When you don’t know what you don’t know: Solving youth (un)employment

Using impact data to inform investment and development strategies

As a management consultant I often have to develop investment and development strategies for donors and funders. In 2023 I got to conduct an impact assessment of a strategy I developed for the Momentum Metropolitan Foundation (MMF) in 2017. MMF has a strong focus on youth in South Africa, aiming to enable their life aspirations and sustainable earning potential through employment programmes and job placement. It was an amazing experience to test and confirm the impact of a strategy and portfolio I developed, and rewarding to acknowledge that there were critical (and humbling) lessons in the process.

When you know stuff

Developing investment and development strategies takes an enormous amount of time and effort. Why?

• Generally, clients have a basic idea of what they want to do, how much money they have and where they want to invest it, and of course what impact they want to achieve.
• These ideas are backed up by for example the opinions and expectations of the board, management team and development practitioners.
• For corporate funders it makes sense to align their investment strategies with strategic business objectives. For example, to invest in education as they need to recruit specific skills, and so there is a lot of logic in funding for example STEM subjects (science, technology, engineering and mathematics) and/or providing bursaries, because it means they are creating a pipeline of talent for themselves and their sector. For others it makes sense to invest in their future markets, and in MMF’s case equipping youth not only with financial literacy skills, but also supporting and preparing them for future employment.

When you don’t know stuff

What funders generally don’t know, and confirmed by Tshego Bokaba, group CSI manager of MMF, is a) who else is working on the same problem they want to address, b) what kind of interventions will deliver the right amount of impact for their investment, c) what kind of interventions are less successful or d) what are the risks and relationships required to ensure that the right approach will deliver the expected impact.

These questions are relatively easy to fix:

• Do benchmarking to see who is working on a similar problem.
• Work through evaluation reports to see what kind of intervention or combination of interventions will work best.
• Engage with subject matter experts to help design better programmes or identify partners.
• Do research to find out who has done this kind of project, what has worked and what lessons were learnt.

When you don’t know what you don’t know

The problem surfaces when you don’t know what you don’t know. The thing with youth (un)employment is that a lot of research about the size and scale of the challenge has been done, and many organisations are trying to address it. But the problem is escalating, so clearly, we’re doing something wrong.

The insights gained through impact assessments showed me and the MMF programme managers that there is so much we don’t know. It was the perfect opportunity to learn, as the objective in the MMF project was to find out a) why we are not moving the needle on youth employment, b) why dropout rates are so high, c) why completion and throughput rates are so low, and d) why young people are not being employed when we are giving them access to skills and experience. My hope is that collectively we can shed some light on the complexity of trying to solve the issue of youth unemployment, which is a core focus for MMF. While the impact assessment highlighted enormous successes and impact across interventions, it also showed that our current solutions are built on several myths and too many assumptions.

Insights gained

When we develop strategies and programmes, we often do not consider unforeseen risks. A glaring mistake on my part was not to consider worst-case scenarios when I develop strategies. While scenario planning is always part of the strategic development process, risk identification and management are lower priorities. There are three major risks that MMF and I did not foresee:

1. The covid pandemic: The pandemic caused most programme interventions to come to a complete stop for 12 to 18 months. Even when programmes resumed earlier, they were conducted virtually. Additional costs like data, computers and online curriculums were never catered for, as well as the negative impact of severe interruptions on students. Most students funded in development programmes come from disadvantaged backgrounds and their living conditions are simply not geared for online learning. Access to computers meant additional security risks and data costs which had a financial impact on students. Some students who were doing paid learnerships lost employment and have not been able to re-enter the employment market. This insight is critical as we expect more climate disasters that will abruptly interrupt programme interventions, and this is something we can prepare for better in future.
2. A declining economy: With all the best intentions the idea was that if youth were provided with technical and vocational skills, prepared for workplaces with job readiness skills and given practical experience, companies would appoint them. No one had foreseen that across the board fewer companies would appoint young people (or any other people for that matter). This means we are training people in a vacuum without any potential employment opportunities, unintentionally taking the hopes and aspirations we so carefully built away from them. Quite simply, there are not enough employment opportunities for unemployed youth and graduates in a declining and recessionary economy, causing lower absorption rate of programme participants.
3. The importance of the right partner: In the development sector, most programmes are designed and implemented by not-for-profit organisations. The assumption is that these organisations can deliver training more effectively and recruit participants from diverse communities. The biggest risk in working with social purpose organisations is however their failure to understand or work with local employers or non-existing relationships with the business sectors where youth can potentially gain experience as well as employment. We now know that specialist and for-profit organisations in the economy and specific industry sectors will know where employment opportunities are, what the employment and skills requirements are and how to match demand and supply.

We also never considered broader poverty and societal influences on youth employment strategies. Another mistake was ignorance about young people’s lived experiences.

1. Poverty: Most programme participants, especially those from disadvantaged backgrounds, have family obligations, precarious financial circumstances or health issues that prevent them from dedicating regular hours to skills building, working and job searching. And most programmes require a full-time commitment and attendance at specific times. We never consider alternatives like after-hour or weekend programmes, or times that would suit most participants because programme owners prefer office hours.
2. Gender and disability inequality: Most programmes do not cater for special needs. In general, very little effort is made for people with disability to ensure equal access to programmes and interventions or acknowledge that female participants who are primary caregivers have additional needs. One of our biggest mistakes is that we see the youth as a homogenous group defined by age, and we ignore or discount the impact of spatial orientation and location, gender or disability on programme outcomes.
3. Hidden costs: Very few programme owners consider attendance costs, such as students having to pay to get to classes (transport, accommodation and living expenses). Even if stipends are paid, such income is regarded as part of household income. When participants don’t turn in assignments on time (due to a lack of data) or don’t pitch up for classes (due to a lack of transport or childcare), we have difficulty in understanding low attendance or completion rates or high dropout rates.

The third issue is that we hardly ever consult the youth about their experiences and expectations. The collective mistake programme funders, designers and implementers make is that we develop programmes aimed at the demand side, i.e. specific sectors with greater potential for youth employment, without understanding what the youth want. The reality is that we focus mostly on entry-level jobs that require low skills (because we can scale programmes quicker). These jobs do not only provide low earnings with little opportunity for career growth, but are also mostly in the informal sector or sectors that are unattractive to the youth (perceived as old-fashioned) and sectors where job security is not guaranteed.

• Lack of knowledge: Young people in general don’t know what career they want to enter. Quite simply, they lack career guidance. The result is that we recruit people onto programmes but it is only once they hit the workplace that they realise it is not for them. In addition, youth are very clear on what they don’t want, and it is only in the workplace that they realise what adulthood is all about. Low-paying jobs are of no interest to them; they have much greater and higher aspirations.
• Lack of appeal: Most programmes are stock standard and do not match the youth’s interests. Most programmes provide some personal, workplace and technical skills and are designed to make young people employment-ready, secure employment and stay in employment. The content or careers however often do not appeal to the youth, in addition to too little remuneration for too much effort. The mistake is that older people and organisations generally design and implement programmes, but these programmes do not speak to the youth’s view of a future career. It is simply not their vibe.
• Lack of employment: The aim of youth employment programmes is – employment! Finding employment is however the most challenging aspect of any programme. Once the training and skills development component is completed, once the apprentice or learnership is completed, the young person is left to their own devices to find a job. And while many organisations try to connect youth to the workplace, the reality is that there are very few job opportunities.
• To find a job requires access to information, technology, networks and money to buy data, arrive at interviews, log onto platforms; meaning you need employment to have an income to look for a job.
• To find a job assumes that there are jobs available, but if there is no absorption capacity in either big or small, formal or informal companies, and you do not have the money or resources to start your own business, you are still stuck.
• The cost of job seeking is high – more than R1 000 per month.

Entrepreneurship as an alternative: The argument that young unemployed people can employ themselves if no one else wants to appoint them and that this solution can be brought to scale through special financing vehicles, maybe in conjunction with entrepreneurship training, lacks scientific evidence. The opportunities for starting successful, competitive businesses for young unemployed people with a poor education and minimal work experience are at best restricted. If such businesses are in the informal sector, they will likely be cut off from affordable financing and operate unproductively, with severely constrained growth opportunities. Even if they get their business off the ground, they will often find themselves serving a poor population in congested markets in which margins are wafer thin.

The biggest lessons

I work in a sector where we are trying to solve the world’s biggest challenges. We try our best every day; there is stuff we know and stuff we don’t know. And if we don’t know something, we try our best to find solutions. Even with the best intentions, we must however acknowledge that there is stuff we don’t know and we don’t know what that is. Solving youth unemployment may be one of those challenges that we will not be able to solve in my lifetime. This is what I now know:

1. As a sector we cannot compel government to improve education. And I cannot assume that this will change in the short term. The problem is that we assume we can train youth for the workplace, but a failing education system makes this task almost impossible. The system is more often than not delivering unemployable youth.
2. As a sector we can skill and equip, we can make it easier for the youth to have access to programmes, we can ensure that our programmes are geographically spaced to include youth in rural as well as urban areas. We can provide more than simply training and skills development and we can ensure experience coupled with qualifications. The problem is that we cannot assume we can do it alone; we need economic sectors in a growing economy that are creating job opportunities, and this cannot be done by a philanthropic sector without any political influence. We can assist and advocate, but creating a growing economy is outside our mandate. We need infrastructure to do this work; more specifically, we need to give people internet connectivity and data at a lower cost so that we can reach more people more effectively. We need large-scale support and more actors working together. It will require an entire ecosystem working in the same direction with a single-minded objective.
3. An enormous oversight is not paying enough attention to aspects such as tracking and tracing participants. While most programmes have detailed records from recruitment to completion, including the skills provided and numbers on workplace experiences, they stop short of the ultimate goal, whether the attendees have found employment (or not) and we don’t know how long the unemployment cycle lasts. The result is that participants keep attending training sessions to acquire more skills, but employment is often short-lived. This cycle of perpetual training, short work experiences and learnerships is clearly not working and we don’t know why. Until we do, we don’t know what we don’t know.
4. A crucial lesson was that we live and work in the now, trying to solve current challenges. But we don’t specifically know the future world of work. We assume formal employment as the only alternative to youth employment strategies. We focus on current demand from industry sectors, without understanding that future (as yet unknown) sectors will require a completely new set of skills. In future economies such as the green or renewable energy sectors, the digital, impact, care and solidarity economies are sectors where potential skills still need to be developed and far too little attention is currently paid to such opportunities.
5. We often assume that the youth need digital skills because the market wants data analysts, cybersecurity specialists, programmers and coders, etc. But with young people who can often barely read and write, there is a big disconnect. The digital world is changing fast and requires advanced skills. So yes, there is a need, but it’s not the only solution, nor is it a quick fix for youth unemployment.
6. Much more coordination is required on a systemic level. Too many people claim to create jobs. If it was true, we would not be where we are. Too many organisations provide youth employment programmes ranging from skills development and training to workplace readiness and work experience programmes, yet very few can claim to assist them with actually finding employment. Until we can place youth in sustainable employment and income-generating opportunities, and do so at scale, we simply don’t know what we don’t know.

* This article is based on extensive learning insights of the Momentum Metropolitan Foundation youth employment strategy. My sincerest thanks to the CSI team of Momentum Group Limited , Tshego Bokaba , Thabo Qoako and Nkosinathi Mahlangu for sharing their experiences and insights and for living the core values of learning and sharing knowledge with the broader ecosystem.

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