The proliferation of evidence of what works for youth employment and workforce development programs, has not been matched by an understanding of the cost-drivers and value for money of similar interventions.
Without clear financial models, it’s difficult to develop a business case for employers to absorb some of the associated training costs currently subsidized by donors; this makes creating pathways to scale a challenge. It discourages employers from paying for training, even when it increases productivity and retention and decreases recruitment costs for entry-level employees.
To help better understand the potential business case for demand-driven workforce training programs, we partnered with the Africa Management Initiative (AMI) to do three things:
AMI focused on customer-care agents and sales representatives in financial services and solar energy; two rapidly expanding sectors in Kenya. They trained a pilot cohort of 250 young people between 18 and 24. To maximize efficiency, AMI used a blended learning model – 70 percent of the training was conducted online, the remainder was face-to-face. Informed by employers, the content focused on attitudinal and soft-skills, which were combined with targeted industry and role specific ‘bolt-on’ courses (role specific content that could be added as required).
Eighty percent of the content was adaptable and could be used for any location, sector or role, while 20 percent was directly relevant to employer-identified needs, ensuring the content was highly responsive across multiple markets and job specifications. By the end of the training, 70 percent of the cohort had found employment, with more than half being young women.
To sustain 70 percent or more employment rate in future programming, AMI believes it could deliver the training for approximately $400 per person. This could be reduced further, to below $350, with strategic partnerships for job placements, and reduced further still with contributions from employers and participants.
While these costs would increase in fragmented labour markets with fewer wage jobs and with youth segments who are less skilled and require more substantive support, it is still markedly less expensive than other offerings.
Importantly, the findings from the pilot demonstrate the viability and scalability of the model and its transferability to other markets and sectors, particularly those which have high numbers of wage employment opportunities and emphasize soft-skills such as services, call-centres and tourism.
In the coming months, the AMI pilot, along with two additional case studies, will explore alternate pathways to scale through replication of their models through various channels, which the Foundation will be sharing and using to inform our own strategy development.