Addressing the Youth Employment Challenge: Beyond the Skills Gap

For many young people, it’s back to school time; though too many millions are out of school altogether. Yet as global youth unemployment rates hit crisis levels, we recognize that even those in school are falling short in gaining the necessary skills to enter the increasingly competitive local and international workforce. Addressing the “soft” and “hard” skills gap with innovative and traditional workforce readiness is arguably seen as the prime solution and the top priority of both the public and private sectors.

Yet as important as education and skills acquisition is, understanding and meeting the youth employment challenge means recognizing that there is no single cause or solution. Indeed, it means addressing the skills gap. But, it should also mean a more dynamic approach that assesses and addresses other gaps that permeate both the supply and demand sides of the employment coin. This more comprehensive analytical and evaluative framework – a youth employment gap analysis - includes among others, matters related to wellbeing, youth and employer expectations, informational access, entrepreneurial sustainability, and policies and systems. Understanding and addressing the broader dynamics sustaining these gaps will require deeper analysis and greater engagement and alignment between public and private sector stakeholders, including business, government, educators, NGOs, and young people.

The Information Gap

Information gaps can have adverse effects on both employers and potential employees, and exacerbate the skills mismatch; youth may be unaware of employment opportunities suitable for their skill sets, while employers are unaware of the unique, innovative, and local potential workforce at hand. Greater access to information may not only bridge this fundamental market gap, but may also help to address the stigma and misconceptions youth and communities hold about certain employment opportunities and pathways.  In emerging economies, information gaps are often especially acute though, technology is increasingly helping alleviate these challenges, especially among youth. Souktel, for example, created a mobile-based job matching service where employers disseminate job opportunities through SMS messages, and potential employees are able to submit their CVs through simple SMS. 

The Entrepreneurship Gap

The continued constraint in securing a job is increasingly leading youth to be entrepreneurial.  Yet youth are challenged by limited access to necessary capital to begin and sustain enterprises.  On the supply side, the private sector is key in supporting incubation and engagement in innovative finance models, such as loan guarantees for youth-led enterprises.  And once SMEs are established, the public sector is a crucial force in facilitating the expansion of these small companies through policy and provision of an enabling business environment that pays attention to the unique needs of young business owners.  On the demand side, the private sector has enormous opportunity to support entry to local and global value chains to ensure entrepreneurial success and longevity.

The Policy and Systems Gap

Many of the most talked about interventions are programs that while necessary, are insufficient to scale.  The extent of the crisis needs comprehensive and integrated policies, institutions and systems that build human capital and strengthens skills, stimulates job creation, promotes youth employment, and supports decent work.  At the same time, it can be difficult to build consensus between multiple players with different motivations in the workforce and employment system.  For example, while governments might seek to build a more mobile workforce, the private sector may seek to promote specific skills acquisition through tailored training initiatives.

The Job Accessibility Gap

With job opportunities increasingly urban-based, inadequate or unsafe transportation infrastructure further compromises youths’ access to employment opportunities.  To fill this gap enterprising young people and thoughtful employers are providing transportation, shared ride platforms, or offering relocation support to help ensure that talented youth are not sidelined because they are unable to get to a work site.   Safer transport could also help to curb instances of traffic accidents and fatalities, the leading global cause of youth mortality.  Government incentives and shared investments with donors and the private sector could further boost business and job creation in more rural, agricultural, and inaccessible communities.

The Incentives and Expectations Gap

The gap between employer and young employees’ expectations, can also be problematic. The way in which the private sector manages its expectations of young employees, and youths’ expectations of their employers, are important but often overlooked considerations in workforce turnover.  Adjustments in employer expectations to recognize and utilize the skills that youth actually have, can help foster more inclusive and sustainable employment outcomes.  While young people may need to adjust their expectations for compensation, duties and level of authority as they build up their experience.  At the same time, negative perceptions associated with sectors with significant employment opportunities, such as agriculture and hospitality, may be an even more present challenge in societies where youth are particularly influenced by their parents’ beliefs and values. Employer incentives, and greater knowledge among young people and their families about career pathways, can be useful in drawing and sustaining youth interest in a broader set of jobs.

The Wellbeing Gap

It has been argued that employment outcomes are closely linked to other aspects of youth’s lives.  The inaugural Global Youth Wellbeing Index, released in April by the Center for Strategic and International Studies and the International Youth Foundation confirms this. Data analysis reveals that individual indicators within its economic opportunity sub-index, are correlated; and also affirm the connection between performance on education, health, safety and security, and information and communications technology indicators and success in employment and economic opportunity. Of the nearly 70% of the world’s youth represented in the Index, 85% were found to be living in countries with below average or low levels of composite wellbeing; pointing towards the need for more coordinated, integrated and cross-sectoral approaches.

Conclusion

Our collective prosperity and security rests to a large extent on the ability to harness the potential and productivity of today’s youth generation. Yes, we need to do more to ensure they are equipped with the skills and competencies that the job market demands.  But, we should not do this in a vacuum. If we neglect the broader set of constraints impacting youth employment, including and beyond those discussed here, success against this global challenge will continue to elude us.

Nicole Goldin is a senior associate in the Project on Prosperity and Development at the Center for Strategic and International Studies in Washington D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2014 by the Center for Strategic and International Studies. All rights reserved.