ARTICLE BY: Robyn Maclarty
PUBLICATION: Business Day - Empowerment
Unlocking SA's youth economic potential is a sustained effort, backed by various initiatives.
Despite a slight drop (0.2%) in the unemployment rate in the last quarter of 2022, leaving the official unemployment rate at 32.7%, global 'megatrends' (climate change, technological disruption, demographic shifts, a fracturing world and social instability) could see unemployment in SA rising above 37% by 2030.
That's according to PwC's 2023 South Africa Economic Outlook report - and considering that SA youth are the most vulnerable segment of the labour market, at just under half (45.3%) aged 15 to 34 unemployed, this trajectory will arguably hit them hardest.
'Countries like ours will be increasingly struggling with chronically high youth unemployment and underemployment, no matter what level of education these individuals have achieved, the report reads. 'Furthermore, if economies are unsuccessful in addressing these issues, they will face increasing social unrest.
Since countries like South Africa, with a low median age, will be struggling to address the youth unemployment crisis, the top talent and most entrepreneurial people will increasingly want to emigrate. This will further weaken the economies of their home countries.'
It's not a new problem, yet both private sector- and government-driven policies, strategies and programmes aimed at helping young people to transition from school to the working world have failed to make a significant dent in unemployment rates.
Corporate responsibility consultancy Trialogue reports in its 2022 Business in Society Handbook, released in early 2023, that businesses spent a substantial proportion of their annual CSR budgets on education and training. Education is supported by 98% of SA companies surveyed, and received 44% of CSR spend in 2022. Of this, 29% went to tertiary education and 31% to further education and training. This includes bursaries, learnerships, work-based learning placements and apprenticeships - arguably some of the most effective ways to prepare youth for employment.
SA's 50 TVET (technical vocational education and training) colleges, which fall under the Department of Higher Education and Training, offer a more affordable (than universities), practical path to employability by training and preparing students to become functional workers in a skilled trade. Recently, however, Higher Education, Science and Technology Minister Blade Nzimande announced that, worryingly, there were fewer registrations for TVET colleges for the 2023 academic year than in 2022.
"South Africa's TVET college syltem needs to be revamped to become more industry specific, in order for it to deliver value, says Melanie Jacobs, Sappi's global process owner of talent, performance and learning. 'Currently, the syllabus and system is out of touch with industry, and learners are being given false hope while attaining qualifications that are inadequate to equip them for the workplace. Similarly, the school system needs to be rejuvenated to focus on meaningful subjects that ensure greater workplace readiness for our country's youth. While industry is doing what it can to supplement the training and skills gaps that exist in the country, there is not enough pressure on the sector education and training rities from a collective industry level to galvanise these much-needed changes.
With every year that goes by that this remains the case, another generation of youth enters the growing numbers of the unemployed and unemployable!
Sappi Southern Africa for its part, has a more than 90% retention rate for its diplomates-in-training, graduates-in-training, process trainees and app-renticeships. Workplace experience and work-integrated learner retention numbers are lower, the company reports, because of the high numbers that Sappi SA accommodates and the relatively low vacancy rates. Its target is 20% absorption, though some years, this figure increases to a 40% retention rate.
The Sappi Skills Centres - at Saiccor mill in Umkomaas, KwaZulu-Natal, and Ngodwana mill, Mpumalanga - also provide learning opportunities and empower local unemployed youth to use their skills to venture into formal employment or entrepreneurship. Intake averages at about 425 learners per annum, 48% of whom remain economically active after training, finding jobs or becoming self-employed.
In the rural arena where Sappi SA operates, the Sappi Abashintshi Youth Leadership Development programme offers asset-based community development training, which teaches young people to identify capabilities, focusing on mindset and building resilience. The initiative started as a mobilisation programme as part of Sappi's strategy to build sustainable relationships with communities surrounding its operations, and has grown into a youth leadership venture where young people embark on different activities. The youth who show strong entrepreneurial acumen are mentored and guided by the Sappi ESD (enterprise and supplier development) team to look at ways to grow into business owners. There are at present 91 active Abashintshi beneficiaries, who have received two years of training through Sappi.
These achievements, while no doubt life-changing for the beneficiaries, are a drop in the unemployment ocean.
Large-scale impact is more likely to come from a dedicated programme that is plugged into multiple industries within the private sector... Which is what Youth Employment Service (YES) - a business-led collaboration - is. No single programme can directly generate enough youth jobs to compensate for South Africa's lack of economic growth. However, if programmes are catalytic in their structure, they can have a longer-term multiplier effect that far exceeds the direct jobs created,' says Ravi Naidoo, CEO of YES. With 1400 sponsoring clients (including Nedbank, Bidvest Protea Coin, Anglo American Platinum, Shoprite Checkers, Volkswagen SA, Investec, Nestlé, the Foschini Group, Ford SA and Toyota SA), YES is well-positioned to connect youth from disadvantaged backgrounds with employment opportunities.
Working with businesses to place or sponsor unemployed youth in meaningful 12-month work experiences that are fully funded by the private sector, the programme equips young South Africans with the critical experience, social networks and skills they need to develop their careers.
According to YES, in the four years since it was established, it has created more than 105 000 work experiences, while 40% of YES alumni are employed soon after they graduate from the pro-gramme and 15% of all YES youth are involved in entrepreneurial activity. Through YES, R6 billion has been injected into the economy through salaries. Many of the jobs are being created in future-facing industries such as drones, tech/ICT, creative, the green economy, tourism and global business services.
These numbers sound impressive - and they are - yet they're but a fraction of the 4.6 million unemployed youth.
Naidoo and his team, however, are playing the long game.
'Government needs to work closely with the private sector to achieve the levels of economic growth we need to create the sufficient numbers of youth jobs, according to Naidoo. This includes making radical changes to improve the quality of public schools, ensuring that vocational training institutions are partnered with industry, and that the regulations are reformed to promote employment and SMEs.
'The National Development Plan projected that 90% of jobs by 2030 would have to come from small businesses. YES is a critical component of the long-term solution for South Africa's youth unemployment, creating a pipeline for young talent from poorer communities. The YES initiative has created a successful mechanism for the private sector to offer support to the critical goal of social mobility.
'If we get as many of our talented youth as possible into meaningful roles in the economy, they will be able to generate the jobs and future-facing businesses that South Africa so desperately needs. This can be done through unleashing the potential of the country's youth by creating a talent pipeline for young people from poor households to enter the economy.'
Amendment to the Gazette