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Youth Employment Service Growing SA’s Taxpayer Base

Each year South Africa faces an ever-diminishing taxpayer base and deepening inequalities, moving us further from a sustainable future. With fewer payers and lower contributions, more people are dependent on the fiscus for survival.

South Africa must get young people working. Reducing unemployment holds massive benefits for business, More people employed increases GDP and consumer spend, creates prosperous markets for business growth and reduces inequality and the burden placed on the small base of taxpayers.

Creating that first job for youth places them on an economic ladder that grows them into contributors and is the surest way to reverse our unsustainable trajectory.

It all starts with a first opportunity. Youth voices are heard echoing the refrain: “I can’t get a job without experience and I can‘t get experience without a job”.

Research by the Youth Employment Service (YES) shows that “employers place the highest value on relevant work experience, a tertiary qualification and a good interview”. Currently, education status is one of the strongest determinants of employment in South Africa.

Young people are therefore caught in structural traps — over 50% of youth have dropped out of an education system that ill prepared them for the working world. Skills mismatches between what youth have and what the economy needs keep youth locked out.

South Africa’s youth unemployment rate, which was the worst in the world before lockdown, is now over 70% for those without matric. Over 9 million young people are not in education, training or employment.

In a recent YES survey of over 430 hiring managers. managers indicated that they would be least comfortable hiring candidates who are unemployed and are less comfortable hiring youth in general. This is a standoff within which South Africa’s future is trapped.

“The YES programme is a win-win-win for country, company and youth”

YES is a business-led NPO and collaboration between businesses, government and labour that seeks out groundbreaking ways, through innovation and technological best practice. to reignite the economy and give youth a dignified first chance in the workplace In return. businesses gain up to two levels on their B-BBEE scorecard. With no state funding. YES has already created over 50 000 work opportunities for South Africa’s youth in just over 112 weeks of operation. which translates into R28 billion injected into the economy through youth wallets. and the number keeps growing.

Innovation in employment with the Youth Employment Service

To break the stand-off, we need to nd alternatives to get youth into work quickly. drive learning-by-doing. and skill youth through short course accreditation and company training programmes. YES offers an incentive for business in the form of one or two B-BBEE levels to companies if they simply offer a one-year workplace experience to black youth. Over 1 378 businesses have registered with YES and together have broken the cycle of unemployment for over 50 000 youth in just 112 weeks of operation. Hundreds of companies have gained B—BBEE levels through the programme.

YES has seen R2.8 billion in youth salaries committed by the private sector, money which goes straight into youth wallets. This creates a cascade of effects which fights disillusionment and despair, offering households dignity and hope. Clients who benefited from YES and joined the fight against lifetime unemployment include WV, Nedbank, Investec, Shoprite, ABSA, Ford, Toyota, Telesure Investment Holdings and many more.

Multiple years of related work experience is the most desirable trait in lieu of a degree, according to YES’s research (refer to the figure below). A quarter of all managers indicated that two or more years of related work experience would “entirely” compensate for having only a metric certificate. The YES year thus starts to compensate for the lack of a degree. These findings highlight the value placed by hiring managers on “learning-by-doing” methods. The CV and reference letter gained after the YES year form a powerful credibility builder. Research shows experience on a CV triples the likelihood of a call-back within three months of job searching. A reference letter doubles the chances of employment for women.

In addition, YES Youth receive a smartphone loaded with apps which deliver digital work-readiness modules, zero-rated by Vodacom. Youth are learning soft skills through the modules and applying these in the workplace. YES has surpassed 7.3 million learning minutes on the apps, making this one of the most successful digital-leaming programmes in the country.

A de-risked recruitment funnel

The YES programme further offers labour flexibility to hiring managers. Large cohorts can be recruited, and the YES year used as a filter to select the best-fit candidates or the ‘gems’ as former VW country manager Thomas Schaeffer put it. Managers in our research indicated that the flexibility of the YES year mitigated their requirement for experience by allowing more room for recruitment mistakes, thus increasing their willingness to take on more youth to build a wider recruitment pipeline and increase the benefits of skills transfer and fresh thinking.

All that glitters is gold

The YES programme is a win-win-win for country, company and youth.

Not only do YES’s efforts mean more taxpaying citizens and thriving businesses but YES offers companies the benefit of moving one, or two B-BBEE levels up. All you have to do is create the target number of work experiences and benefit with a B-BBEE rating increase of one full level. You can gain two levels if you double your target.

This is a unique YES benefit over and above the standard B—BBEE scorecard elements. YES benefits and processes have been gazetted into legislation. Businesses can only receive level-ups working through YES. Targets are calculated in one of two ways, with the highest becoming your target.

How to calculate your target:

– NPAT: Average NPAT over 3 years x 1.5% divided by      R55 000

– Headcount: Headcount x 1.5%

 

Can‘t host youth yourself?

A company can sponsor youth to work in one of YES’s 28 vetted implementation partners, situated all over the country and in a range of sectors from education and conservation to healthcare and digital.

A company can have social and environmental impact through youth placements across sectors.

This is a no-admin package; the implementation partners handle everything from recruitment to payroll and even aid in absorption at the end of the year.

What are the costs?

Fee packages are based on the net profit after tax (NPAT/revenue of your business.)

The fees pay for the B-BBEE level process, phones, zero-rated modules, and monitoring and evaluation of youth and work experiences through the apps.

Immediate and long-term impacts of YES

One in three YES Youth are currently absorbed. Businesses are in awe of the raw talent they have been able to harness.

Adam Craker, CEO of IQ Business was extremely impressed with the YES Youth cohort. “In these times of adversity. we require a young and capable team to maintain momentum. [Of the YES Youth we took on last year], 94% of them have been offered full-time employment.”

85% of YES Youth come from grant-recipient households. Can you imagine the vast ripple effects your company can create in communities, just through building one income in a family?

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