CIARAN RYAN: The Youth Employment Service, YES, is a South African not-for-profit [organisation]. It is a joint national initiative between business, government and labour that aims to address the youth unemployment crisis in South Africa by providing 12-month quality work experiences to unemployed black youth.
Since being founded just over three years ago, YES has worked with over 1 900 South African companies to create more than 72 000 work experiences, all with no state funding. The YES programme was designed to be a win-win for everyone involved, including the country and the participating company, as well as the youth. It breaks the experience trap that prevents young people from climbing up the ladder of opportunity. In return, business can receive up to two levels up on their BEE scorecard.
To discuss this we are joined by Ravi Naidoo, CEO of Yes4Youth. Ravi, thanks very much for joining us. For those who don’t know, explain how YES came about and how it benefits the country.
RAVI NAIDOO: Thanks very much, Ciaran. YES came about because there was a recognition that youth unemployment is a national crisis, and three out of four youth being unemployed is obviously something that has to change, because youth are the future leaders, the future customers for your business and the future entrepreneurs. So they have to get into to the world of work ASAP. The private-sector jobs are key because, once you get into a formal-sector job, the chances of you staying on in the formal sector is very high – as well as the fact that you now learn something about the world of work, and then you can start your own business. So from [the point of] keeping the economy pumping and bringing youth into society and just building the future of our democracy, clearly youth are the key.
That was the focus of it. And the idea was let’s have something that is private-sector based. So at YES we work with the private sector then to get youth into their first job. It’s an incentive scheme, so it’s a hundred percent funded by the private sector; there is no government money at all. So that was the idea of looking at youth and jobs, based through the private sector.
CIARAN RYAN: The stats that I mentioned in the intro are impressive – over 1 900 South African companies involved, and more than 72 000 work experiences created. So benefiting the country is one side of equation – what about the company? How does it benefit the company?
RAVI NAIDOO: Those numbers, bear in mind, are during a time of recession and the pandemic, when much of the economy has been losing jobs in net terms. So here you’ve got a programme that’s actually pulling in the other direction. It works as an incentive scheme with government. So effectively companies that join the programme and sponsor these youth jobs – and I can come to that later – get BEE scorecard benefits. About 600 companies went up in their BEE levels because of the extent to which they participated.
Companies benefit, [one], because their BEE level ups when they join and they sponsor youth; their BEE scores go up. Two, they also get a much better sort of ESG – you know, the environmental, social and governance scorecard. So for their asset managers and so on they can take this as a measurable ESG. Then three, [for] the companies that work with us, we certify that they are doing what they say they’re doing in terms of youth employment. So you can be assured that if a company is a YES partner, they generally are a good social-impact company. So they get all of that.
Of course, the youth work for the company, so they go back and they get experience in the company. But we also offer – for those companies that really can’t host the youth internally – we have a sort of a turnkey solution where we place the youth into other high-impact jobs as well. So there are actually quite a few benefits for the partner company.
CIARAN RYAN: I guess the third and most important side is the youth, who get employment opportunities. Now, of course, this is a big problem for anybody starting off in the job market. We’ve got a huge unemployment crisis among the youth, and one of the problems they have is that they don’t have the experience to qualify for a job. So explain how it works from their point of view.
RAVI NAIDOO: The problem a young person has in the country is that, if you’re going to be hired, the first thing they’re going to say is, ‘Do you have experience?’ Now, if you don’t get your first job, you obviously don’t have experience to get your first job. To break that cycle, this incentive programme kicks in; companies are incentivised to hire them.
So once the person comes to work in the company or in the programme sponsored by the company, they get 12 months’ quality work experience; it’s supported and mentored as well through the programme … at the end of which the person ends up with (a) the experience, (b) they can put it down on the CV, and (c) they get a reference letter which says, ‘I’ve done this’. So that makes them much, much more employable.
We found that when a person has a reference letter from a good programme, it makes them three times more employable than someone who doesn’t.
And of course they get paid, right?
In those stats you mentioned earlier about the thousands of people who have got jobs, that’s about R4 billion that’s gone to them as salaries, which they would spend to support their families and themselves, and so on.
The final point, of course, is what we’ve found is there’s a reasonably good absorption rate for that person after they finish that experience – much higher than otherwise would be the case. So when they leave the job, they’d probably get another job. We measure that and we look at how to support them as alumni as well.
CIARAN RYAN: You mentioned absorption rate. Are there instances where the youth who have been employed for the 12-month period actually get absorbed into the company where they’re doing this, call it, apprenticeship? Do they end up staying in the company?
RAVI NAIDOO: I think that’s a very important thing that we want to support in South Africa, because companies want to take a risk on a young person, but they don’t know whether the person has the right sort of attitude and behaviours and so on. The company needs a chance to get to know the person, so we encourage as much as possible the person being absorbed into the host company. We find that in many of the companies that is the most likely place where they’re going to be absorbed, because now they know the person and so they give them a full-time, permanent job going forward, or they go into another company with that CV.
We find about 40% or 42% absorption rates in the immediate aftermath of the 12-month period, which is higher than pretty much any other programme that we’ve come across. Then, obviously beyond that, because of … the skills and so on, there are more opportunities even after that. The final absorption is probably going to be north of 40%.
That’s something that is a focus for us and we are quite happy with what it is, and it’s something we are working [on] now with companies and stakeholders to see how we could make it even higher.
CIARAN RYAN: Just talk for a minute about how YES integrates with environment, social and governance standards, or ESG standards, as well as social-development goals. I’m sure there is a close integration?
RAVI NAIDOO: Yes, yes there is. In South African law, the YES programme is one of the things that gets you a score for your BEE certificate, and it’s literally on that certificate form: it says ‘YES jobs’. So that’s there. But remember that when you are looking at, as you say, sustainable development goals, which is what the UN has as one of its priorities for the world, one of those is getting youth into jobs.
We are definitely a measurable outcome towards your social or sustainable-development goal, so you would score points there. And in terms of ESG, environmental, social and governance scorecards … asset managers and investors want [this] more and more even if you didn’t have BEE as a focus. So let’s say you are mostly a foreign-focused company, you want ESG because your asset managers come and rate you against other potential investments, and if you have a good ESG score you become more palatable to them.
And youth employment is a very big part of the ‘S’ of that ‘social’. So again, we would be able to help with that. I’ll give you a practical example. Youth in our programme, some of them work in mining towns and they help a health organisation. In that health organisation, they work with clinics, and we can see with the youth helping with the filing in these clinics that people don’t miss their appointments. Previously 50% of the users of that clinic missed their appointments because no one was following up. Now 90% of them come to their appointment because there’s a follow up from the youth person. Also, people wait for hours to be seen because they’re looking for the files. Where the youth are helping with the filing, the time to be seen by the nurse comes down dramatically. These are measurables.
So we can measure not just that the youth has got a job in the health sector, but we can measure the outcome of that job in a social sense. So the company that then sponsors that programme can also claim, ‘Look, I helped with jobs, but I also helped with that health impact’. We can do the same thing with education and a whole range of things. All of those are measurables which add up in your ESG score, so a company just gets that as well when they are part of the programme.
I would say when you add up all of that, it’s probably the biggest social-impact programme – in the private sector anyway – in South Africa.
CIARAN RYAN: A final question, Ravi. We mentioned 1 900 companies – or north of that actually – getting involved in this programme. What is the target for the end of the year? How many jobs do you hope to create by the end of 2022, and how can business get involved?
RAVI NAIDOO: As of yesterday, it’s 1 923 companies, including a lot of the biggest, the best companies.
It’s a government incentive programme and it’s really made to be as attractive to the private sector as possible. If a company registers for its first YES programme before the end of its financial year, they will immediately receive the BEE benefit level ups that they are committing to. They commit to X number of jobs and immediately – let’s say they join tomorrow – during March they will be recognised for the BEE level-ups, which makes this one of the best DTIC [Department of Trade, Industry and Competition] or government incentive programmes.
So for a company to join, they would just have to come to our website and then register. It’s all pretty self-explanatory on our website, which is Yes4Youth.co.za. It’s all there and then we will be able to take it up with them.
CIARAN RYAN: Ravi Naidoo, CEO of Yes4Youth, thanks very much for joining us.
Brought to you by Yes4Youth.
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