A Scalable Model for Youth Training

The Mastercard Foundation and African Management Initiative’s Youth Employment Accelerator

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:

• Identify a high-potential sector for low-skilled, entry-level wage employment;
• Work with employers to develop demand-driven content and utilize technology to adopt a blended learning model, matched with employment and placement opportunities; and
• Analyze and understand cost drivers for the model, and develop a viable business case for employers to pay for parts of the training and reduce the subsidy from donors.

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.

The Mastercard Foundation and African Management Initiative’s Youth Employment Accelerator report results were impressive and generated four key lessons:

• Managers need training too. AMI trained managers who were responsible for entry-level staff to ensure a quality on-boarding process and offered post-placement support for new employees. New recruits were supported post-placement with additional ‘on-the-job’ courses, as well as a final learning lab to allow discussion and feedback on key challenges, to ensure retention.

• HR departments don’t always have a clear understanding of their own costs. As a result, it’s difficult to benchmark costs or present a comprehensive cost recovery model with real evidence of return on investment for companies. More incentives are required for companies to identify and share these costs to help benchmark training programs and identify appropriate subsidies. This is also beneficial to companies to better understand their own costs related to recruitment, training and retention.

• Placements are costly and demand a unique and dedicated skill-set. Although placement rates were strong, AMI identified additional needs to better connect recruits with employers. For example, dedicated staff are required to better understand the needs of companies upfront, and better navigate the complexities of hiring. This is a unique skill set and job profile that non-profits often lack.

• Starting with cost-recovery changes program design. As workforce development programs layer-in additional content, support and accompaniment, the models become expensive, difficult to replicate and identify the most impactful components. Starting with the premise that employers and participants will cover training costs and donors may also contribute, changes how employers are engaged, content is prioritized, technology is utilized and costs are tracked.

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.

To learn more about AMI’s low-cost solution for equipping young people with the skills demanded by employers, read the case study A Scalable Model for Youth Employability Training.