Many voices are calling for public-private partnerships to address the growing youth unemployment crisis, but to judge by action and results, the business world is waiting for someone else to step up to the plate.
It’s clear that corporate leaders are concerned. Unemployment and underemployment--especially among young people--ranked second on a list of top 10 global risks in the World Economic Forum’s latest survey of influential stakeholders.
And with good reason. Hovering around 13 percent, the global youth unemployment rate is almost three times higher than the same rate for adults.
Experts worry that the crisis is creating a “lost generation.” Many young people face either chronic unemployment or low earnings in informal work that can’t lift them out of poverty – especially in developing countries.
The private sector has incentives, resources, role models and partners to help reverse these trends, but it has been slow to take up the challenge.
The World Economic Forum says corporate action is urgently needed. The organization has invited 120 CEOs on its international business council to join a new youth employment drive.
“We believe the time has come for international business leaders to act decisively to reduce youth unemployment and create a brighter future for all,” said WEF Chairman Klaus Schwab and Coca-Cola CEO Muhtar Kent in an opinion piece published last month by CNN during the group's annual meeting in Davos, Switzerland.
While too many young people chase too few jobs, employers compete for a short supply of talent. Companies around the world struggle to find candidates with the right skills for openings, according to surveys by Manpower Group and McKinsey & Company. Many of those surveyed say recent graduates and new hires are not prepared for the job market, a key factor in entry-level vacancies.
As the global skills gap blights young people’s prospects, it also undermines business and economic growth and prosperity. All employers have a stake in closing the gap.
Large employers and industry associations have the financial and organizational resources to lead the way in developing young talent. Some have invested in interesting models that can be replicated:
- The Americana Group, one of the Middle East’s largest employers, created a foundation with other companies to address the mismatch between industry needs and the skills provided by the Egyptian education system. Through scholarship programs, university graduates and secondary and post-secondary students get hands-on training in skills that are in high demand. The foundation’s foresight and persistence have paid off. Since 1998, over 100,000 Egyptian university graduates have enrolled, and 93 percent of those who complete the program are employed.
- Costa Rica’s industry association of technology companies offers IT skills to vulnerable young people to fill the country’s many vacancies in the sector. With support from corporate giants like Cisco, Microsoft and Hewlett Packard, the association has designed certificate courses that combine technical education with language and soft skills training. Graduates are qualified for jobs that pay three to five times the country’s minimum wage.
Elsewhere, companies are working with national or regional nonprofits to develop and recruit qualified young people:
- The Harambee Youth Employment Accelerator partners with some of South Africa’s largest companies to help low-income youth find and keep their first jobs.
- Education for Employment works across the Middle East and North Africa to analyze the recruitment needs of client companies, to secure hiring commitments, and to deliver customized training to unemployed young people.
Sponsored by the World Economic Forum, the TEN Youth Program focuses on job creation as well as skills development. Multinational corporations from developed and emerging markets commit to hire, train and mentor 10 unemployed high school or college graduates in each of the major cities where they operate. India’s Infosys and Educomp and Jordan’s Aramex successfully piloted the program. The Forum plans a global launch.
Manpower Group lays out five courses of action for employers in a white paper published on the World Economic Forum website:
- Offer career guidance to youth and participate in information systems and programs
- Engage with youth training-to-employment programs
- Engage with apprentice and intern programs
- Commit to hiring, training and mentoring young people
- Promote youth entrepreneurship and entrepreneurial education and training
The world is four years into an economic recovery. Yet if anything, the fortunes of young people have declined. Respected organizations like McKinsey & Company, the World Economic Forum and Manpower Group have pioneered practical research and advocacy to improve their prospects. Now it’s time for the private sector to step up to the plate.