Scaling Up Business Solutions to Meet the Skills Gap
How can companies increase employment and entrepreneurship throughout the value chain, build skills, and engage youth?
A new collection of case studies provides some insights into solutions put in place by ITC, SABMiller, and Vale, three member companies of the World Business Council for Sustainable Development (WBCSD) with a significant presence in emerging markets. They have taken proactive steps and initiated training programs that empower not only their workforce, but also their suppliers, retailers, and the surrounding communities.
The case studies, compiled in a booklet produced in collaboration with the Let’s Work Global Partnership, demonstrate that companies, in collaboration with the public sector and educational institutions, can play a significant role toward successfully increasing the skills and employability of thousands of people. Driven by a desire of scalability, the case studies reveal practical experiences and perspectives, and showcase the positive impact of the training programs on the company, local society and economy at large.
The companies’ initiatives are categorized into three areas:
What this initial set of case studies also makes clear is that greater effort is needed to collect and analyze data focused on the actual impact of investing in education, training, and skills development programs. Further evidence is required to fully understand and articulate the positive impact of training and skills programs on job creation, and it takes time for the employment benefits to materialize in terms of sustainable socio-economic development. In order to quantify the value creation of these programs, and to ultimately strengthen the business case for addressing the skills gap, in a second phase of their collaboration the WBCSD and Let’s Work will aim to gather information related to the costs, benefits, and overall value created through individual company initiatives.
Skills mismatches: One of the major constraints for the private sector to create more and better jobs
With over 45 million job seekers entering the labor force every year, their chances of finding a job will depend on acquiring the right skills. By 2020, it is estimated that there will be a global surplus of 90 to 95 million low-skilled workers and a global shortage of 83 to 85 million high and mid-skilled workers.
This situation is particularly delicate in emerging markets, where private sector companies – which provide 9 out of 10 jobs – are faced with a triple challenge in the context of fast growing economies: to rapidly find a large number of employees with the right set of skills, coupled with insufficient quality and quantity of goods and services provided by their suppliers, and very often high rates of unemployment and informal jobs in the surrounding communities, particularly among youth.
There is a strong business case for companies to enhance their efforts in tackling skills and employment issues. High levels of unemployment and vulnerable employment drive social exclusion and inequity, preventing potential workers from productively engaging in the economy, depressing consumption, generating social tensions (and often anti-business sentiment), and ultimately creating additional drain on national economies with consequences for government policy, social welfare provision costs, taxation etc. Furthermore, shortages of appropriately skilled people reduce the employability of the unemployed, create problems in terms of cost, quality and delays for companies, and ultimately slow business growth and innovation with far-reaching impacts for the economy as a whole.
We hope the experiences and insights of the companies featured here can provide inspiration and practical starting points for others to follow suit in tackling these increasingly urgent challenges.