Three ways to get small businesses to employ youth
Changing the hiring process can change the future for young workers
Small business growth is the secret to solving youth unemployment in Africa. Small and growing businesses (SGBs) create around 80% of employment on the continent. If business owners can grow their companies they can hire more people, who in turn gain valuable experience they could use to start their own companies one day.
The most important tool for growth is a strong team. Over 90% of our employer partners at Wave Academies are micro, small and medium-sized enterprises (MSMEs) with fewer than 20 employees. In a relatively volatile economic environment, employers want to hire people who can work across a range of roles. By hiring for competencies, employers select for transferable skills such as communication, problem-solving and teamwork, instead of the less-relevant credentialed knowledge that a CV would advertise. Opportunity youth in sub-Saharan Africa acquire work-relevant competencies through the school of life; we just don’t know how to measure them. As a result, hiring funnels systematically exclude youth without post-secondary credentials.
Not all employers realize it’s beneficial to hire for competencies over credentials; among those who do, many don’t know how. This is bad for both parties. Without a foot in the door to their first job, youth don’t accumulate the work experience to earn a higher income (either at a second job, or because they now have the skills to start a successful business). Meanwhile, employers finds themselves paying more for skills they don’t need. Employers therefore miss out on star performers and businesses don’t grow.
Linking employers with opportunity youth involves communicating the why and how of competency-based hiring to employers.
Sure, it’s important to have the data when making a case to employers. It’s even more important to show employers concrete, relatable examples of how competency-based hiring can transform a business.
Only one in four entry-level employee terminations by our employer partners in 2017 was because the person lacked the technical competencies. Additionally, when online jobs site LinkedIn surveyed 2,000 business leaders, 57% identified soft skills as most important for them.
An example of a success story in this regard is Hans and Rene, a gelateria in Nigeria, which went from a home shop with a couple of employees to four stores with more than 60 employees. They publicly attribute their success to hiring for competencies and training for technical skills on the job. We have invited them to speak in radio video interviews and mentioned them in blog posts so other entrepreneurs can see and believe.
Once an employer knows that they want to hire for competencies, they have to get explicit about the competencies required for their particular vacancy and then find a way to measure them. This takes time, which is an extremely expensive resource when running a small business.
It is much cheaper to stick to the status quo: skimming through hundreds of CVs for the first two bullet points on whether someone went to university and their number of years of work experience. If by luck someone with no experience or higher education makes it to the interview process, they may be rejected because of their grammar or accent.
To link employers with opportunity youth, we have to come up with a simple, cheap way to hire for competencies. There are a few different tools to do this. Here are some of the more interesting ones we’ve been experimenting with:
- Co-designing the interview process with employers. If you want a housekeeper, why should you care how good the candidate’s grammar is? Instead of having a 10-minute conversation, ask them to clean a room.
- Substitute the CV with a recorded elevator pitch. Employers can then make decisions based on the unique story a candidate communicates, as opposed to more regulated formal sector experiences that one would find in a CV.
- Use micro-credentials to communicate relevant sub-skills such as problem-solving, digital literacy and communication. Link verified employer and teacher testimonials as validation of these skills – think LinkedIn for blue-collar jobs.
- Work with governments to add work-relevant skills into school credentials so that soft skills can eventually become bullet-points on a CV.
Referrals are everything in the recruiting business. It is much more powerful for a business owner to hear from a peer that a process works than to hear it from us. If we want inclusive hiring to be the norm, the competencies-over-credentials movement has to spread faster than any one non-profit can grow. Get employers on YouTube videos, in conferences and on the radio talking about their success stories. By giving our employers the platform to do so it becomes a double win because they also publicize the hiring practises we want to see disseminated.
In order to solve the messy problem of youth unemployment we need a solution that scales beyond any one organization. Success looks like empowering employers to screen and hire for what they really want regardless of whether an intermediary facilitates the process or not.
When visiting an employer partner recently a colleague noticed a new staff member we hadn’t placed there. She asked about him. ‘Oh yes, we hired him directly.’ said the partner. ‘He’s not from Wave but he has similar characteristics to our Wave staff and no degree. He’s doing really well.’ That’s the kind of success story we want to inspire.