Opinion: Why is Demand-Driven Training Like a Long-term Marriage?, Dec 2016

Fiona Macaulay, Devex

Answer: It requires continuous investment with your partner.

By demand-driven training, I mean those skills development initiatives that are customized to respond directly to specific requirements of a job role for an employer or a group of employers and place trainees into a job.

I have taken a deep dive over the past five years into understanding what’s different about “demand-driven training” for disadvantaged young adults compared to other workforce development initiatives. For the demand-driven training model to work, training providers must have corporate partners ready to invest time and effort to align their values and objectives, overcome differences, and find ways to work well together.

Recently, a friend of mine in the international development community commented, “you seem very bullish about this.” I am. And I think others working in the youth development industry should be bullish on these models too. Why? Because demand driven training models respond to local market needs and are sustainable when they deliver for all stakeholders.

Demand-driven training models that recruit economically excluded youth, directly addresses Sustainable Development Goals 4, 8 and 10. They offer a pathway for high-potential, low-income youth into formal sector jobs that have the possibility of career advancement — the kinds of life-changing jobs someone from a low-income community is very unlikely to get without specialized training, placement and post-placement support.

Imagine, you’re a 20-year-old and don’t know anyone in your community who has a formal sector job, who wakes up at the same time every day five days a week to go to a job that offers benefits and a steady income. What does it take to prepare for, place in and set that young person up to succeed in that world of work and have access to lifelong learning opportunities?

Youth and demand

Why demand-driven training matters and why is our understanding of the characteristics of these local and sustainable partnerships so critical?

First, consider the statistics. Globally, the number of unemployed people between the ages of 15 and 25 is estimated to be 73 million. If you add the underemployed, it grows to 400 million. If you include the inactive youth, people who aren’t even looking for a job, the number blows up even larger.

Secondly, consider the implications of this volume of wasted talent and aspiration, huge pockets of unemployed and underemployed youth become breeding grounds of hopelessness, possibly crime.

Thirdly, consider the resources going to youth development and workforce development and entrepreneurship programs that don’t lead to placement and retention in a formal sector job with the prospect of career advancement or a stable and growing business.

Traditionally, youth development and workforce programs might raise awareness about local job openings, increase understanding of the skills employers are looking for and strive to build those skills. But so often, there aren’t jobs for students and trainees, or a reasonable expectation of one. That final and critical step of placement in a job or learnership doesn’t take place. Why? Relationships with employers haven’t been established to understand exactly what they are looking for. Confidence hasn’t been built to mitigate employers’ concerns about hiring a young person who hasn’t previously held a similar position.

The employer lacks experience managing a more diverse workforce. Without all these givens, young job seekers are often not further ahead than where they started before participating in a workforce development program. In these scenarios, we in the development community are failing.

Businesses are motivated by a variety of factors that include access to a new pool of talent, improved performance, higher retention rates and lower HR costs and a diverse workforce that reflects an increasingly diverse client base. And a critical consideration for employers is the degree to which their training partner can deliver work readiness programs that directly address the risks identified by employers taking on first-time workers.

Peter Glick, senior economist at the Rand Corporation, recently led a team that conducted a study on the private sector and youth skills and employment programs. He explains that “research shows that training programs that work closely with employers are the most successful at integrating young people into the economy.”

For those of us in the “global north,” we need look no further than our own backyards to see how attractive demand-driven training programs are to employers and young people (and often their families). In the fast-growing tech sector, we see the rapid proliferation of for-profit training companies, such as General Assembly, App Academy, and The Recurse Center, which operate outside of traditional academia, offering coding “boot camps” to turbocharge their students into tech jobs. Sometimes the students pay the whole freight, sometimes the tech companies that hire the graduates defray part or all of the training expense.

Training to underprivileged youth in South Africa

Nowhere is the market failure to match up employers with highly motivated but poorly educated youth more grievous than in the developing world. Nonprofits, whose founders often have their roots in the private sector, have sprung up to offer a similarly targeted training to underprivileged youth, steering them to and training them for jobs that exist and placing them. For example, Harambee Youth Employment Accelerator is a South African demand-driven training provider that connects employers looking for entry-level talent to young, high-potential work-seekers who are currently locked out of the formal economy.

Working with over 300 employers, their partnerships seek to understand the competencies required (often challenging existing requirements that may be exclusionary), then recruit candidates where existing corporate recruitment networks do not reach, assess their competencies and match them to jobs where they are most likely to succeed. Jointly with employers, they develop custom solutions in the retail, hospitality, financial services, business process outsourcing, and technical sectors.

“We have discovered that working with strong brands as early adopters can change employer practices across entire sectors, leading to even more businesses willing to try something new,” said Harambee’s CEO Maryana Iskander.

Harambee has learned that its employer partnerships extend to advising on retention techniques, such as paying a month’s wages up front so the young person has money to pay for transportation and not end up indebted to money lenders or end up in other risky situations simply to be able to afford the transport to get to their job.

Demand-driven training in developed economies

But just as in sub-Saharan Africa, there is a need for demand-driven training in developed economies. U.S. demand-driven training NGO Year Up is a pace-setter in the US and offers a model that demand-driven training initiatives in developing countries model aspects of their programs on. They offer us a vision of what long-term marriage with a private sector partner looks like: For more than a decade Year Up has been working with Boston’s State Street Corp. To date training 700 young people from economically disadvantaged backgrounds, the vast majority of whom as fund accounting interns and all but 100 of them becoming full-time hires who, on average, stay with the company three to four times longer than the local college graduates who had previously held down those jobs.

What did it take to achieve this? Joint design. Year Up’s sales and program teams worked with State Street's talent acquisition team to identify the competencies needed for these entry-level positions, and then designed a curriculum that would develop those competencies ensure that the young adults get the relevant training to earn an entry-level job, and also get the support needed to combine work and postsecondary education both during training and, if they are hired, as an employee.

“We’re an integral part of our corporate partners' talent supply chain and they invest in us because it’s good for their business,” said Gerald Chertavian, founder and CEO of Year Up. The partnership between employer and demand driven skills training organization doesn’t end with the placement. Supervisors of Year Up interns receive a three-day training for effective practices for managing these employees coming from diverse backgrounds.

It’s not easy to find corporate partners ready to offer this level of commitment. “You have to kiss a lot of frogs to find a prince,” said Branka Minic, founder of Future Work Consulting. When it comes to investing in partnerships for demand-driven training, we can’t afford not to. A South African study shows that a young person who can keep their first job for 12 months has a greater chance of staying employed for a lifetime. According to recent estimates, in the U.S each young adult who is out of work and out of school represents a cost to taxpayers of approximately $14,000 per year — and up to $34,000 per year of total social costs.

What’s the sustainability outlook for demand-drive training? Employers will stay engaged if they are provided with qualified job candidates on a sustainable basis and cost per hire is lower than they what are paying without these partnerships; if the training and educational institutions can have success in job placements they will continue to be attractive to young people and their families; and if governments can see youth unemployment numbers go down and productivity of the economy go up they have incentives to continue to invest in these programs.

Government, with urging from other stakeholders and in close partnership with employers, may also be stimulated to pivot some of their educational resources toward models that lead to career pathways for their youth populations. A crux question is, can government maintain a long-term marriage with employers? There’s a compelling case for them to pursue these relationships in pursuit of the Sustainable Development Goals.

Originally published by: Devex