Conventional wisdom assumes that if a young person can just get a first job, they will stay in work. Recent research shows this is not the case. Our labour markets look more like a trampoline than we think: inexperienced work-seekers often fall out of and bounce back into work every few months.
South Africa has one of the highest youth unemployment rates in the world. Within a year of leaving school, nearly two-thirds of young people find themselves out of any system of employment, education, or training. While getting a first job can lead to long-term work, there is evidence that a substantial number of young people change jobs regularly, moving in and out of work, and that they will never end up in long-term employment. This is more likely for certain demographic groups like youth, and for low-income earners.
A recent study looking at the employment journeys of 150,000 young work-seekers from Harambee Youth Employment Accelerator finds that typically only one in five secure work that lasts longer than three months. Three months. That’s it. And an additional one in four find erratic work lasting even less than three months. This finding is supported by employee income tax data submitted to the SA Revenue Service. It shows that only half of the annually registered jobs are stable from one year to the next – meaning that only one out of two people occupying a job in a given year will continue to be in that job in the following year. Significantly, those most affected by this kind of churn are at the entry-level and with lower levels of pay.
Getting a first job isn’t going to be enough, even in a tough economy where jobs are scarce as it is. Young people also have to be equipped to bounce back in when a short-term contract or work experience comes to an end.
This reality challenges policymakers and practitioners to approach labour market interventions very differently. What will help?
The National Income Dynamics Study, which has surveyed a sample of the same South African youth over a period of 11 years, finds that having some work experience more than doubles the likelihood of being employed. (Conversely, it also finds that certain characteristics make it even harder to find work. For example, a work-seeker who is young, female, and from a poor household or lives in a rural area, has less than a 25% chance of finding sustained employment compared to men from urban areas with more household income, who have a 37% chance.)
Other factors count, too. Access to some household income (which can support the costs of job-searching) increases the likelihood of being in a job for longer than three months, while Harambee’s data shows that good communication scores on assessments also increase the likelihood of finding longer-term work.
Given the importance of prior work experience for securing more sustainable work, we must do more to help young people access opportunities to grow their employability. These opportunities can help them improve the attributes required for work (such as communication skills) that can, in turn, increase their chances of getting a longer-term job.
It is also important for young people to know and be able to communicate credible information about their abilities to potential employers. A recent study completed by Harambee, Duke University, Oxford University, Stellenbosch and the World Bank, shows that when young work-seekers are given a summary report of their skills to share with a hiring manager, their likelihood of finding work increases by up to 17% and their earnings by up to 32% compared to a similar group who didn’t receive the report.
In turn, employers need to probe what they need from a successful job applicant. Businesses often use school marks and qualifications to sort through large numbers of CVs when the qualification may not actually identify the best person for the job. More often than not, what is needed also relates to behaviours and work-readiness. Giving employers better information about the actual abilities of young people can improve the quality of the match and can have a big impact on job success and retention.
There is a growing global consensus that today’s education is not delivering for tomorrow’s jobs. And the accelerating disruption of technology is rapidly reshaping labour markets where more people will navigate careers of self-employment and entrepreneurship.
The era of expecting a straight line from a matric certificate (or even university degree) to a permanent contract with a corporate employer is long over. We need to build policies and practices around the “zig-zagging” lines that are the reality facing young work-seekers in the South African economy. We need solutions that manage pathways for young people successfully in and out of work – helping them see where they are now and what they can do next.
Encouragingly, the Presidential Jobs Summit Framework Agreement adopted pathway management as a critical initiative to be delivered by government, business and social partners – this includes the work of Harambee, the Youth Employment Service, the National Youth Development Agency, the Department of Employment and Labour – and scaling up successful initiatives like the Gauteng Provincial Government’s Tshepo 1 Million programme.
Perhaps most importantly, we need a lot more research data, and insights to measure and manage the “trampoline” effect that is the new reality of the labour market.
The original article was published in Daily Maverick, authored by Maryana Iskander, CEO Harambee Youth Employment Accelerator, and Neil Rankin, extraordinary associate professor at Stellenbosch University.