towards concrete and collective action.

For example, Merchants, a leading outsourcing service provider, recently launched a state-of-the-art contact centre in Soweto, bringing hundreds of new jobs into the township. Located behind the Jabulani Mall, this facility will result in job creation and enterprise development for young people. The partnership’s key focus is to increase employment and skills development as a direct response to the country’s youth unemployment challenge.

The Presidential Employment Stimulus is another successful government-led example of generating opportunities during the Covid-19 pandemic.

More than 500,000 opportunities were generated for young people – particularly in the most excluded parts of our country, and for our most vulnerable: young women.

The stimulus was an excellent proof point that also brought hundreds of civil society organisations together to address both unemployment and social challenges. Through its partnership with the government, Harambee serves as the National Pathway Manager, an anchor partner of the Presidential Youth Employment Intervention (PYEI), which is a national, coordinated response to the challenge of youth unemployment in South Africa.

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Over the next five years Harambee and its coalition of partners aim to pathway more than one million young people into opportunities across multiple sectors.

Furthermore, through the free multichannel platform, SA Youth, Harambee will support a network of three million young people with improved work-seeking that is free of cost, data-free, and that is premised on inclusion. This platform, which curates, aggregates and makes visible thousands of opportunities for young people across the formal and informal economy, draws on Harambee’s decade of evidence on how to break barriers that young people face in accessing employment.

Data barrier solutions

Harambee’s partnership with the government’s Operation Vulindlela has also helped specifically accelerate solutions to the barrier of expensive data and poor internet connectivity. Through a partnership with Operation Vulindlela and the PYEI, we have been able to draft a set of standardised municipal by-laws for the deployment of electronic communications facilities, moving us closer to the goal of increased connectivity for all.

The partnerships outlined above – driven by sector bodies like BPESA, by private sector organisations like Absa and Merchants, and the government-led partnerships such as PYEI and Operation Vulindlela – paint a picture of the suite of collective tangible solutions that can jointly tackle the complex challenge of youth unemployment.

At Harambee, we know that there will never be a single set of solutions that will “fix” youth unemployment in our country.

But we need a joint call to action for this moment of crisis. We must convene coalitions of business, government and civil society to mobilise around interventions that are needed to unlock new jobs for young people in priority growth areas of the economy. Hiring practices need to move away from exclusionary recruitment premised on prior work experience and unnecessary educational qualifications. Consideration should be given to alternative signals of a young person’s capability. The government, in turn, must shift existing spend on skilling towards outcomes-based results like job placements, and demand-led initiatives that respond to industry needs.

We must convene coalitions of business, government and civil society to mobilise around interventions that are needed to unlock new jobs for young people in priority growth areas of the economy. (Photo: EPA-EFE / Nic Bothma)

Industry and government alike need to rally behind an overhaul of employment incentives that can increase the absorption of young people, and review bureaucratic requirements that stifle entrepreneurship - including licensing and cumbersome registration requirements.

Unemployment is the crisis of our lifetime.

Given the sheer size of the problem, the need for intentional and focused intersectoral collaboration has never been greater and more urgent. There are no silver bullets but there is so much we can do as a collective – through social compacting. We must continue to work together to shift the levers that can accelerate youth economic inclusion, at scale. By engaging in deep, multisector, multiyear partnerships, we can go farther – and faster – together than we would have, alone.

Our young people demonstrate extraordinary resilience and optimism – they are tenacious, determined and have a strong desire to be productively engaged in the economy. We need to back them with intentional investment and support.

It is in our hands to create a better future for our young people, keeping their voices at the heart of everything we do. DM

Kasthuri Soni is chief executive of the Harambee Youth Employment Accelerator. Soni was a panellist at The Gathering event on 24 November, 2022.

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