With 200 million unemployed youth in Africa, and this figure projected to double by 2045, youth unemployment is one of the continent’s greatest challenges. Closer to home youth job creation is top of every party’s election agenda and certainly weighs heavily on leadership across the business, education and political spectrum.
While our politicians celebrate employment numbers ‘higher than they have ever been’, the reality is that our lagging economic growth rate and very high unemployment rate of 24.7% demands that we look beyond the rhetoric. We need to ask seriously if our current strategies for creating jobs are going to stem the tide of this problem.
The Big Issue
The Government has called upon the business sector to be part of the job creation solution, and with youth unemployment outstripping economic growth, it is clear that there is an urgency to deal with this is a real burning bridge for the country.
Three causes of concern come to mind, namely education, graduate unemployment and small business growth.
That our education system is falling short of expectations is well known, yet education establishments still seem to see their role as one of passing students, rather than meeting the needs of the economic sector. Not only is the value of today’s matric questionable, but too many South African youngsters are graduating at tertiary level without the skills that businesses need or want.
As an employer, this is a problem – too many candidates with qualifications are lacking the skills that are really needed by business, such as computer skills, communication skills, teamwork and an understanding of the workplace ethic – basics like arriving on time, working hard and consistently delivering 100% (not 30%). Formal education is vital and valuable to develop critical learning, analysis and interpretive skills, but in a tight market the employer needs more. Employers need people that are ready to work.
Whilst youth unemployment is a problem generally, graduate unemployment is an area of even deeper concern. Not only do graduates represent a financial investment from which the country should be reaping rewards – in innovation, development and economic growth – but in a country with a severe skills shortage even one unemployed graduate is simply one too many. In such a skills-scarce country, we must question why some recognised tertiary qualifications still result in a high likelihood of unemployment, for the impact of this will haunt us for generations.
The third area of concern is our poor economic growth, and with the economy struggling to make 2.5% GDP growth, South Africa is lagging behind many of our African neighbours who are galloping ahead at rates of up to 8 and 9%. This is a worry for two reasons, firstly because business success is the generator of tax revenue on which the infrastructure of the country depends and on which Government draws for service delivery, and secondly because business is the only sustainable generator of jobs. Simply put, without growing businesses, there can be no growth in the job market.
And the solution is…
Nowhere in the world has a simple, lasting solution to the challenge of youth unemployment been found. Country fortunes may rise and fall, but there is no silver bullet to this complex issue. Whilst government setting the intention to create 6 million jobs is a good start, just making this a goal is not enough. What is needed is pragmatism, not rhetoric. A few simple solutions could go a long way to improving the situation.
Firstly, education needs to get closer to the client it really serves – namely the business sector. A genuine two-way dialogue between academia and business will go a long way to bridging the shortfall between qualifications and employability. Academics should be encouraged to understand business realities by themselves interning in business and gaining the practical understanding of the value of the skills they teach. Alongside this closer collaboration we need proactive strategies in education to cultivate a business-like climate that sets 100% as the goal – after all, a product or service in which only 30% actually works is simply unacceptable.
Secondly, the end goal of creating a productive workforce needs to be the priority. The widespread practice of handing out worthless qualifications disguised as ‘your ticket to a better future’ needs re-examination, and students should be informed of the true practical value of their certificates before they register for any course. This will challenge those institutions whose livelihoods rest on the delivery of ‘fast-food’ education that has little relevance and even less value in the real world, and will go a long way to ensuring that our country builds a promising future.
The acid test would be for employers to rate the skills of a cross-section of graduates – but I wonder how many institutions, if any, would have the courage to implement that as a monitoring and evaluation strategy?
A global problem, a South African Solution
One powerful solution to all three of these issues, namely relevant education, graduate employability and business growth is the concept of internship, or work experience. Whilst internship has traditionally been the domain of large business and certain specific industry sectors, its value as a tool for growing the small business sector is yet to be fully appreciated. A graduate intern in a larger corporation is often just a number, but one good graduate in a small business can add significant value, and even be a catalyst for business growth. This growth often translates into longer term employment for the graduate as well.
Add to this mix the recent Youth Unemployment subsidy that offers up to a 50% rebate on stipends up to R6000 per month, and you have a three-way benefit – to small business growth, to graduate employability and through a long-term return on tax-payers money, in the form of South African graduates who have the ability to boost economic growth and create a slipstream of success for others. Given the choice to invest my money on subsidising a graduate or a youngster without education, my money would be on the graduate.
One initiative, the Graduate Asset Programme (GAP), seeks to achieve this three-way solution by working with key education institutions, businesses and recent graduates. Statistics show that 30% of internships translate into longer term placement, and where the business is growing, this creates genuine and sustainable job opportunities. The goal of GAP is to bridge the gulf between academic qualifications and the real needs of business, by matching 24000 graduates to small and medium host enterprises. The ethos is to support growth in the host business with the assistance of these young, energetic graduates, whilst providing grads with much needed work exposure. The initiative is very much business – needs driven, and seeks to create a genuine win-win for the business, the graduate and the country as a whole.
While many graduates exiting tertiary institutions may still be ‘diamonds in the rough’, our own experience has shown that graduates are often eager to shine and can deliver very valuable work, especially in the SME sector, where flexibility and youthful energy is highly valued. Whilst it is true that some South African graduates may not be the finished article, investing a bit of time and energy in them through internship seems to be a smart investment in our collective future as a nation.
Catherine Wijnberg is a successful female entrepreneur and strategic thinker in the field of small business growth and development. She is Director and Founder of Fetola, who generate accelerated success for SMEs across South Africa. Catherine has owned and operated businesses in three countries across five different sectors, including agriculture, transport, tourism & craft development. She holds a Masters Degree in Agriculture from the University of Queensland and an executive MBA from Henley Management College