By Abigail Carlton, Willa Seldon, and Vikki Tam
Since the rise of computing, mobile communications, and the Internet, youth, defined as 16-to-24 year olds, have become increasingly central to business and U.S. competitiveness. Said Scott Smith, Senior Vice President, HR Operations at AT&T, "Youth are comfortable with technology and anxious to have more digital experiences, and that's the technology direction our business is going."
The results of a Rockefeller Foundation survey of 350 CEOs, HR and line executives from large U.S. employers recently conducted by Penn Schoen Berland, found strong support for hiring youth, but also real challenges to hiring and retaining young workers. More than 80 interviews of corporate leaders and workforce practitioners and experts by Bain & Company and The Bridgespan Group surfaced why it's so hard, and two ways that smart organizations are overcoming barriers.
The Demand for Youth
Among the companies surveyed, entry-level jobs made up 38 percent of their workforce. And over 80 percent of the executives favorable to hiring youth, even without a college degree. C-Suite executives were the biggest supporters. Among the reasons executives cited: filling a large number of lower-skilled entry level positions; supporting a shift to a tech-intensive strategy; and strengthening their customer base by engaging younger customers.
The demand for entry-level workers will only grow. Over the decade between 2012 and 2022, according to Bureau of Labor Statistics data, more than 5.6 million low-skilled entry-level jobs will be created. At the same time 14 million youth -- more than one-third of all 16-to-24 year olds in the United States -- face employment challenges. About 40 percent are neither in school nor working, coming mainly from families living below the poverty line and disproportionately Black and Hispanic.
The business leaders we surveyed and interviewed cited challenges in harnessing the supply of youth to their needs due to difficulty matching individuals to positions, weak soft skills and professional behavior (showing up on time, knowing how to work as part of a team, and interacting in a professional manner with customers), and lack of job-specific skills and persistence. But several companies were pursuing fruitful approaches to helping the supply of talent meet demand.
Two Ways to Help Supply Meet Demand
The first approach embeds solutions in the core business operations, rather than developing another program: The business leaders we surveyed highlighted gaps in their own companies' entry-level hiring practices around training and mentoring new hires on both technical and "soft" skills. Youth may be unnecessarily screened out of the hiring pool by interview and other processes, and company culture may be making it hard for youth to fit into the workforce. Consider how CVS Health, the country's largest pharmacy services provider, is addressing the challenge. It hires an average of 20,000-25,000 young people per year across a wide spectrum of positions (including clerks, pharmacy technicians, and warehouse jobs). It develops youth employment models, then spreads best practices across business units using a broader adoption strategy, rather than just a single worthy program. Through the use of "tryout dollars," it encourages store managers to adopt successful youth hiring programs, centrally funding youth hiring payroll expenses for a trial period while local managers determine candidate fit.
A second approach looks for value chain opportunities: The scale of the youth employment challenge is big, and internal efforts alone may not be enough. Starbucks, for example, is engaging its suppliers in increasing youth hiring through LeadersUp, a workforce intermediary founded with support from Starbucks and some of its largest US suppliers. LeadersUp identifies barriers to youth employment across the supply chain; designs employer-led interventions (training, on the job mentoring, and organization redesign to create career pathways for disadvantaged youth); engages government workforce development resources; and measures the return on investment of youth hiring activities. In short, it's working to create a talent pipeline from warehouse to stores, understanding the mutual benefits of hiring skilled youth both for their companies and for the communities in which they operate.
In Ohio, Starbucks supplier SK Food Group is working with a coalition of workforce training partners to identify and train enough skilled youth to supply 10-15 percent of its local workforce by the end of 2015. So far, it's working. The LeadersUp partnership has improved SK Food Group's ability to identify talent, decreasing their interview to hire ratio from 18:1 to 2:1. The youth hired have proven more efficient, reaching on-the-job proficiency three times faster than those hired through traditional means. Jeffery Wallace, Executive Director of LeadersUp, explains: "All of this success is because the employer has signaled what training is necessary for the young people to be successful from the beginning. Repositioning the employer as the end customer of these efforts has really transformed the process."
For companies that are just getting started, working with nonprofits or educational institutions that deliver talent, training, tools and assistance may provide a critical leg up. LeadersUp is just one example; other nonprofits partnering with corporations to create youth employment initiatives include Genesys Works and Year Up.
As employers look to fill millions of jobs over the next few years, there are compelling business reasons for considering youth as a valuable source of talent. Companies that take the lead in developing scaled, thoughtful solutions that connect youth to business needs will boost their own competitiveness, and, in concert, the nation's.
Abigail Carlton is Associate Director, Secure Livelihoods, with The Rockefeller Foundation, Willa Seldon is a partner with The Bridgespan Group, and Vikki Tam is a partner with Bain & Company.