A model of government and business collaboration to create jobs

Erica Kempken, co-founder of Youth@worK, tells a great story illustrating how government and private sector can collaborate to create small businesses and jobs for unemployed youth – the ecosystem we have been talking about in this column.

Youth@worK is the largest implementation partner (IP) of the Youth Employment Service (YES), a collaboration between government, business and labour to give work experience to black youth between the ages of 18 and 35.

When Covid struck, YES chose Youth@worK to help communities produce masks. One dynamic young lady with a sewing machine was selected as a supplier. She set up a business making tailored school uniforms in rural Kwa-Zulu Natal, saving their parents the cost of traveling to the city to buy uniforms. Youth@worK placed another young person with this small business as it grew.

This second young lady in turn set up her own business sewing fashion apparel and wedding designs – and Youth@worK duly appointed a young person to assist her, and another to replace her in the original business.

“Youth@worK itself is an entrepreneurial business!” explains Kempken. “We started because of YES and are now creating jobs for youth and new businesses.” It is impressive that 17% of the young people that YES places go on to start their own businesses.

“YES demonstrates the collaboration we know is needed to address our employment challenge,” says Kempken. “The buzzword among all those engaged in YES is collaboration.”

I was intrigued by this, as my past experience has been that NGOs can become very competitive, even destructively so, in their pursuit of grants. So how did YES get this right?

YES illustrates that government should be an enabling rather than implementing partner. Government and business got together to work out appropriate and sustainable incentives for all parties. Government created legislation that supported the B-BBEE regulations to allow all companies to commit to BEE despite their ownership structure. Businesses committed to meet all the BEE requirements, to play open cards with their profit numbers, and ultimately create youth jobs. So far nearly 2000 firms have signed up to YES.

Government furthermore provides the Employer Tax Incentive to encourage businesses to create more youth jobs.

The next clever step was to put implementation into the hands of an independent non-profit organisation – the Youth Employment Service. YES is driven and entirely funded by the private sector. It has the clear and specific mission to connect with companies to create work opportunities for black South African youth at scale, and to achieve this by leveraging B-BBEE policy for better and more meaningful company impact and performance.

YES gives each young participant a mobile phone loaded with a digital learning app that teaches them about work and essential skills such as digital literacy and budgeting. IPs have to ensure that 95% of participants complete the full 12 month programme and complete all modules. Kempken points out this demonstrates that young people are not lazily sitting waiting for others to do things for them.

Why has YES succeeded? One factor is leadership. The founding CEO, Tashmia Ismael-Saville, vigorously canvassed and brought on board CEOs of leading corporates and the legislation was easily understood and adopted by the B-BBEE ecosystem.

Another factor is the appropriate allocation of roles. Government both led and listened to the interests of all stakeholders, and created facilitative conditions through regulation and tax incentives. Business co-operated and committed sincerely to the principles. And implementation was left in the hands of nimble independent agencies.

So far 72 712 young people have been placed in one-year real jobs that teach them how to work and triple their chances of a permanent job at the end. New businesses have been created. A model has emerged that is sustainable and can scale. It’s a success story.

Jonathan Cook chairs the African Management Institute.