A Closer Look

Youth Unemployment and the Skills Gap – Certainly it is a failure

Simon London: The sort of layperson’s view would be that this sounds like a sort of massive case of market failure. On the one hand, you’ve got a lot of idle resources—young people who want to work. And on the other hand, … you’ve got employers who are really struggling to attract and retain entry-level workers. Is market failure the right way to think about it?Skills Gap

Mona Mourshed: Certainly it is failure. I would describe it as an execution failure as much as market failure, and let me describe why. There are multiple parties that are required to make a solution happen for any particular young person. So you need, at the K–12 system, to have been able to achieve a certain level of literacy and numeracy, such that a young person, once they emerge from secondary school, actually does have the basics.

Second, at the level of employers, you have to have enough signals that are out there that say, “Here’s what I need in terms of someone who’s going to be successful in these particular roles.” You need postsecondary-education providers who are working closely with employers to be able to produce such people and to dynamically know [which skills employers are seeking] as things evolve, as industry needs evolve. And overall, there needs to be a funding system—be it public or private—that can enable all of these things to happen.

So it’s not a surprise, given the number of players in this space, that we do have the type of execution failure that we see. If I shift the question to, what do we see as being essential elements in order to make this complex environment work for more and more young people—let me just describe a bit what the elements are that we have put in place in Generation on the basis of having seen the failures in programs and systems across the world.

First of all, there has to be a focus on middle-skill jobs that are either high scarcity or high churn. Why? These are the ones that employers care about. If it’s something where someone can be trained over a number of hours, they’re not going to invest in that. They’re not going to build relationships with education institutions, because of that. They’re not going to put their own resources against that.

So it’s high-scarcity, high-churn roles where you can clearly make a link to business performance. Two, then, is an ability to understand not just what the skills are but also the activities that most get in the way of someone being a high performer or a low performer in this entry-level position.

And then on the basis of that, being able to create a program. And we would argue that boot camp–style programs that are anywhere from 5 to 12 weeks long and that enable repeat and intensive practice in precisely those breakdown moments that most get in the way of someone being successful on the job, are what is most needed. And that involves integrating technical skills, behavioral skills, and mind-set skills so that by the time someone comes out of that boot camp they are operating at peak productivity and quality for their tenure in that role.

In parallel to that, particularly for disconnected young people, there have to be social-support services—transportation allowance, stipend, access to child care. Because if they do not have that, then they are not able to participate in something that is full time and as intense as what a boot camp is.

And then finally, the ability to then work with employers to preconfirm vacancies so that it’s not just training push. It’s the very clear understanding that once you come out of that program, it’s because there’s a job on the other side. And then after that, to be able to measure the return on investment for both employers and young people. If these things are not true, we would argue that it is almost impossible to be able to arrive at a systemic solution that produces results.

Chosen excerpts by Job Market Monitor. Read the whole story at  A hands-on approach to youth unemployment | McKinsey & Company

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