1.4.1 Key Challenges

  • Getting to System-Wide Reform and Upgrading to Address Continued Failure of Public Systems

The slow or non-existent reform of public sector workforce development—as evidenced by continued acute skills deficiencies among university and TVET graduates—presents some difficult choices for donors and NGOs. There is little evidence of resources, capacity, or political will to drastically reform even the worst public systems, and few believe that public sector budgets can possibly expand fast enough to meet the needs of this youth population growth. Yet, scaling of experiments outside of public systems has not really been demonstrated.

As a result, it is not always clear whether it is best to work to reform existing workforce development systems or institutions (with the risk of throwing good money after bad); to implant “add-ons” such as soft skills training or career centers in existing public systems; or to establish new, free-standing/independent centers or programs that can be more flexible. None of these options has, to date, delivered much in the way of scale. Most program examples from the 2011 GYEOC serve hundreds or thousands of youth. With technology, some programs may scale to serve tens of thousands. Yet, youth unemployment is measured in millions, and there are serious doubts about public or NGO interventions to scale up to this extent. IFC and IsDB encourage for-profit providers to rise to these challenges, but the private sector is also untested at this scale.

The time is certainly ripe for experimentation with new approaches to reach scale, and these will almost certainly require a combination of reformed public workforce development systems inhabiting more flexible enabling environments, reliance on multi-stakeholder partnerships, and financial participation of the private sector, which can mobilize capital at scale in for-profit ventures.

  • Addressing the Enabling Environment

Addressing the enabling environment for workforce development at both the macro- and micro-levels remains challenging. At the macro level, to facilitate system-wide change and reform, better tools are needed to facilitate systematic and consistent mapping and analysis of workforce development ecosystems, with attention to understanding the enabling environments, financing structures, and training delivery environments. Issues remain including the new roles of private E&T providers, accreditation systems, and responsiveness to standards, both local and international, and these challenges need to be addressed at the policy-level.

At the micro level, the legal and regulatory environment may present specific challenges to implementation of good practice programs related to school-to-work transition. For example, legal prohibitions of unpaid work in many countries can make the development of internship opportunities very difficult. These regulations may also have strong support from labor unions, educators, and other workforce development allies. Access to the global network of workforce development practitioners can facilitate information exchange to support for timely reform or relaxation of these regulations.

  • Monitoring Progress and Measuring Impact, and Demonstrating Value for Money

Directly related to the task of reaching scale is the need for new systems and projects to demonstrate impact. The 2010 State of the Field publication called for better monitoring and tracking of youth employment and income outcomes, and of the contribution of workforce development to industry productivity and competitiveness.

Participants in the 2011 GYEOC highlighted the need for more standardization in measurement of youthfocused programs, but acknowledged several challenges. Outcomes remain difficult to accurately measure because they often do not manifest immediately, making it difficult to use data to modify interventions. Youth are also often difficult to track, and there is a need for developing and sharing practices for a variety of measurement instruments including, for example, tracer studies and impact assessments using randomized control groups (RCGs). Good practice development should also focus on incorporating results measurement more explicitly into project and program management structures to ensure that information is used to continuously improve program development and management.

Youth focused workforce development interventions, because they need to be delivered at scale, will also be called upon to demonstrate their efficiency and value for money. Scalability, in this context, will often be viewed by funders as declining cost per participant as a program expands the number of beneficiaries. As such, these costs should be well understood, with special attention to leverage gained from private sector involvement. Yet the total value to all clients of these interventions—youth and employers, for example—is very difficult to estimate. Practitioners and policymakers will need to work to develop (and justify) new, more expansive/global ways of measuring the value that their programs generate.

GIZ (German Technical Cooperation, formerly known as GTZ) has shared its own progress in this direction, publishing in early 2012 a new guide to results measurement.1 The GIZ guide to performance measurement in workforce development is based on and compliant with the DCED Standard for Measuring Results in Private Sector Development—a good-practice standard for results measurement, attribution, and reporting. The guide outlines how to apply a seven-step process—the core of GIZ’s own results-based monitoring framework— specifically in the context of training-focused interventions. While the examples used throughout the guide deal with measuring impacts of capacity building for demand-driven curriculum development, the process is designed to be applicable to a wide variety of workforce development interventions. As the first published rigorous framework of its kind, it can serve as a baseline methodology and as a platform for further innovation among donors.

  • Integrating Knowledge and Building Shared Resources and Tools

More work remains to be done in consolidating and sharing the tools and approaches for analysis and implementation. To support program development and targeting, this includes consolidating and standardizing practical tools and methodologies (interview guides, checklists, and scoring systems) for assessment of current and future labor market opportunities. With respect to present workforce demand, rapid assessments that build dialog with employers while identifying critical skills needs should take precedence. There is also a need to build a broader knowledge base on how employment evolves in specific value chains, and to develop protocols for correctly identifying where local industries stand, where and how quickly they are upgrading. This should entail building the capacity of local actors for understanding these analyses and using them as a base for shared learning with private sector (employer) partners.

A new area of discussion identified the need for tools to reduce the cost and improve efficiency of active labor market interventions, especially internships, apprenticeships, other practical training, career counseling, and soft skills assessment and development. This includes standardizing and disseminating tools for facilitating job seekers’ self-assessments, building related systems for skill matching and placement of interns such as “weighted suitability indicators,” and toolkits to assist employers in structuring practical internships and work with universities. More systematic methods of screening youth workforce development clients could also better target opportunities and improve success rates. Finally, it may be worth expanding these tools to encompass practical training pathways in civil society organizations and governments.

  • Rising Expectations, Uncertain Resources

Workforce development issues have risen on the world agenda as a function of the youth employment crisis and the Arab Spring as the financial resources need to address them are becoming scarcer. As the world economy enters its fifth year of sluggish economic growth, many developing country governments’ fiscal conditions do not permit massive new investments in skill development. Transitioning states including Egypt and Tunisia have the greatest need for workforce development, but also face the most severe fiscal crises.

In parallel, high levels of unemployment—especially among youth—and fiscal austerity in developed countries may undermine public support for bilateral aid to workforce development initiatives. Some European donors in particular report that they are encountering resistance among home country constituents to investments in skill development abroad, and, in the U.S., there is increasing political pressure to ensure that development aid is not used to support activities that could cost the U.S. jobs.

At the same time, workforce development initiatives programs are likely to be under increasing pressure to deliver large-scale employment very quickly to contribute to social and political stability, a goal in which donors and host countries alike are very interested. In the coming years, it will be important for practitioners to walk a fine line—continuously and forcefully articulate the necessity and benefits of workforce development initiatives investments to donors and developing country governments while managing expectations of rapid employment creation that depend on many factors outside of the labor market, and work harder to maximize their programs’ impact and cost-effectiveness to make limited resources go further.