Abstract:
In the fourth quarter of 2021, South Africa's unemployment rate rose to 35%, the highest since 2008. Though some of the job losses could be attributed to the Covid-19 pandemic, the country had already been experiencing high unemployment due to a slow growing economy. The news was worse for the country’s youth. Of the 20.6 million people aged 15 to 34 years, 44.7% were neither employed nor in an education or a training program. South Africa’s 2030 National Development Plan called for the creation of 11 million jobs between 2010 and 2030. This meant adding 600,000 jobs per year, but the country’s economy had only produced 250,000 jobs per year, on average, between 2010 and 2020.
In South Africa, young, first-time, job seekers faced multiple hurdles to finding employment. Youth often lacked job-readiness skills—the behavioral and personal readiness to find and keep a job—and had low formal educational attainment, causing employers to be wary of hiring. In addition, the country’s minimum wage was a high proportion of average occupational salaries, providing further disincentives for employers to hire inexperienced workers. Also, workers in South Africa enjoyed significant legal protections to prevent unfair terminations, so employers risked incurring high costs associated with retaining workers later found to be unsuitable. Employers often tried to lower their risk by recruiting over-qualified or over-educated workers, which entrenched exclusion.
During its first ten years, Harambee worked to match youth to jobs. The organization analyzed a job to define the specific competencies required, recruited excluded young people and tested them to determine if they possessed those competencies and if so, effected a match. If they did not have the competencies, defined the gap and determined the fastest, most efficient way to train them and move them into the job. This approach led to the organization’s initial success but by 2016, its leaders recognized that it was imperative to move beyond matching to job creation, from one (successful) program to system change, and to engage with informal work. This case describes Harambee’s innovation pathway, its successes in bringing unemployed youth to jobs, and its engagement with the larger challenge of scaling.
This case is accompanied by three videos featuring interviews with two young job seekers and Harambee’s CEO that complement the written case: “The Struggle to Find a Job” (6:48 minutes); “Getting Help from Harambee” (8 minutes); and “Interview with Kasthuri Soni” (9:20 minutes).
Learning Objectives:
This case and class discussion seeks to explore and help students understand:
• The causes and analytics of youth unemployment in the case of South Africa
• A specific set of interventions to improve labor market functioning, and how these relate to analytics
• The trajectory from innovation to scaling within a complex system; exploring outstanding challenges
