Hidden Talent: How Smart Companies Are Tapping Into Unemployed Youth

Finding entry-level talent is difficult for firms in a competitive, low-unemployment economy. Firms unable to fill the large number of entry-level jobs that have been and are expected to be created will face lower productivity and revenue. While there are large numbers of “opportunity youth” – those out of work and school — who could potentially fill these jobs, they typically lack the technical and “soft” skills to do so. This represents a challenge for non-profit and city workforce organizations to match people to jobs and develop their skills. The need is particularly pressing as research has shown that even one year without a job can negatively affect a young person’s long-term labour market prospects.

This important paper by Seldon, Milway, Morfit and Bills in the September, 2016 issue of the Stanford Social Innovation Review at the Stanford (University) Center on Philanthropy and Civil Society draws on recent youth employment research in the US to describe three successful approaches to hiring and developing opportunity youth, who are typically minority and low-income youth and/or those disengaged from the labour market. The research includes case studies, interviews and surveys.

Meeting the challenge of employing opportunity youth benefits not only the youth clients themselves but the companies seeking to fill their vacancies as well as society overall. Past research indicates that, in implementing the highlighted approaches, low-income, immigrant and other disadvantaged youth will receive training and social supports and gain entry to college and long-term jobs and careers. At the same time, participating companies will attract new hires that reflect the diversity of their customers and fill vacant jobs. Other benefits to the companies include increased retention, faster onboarding, stronger morale, a more robust talent pipeline, access to government incentives, and improved corporate image.

Successful Approaches to Employing Youth

The article identifies three successful approaches to hiring, preparing and retaining, citing examples of large companies working with employment/job brokering organizations.  These approaches comprise the following:

  • Hiring: screening in candidates for aptitudes rather than screening them out for lack of degrees and experience
  • Development: on-the-job mentoring versus formal training programs
  • Culture/retention: balancing empathy along with accountability as youth develop and advance within the organization

The first approach focuses on hiring youth based on their competencies rather than on their past education and employment experience. The authors cite recent research from New Mexico that shows that, whereas only 1% of unemployed young adults met criteria for jobs that required a college degree, 33% met the skills and aptitude criteria of the jobs being filled. Under this approach young candidates are screened into jobs for the skills and aptitudes they possess rather than screened out for the educational credentials and employment experience they have not acquired.

To demonstrate this approach, the authors give the example of CVS, a US-based pharmacy company. The company formed a workforce team that coaches store managers to determine whether or not candidates have the attributes to take care of customers and commit to advancing within the organization, instead of focusing on their limited prior experience. The company reports that the team has been screening in and hiring 1,000 entry-level workers per week. Furthermore, the it has enabled the company to “reach deep” into communities to find overlooked talent. For example, in Lowell, Massachusetts where 75% of students are classified as low-income, CVS has set up a “training store” at the local technical high school and provides part-time jobs at the local stores and full-time jobs upon graduation. CVS also works with organizations to supply the youth with such soft skills as professional dress, time management and conflict resolution.

The second approach entails development through on-the-job mentoring and training rather than formal learning. Research suggests that experiential learning is most memorable for trainees, leading to the recommendation that 70% of training be on the job rather than in the classroom. The authors use the example of SK Food Group to illustrate this approach. This company needed to hire a large number of people for a new factory in a tight labour market. Under the philosophy of screening in for competencies, 220 youth were hired and mentored.  In addition to reinforcing basic workplace skills, such as communication and punctuality, managers were asked to interact closely with the young hires and look for teachable moments as well as to accommodate unavoidable challenges, such as transportation or child-care difficulties.

The third effective approach to employing opportunity youth concentrates on providing them with a positive organizational culture by empathizing with their difficulties, while expecting accountability from them. It is well-documented that opportunity youth typically have high turnover, often attributed to personal challenges that disrupt their job attendance and performance. But the authors’ own research indicates that employers’ efforts to engage the youth and help them advance within the organization have resulted in higher retention rates by 20-200% compared to traditional hires.

In their example of this approach, the authors again cite the example of SK Food Group, this time working with the non-profit LeadersUp. The company grants employees time off to handle personal business like court dates and reassigns those with morning childcare difficulties to later shifts. It has also partnered with local organizations to provide better bus service for its new hires and to increase the availability of child care. At the same time, LeadersUp delivered to SK a group of new hires who worked and learned together on the job, resulting in positive peer pressure, something that would be much less likely in the traditional one-by-one hiring process. These actions have resulted in a retention rate that is 23% higher than other SK entry-level hires.

 Incorporating Approaches into Business Strategy

The article concludes by describing ways of “scaling up” initiatives to bring in and retain opportunity youth to make the initiatives a permanent aspect of business practices across a unit, site or even the organization, with a goal to matching youth hires with company goals and continuously improving onboarding, mentoring and development.

One way to scale up youth hiring efforts is to have champions both at the senior and frontline levels to identify roles providing tangible value to both the firm and the young people. The authors cite the example of American Express’s technology vice-president (VP) who sought to hire and train opportunity youth for the large number of vacant high-tech jobs. The VP engaged Year Up which screened candidates who were comfortable working with logic and numbers and trained them in a software engineering “boot camp” resulting in higher conversion to full-time jobs and longer tenure than traditional hires.

Other approaches to incorporating these approaches into the overall business strategy of the organization include using technology to identify youth with aptitude rather than just formal education and experience; having a strong culture of promoting from within; and identifying business units that have roles best suited to the skills and talents of potential recruits and where managers have strong commitments to mentoring.

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This article would of great use to both practitioners and employers seeking to support the hiring and retention of opportunity youth, particularly those from disadvantaged and minority backgrounds, in long-tenure jobs.