Africa’s Companies Need to Become More Like Training Schools.

 

Youth unemployment is an issue that keeps many African politicians awake. Though data unavailability and informal economic activity make estimates difficult, youth unemployment rates in sub-Saharan Africa are believed to hover around 30-50% (and even higher in parts of North Africa).

The World Bank puts the figure at 38% in Nigeria, while the Economist projects 55% for young black South Africans. This is set against the backdrop of a fast-growing youth population, expected to double from a base of 200 million by 2045. Africa’s youth are at a crossroads, and today’s decisions will determine whether they become a demographic dividend or a ticking time bomb.

Companies and entrepreneurs can bring a sustainable solution, while unlocking massive economic opportunity, but a change is required from today’s status quo.

In June 2013, some Harvard Business School classmates and I launched a social enterprise (WAVE: West Africa Vocational Education) targeted at the youth unemployment issue. We identified two sides to the problem: the jobs gap and the skills gap. On the one hand, decades of policy failures and stunted private sector growth have led to a shortage of formal jobs; on the other, many youths leave schools and universities wholly unprepared for employment. Our organization focuses mainly on plugging the ‘skills gap’: we identify, train, and place underprivileged youths in emerging industries like the hospitality sector. However, our experiences so far have highlighted opportunities for even broader impact through a different approach to in-house training at African companies.

A ‘Training-Heavy’ Strategy

Today many African companies employ a ‘Training-Light’ approach. In the hospitality sector, for example, they invest upfront into luxury real estate and equipment, but rarely into training programs. Some may have short onboarding programs for new employees; at best some multinational companies will budget similar training budgets as in their developed market businesses. But there is a marked lack of a holistic training strategy that over-invests in response to the challenging African environment, and prioritizes continuous learning and customer feedback.

Instead African companies need to adopt a ‘Training-Heavy’ strategy, which positions enterprises as remedial schools and emphasizes continuous, metric-based learning. There are many reasons for African companies to step back in 2014 and rethink their training approach:

• The current system is broken. Many schools and universities pump out students who cannot string together coherent sentences. Companies that fail to take training seriously will face personnel issues sooner or later
• A good training strategy is directly linked to reducing the unemployment problem. Companies who take the lead will find themselves on the right side of public policy momentum as government concern about the youth unemployment issue deepens
• A good training strategy is a competitive advantage. In his work on interdependence vs. modularity (pdf, page 13), Harvard Professor Clay Christensen predicts that firms with integrated architectures perform very well in under-served markets with ‘not-good-enough’ products. Many emerging markets in Africa fall into this ‘not-good-enough’ category. In such an environment, companies should see training as an R&D investment – part of their secret sauce – rather than a distracting expense.

There are four essential elements of a ‘Training-Heavy’ strategy:

1. Train early and often. The inferior quality of many schools necessitates early access to youths through internships, short-term placements and even school-based training programs. By finding high potential candidates early, companies can develop them for many years before bringing them onboard. As soon as the new hire is made, companies should emphasize the employee’s position as an apprentice and present each day as a learning opportunity. Regular job functions should be topped up with frequent top-up training sessions, and continuous access to e-learning.
2. Use mentors and feedback. Mentorship is well-established within many African cultural norms, and exists in some form in many companies. However, companies should be careful to promote mentor-mentee relationships that are based on competence and company experience rather than external factors like age. Many companies also need to work hard to lower the cultural barriers towards giving and receiving feedback. Company executives can set a good example by being transparent in receiving feedback from subordinates.
3. Metrics are your best friend. Companies need to identify objective metrics to assess the progress of employees – without metrics any training strategy will be haphazard and unsuccessful. These metrics should be linked to value drivers for the company’s business: for example in the hospitality industry, companies need better metrics on customer satisfaction and how individual employees may have contributed or detracted from it. Today, many hotels and restaurants even lack simple feedback forms, and have absolutely no idea how their customers feel.
4. Align Culture and Incentives. Ultimately, most transformational initiatives will fail if the company’s culture is not aligned. Company leadership should frequently communicate training and development as priorities and promote objective measurements of employee progress. Compensation, promotions and other rewards should be tied to employees’ performance on the identified metrics.

Africa’s companies and entrepreneurs hold the key to making a real dent on the youth unemployment problem. But first, more companies must take training seriously and embrace a ‘Training-Heavy’ strategy. In my next post, I will address the status quo changes required for entrepreneurs.

Source:  BRYAN MEZUE is a member of the Forum for Growth and Innovation, a Harvard Business School think tank developing and refining theory around disruptive innovation. Follow him on Twitter at @bcmezue.