Nearshore Americas

The Human Capital Conundrum: How to Fix a Massive Youth Unemployment Gap?

There are 148 million youth in Latin America and the Caribbean between the ages of 15-29; 32 million of that population is not working and not in school.  Youth unemployment is three times higher than adult unemployment, the youth population lacks jobs skills, and an estimated two percentage points of annual economic growth are lost region-wide due to the behavior of at risk youth according to joint research by the IDB’s Multilateral Investment Fund and the International Youth Foundation.

A 2011 Manpower survey of 40,000 private companies across Latin America and the Caribbean exposed that 50% of LAC companies struggle to find qualified employees.

The plan is to ask employers and private sector groups what they need, analyze youth needs, and create curriculum that satisfies both

According to the Cisco Networking Skills Gap study demand for Latam professionals with Internetworking skills was set to outstrip supply by 27% in 2010 and the demand-supply gap for IP telephony, network security, wireless solutions, and network administration professionals was estimated to be 35%.

Bottom line: Latin American and Caribbean youth should be driving regional growth, but education systems and youth training and placement initiatives are not able to combat the massive youth unemployment problem facing the region.

New Employment Opportunities (NEO) is a bold undertaking to train one million disadvantaged youth in Latin America and the Caribbean and achieve job placement for 50% of those trained.

As of its April 2012 launch, NEO has raised 37 million in cash and in-kind resources.  Its founding members are IDB’s Multilateral Investment Fund (MIF) and Social Services Department, the International Youth Foundation (IYF), Walmart, CEMEX, Microsoft, Caterpillar, and Arcos Dorados.

MIF, IDB, and IYF will jointly lead design and implementation of the program which also aims to involve 1,000 companies offering internships and employment opportunities, 200 job training providers, hundreds of NGOs, civil society organizations, and governments.

The Strategy

The plan is to ask employers and private sector groups what they need, analyze youth needs, and create curriculum that satisfies both.  The hundreds of boots on the ground partnering organizations will implement the curriculum including technical training, life skills, business planning, ICT literacy, and math/reading while at the same time providing job placement and career coaching.  It will be up to MIF and IYF to evaluate the results and guide the evolution of the 10 year initiative.  The universal aspiration of NEO is “…to leave in place a strengthened national employment service and job training institutions with greater capacity to respond to the growing demands of both companies and disadvantaged youth,” as stated by the IDB.

Should Your Company Join NEO?

NEO promises companies that join will benefit from leveraged workforce training programs relevant to company needs, influence in public policy to ultimately help governments direct youth employment expenditures more effectively, and public image goodwill and visibility.

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The founding member companies are large employers in multiple markets across the region that have a large stake in the regions success as a whole as well as the stability that comes with lower youth unemployment.

The some 1000 additional participating companies in the region will contribute by providing internships, mentorships, entry-level jobs to NEO training program graduates, other resources, and will act as program ambassadors to get other companies involved.

To get involved contact the IDB’s Office of Outreach and (English) or (Spanish).

Jon Tonti

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