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The risks of youth unemployment and substandard education

14 June 2019 The Institute of Risk Management South Africa

In celebrating Youth Day, we are reminded that the uprising that began in Soweto more than 40 years ago was all about education, and how it profoundly changed the socio-political landscape of the country.

Today structurally high unemployment, growing income disparity and inequality as well as inadequate or substandard education and skills development count under the top five risks facing our country, says Christopher Palm, Chief Risk Advisor of the Institute for Risk Management South Africa (IRMSA).

According to the 2019 IRMSA Risk Report industry sees inadequate and substandard education and skills as the second biggest risk for companies.

The latest statistics on unemployment shows that the biggest burden of unemployment falls on people aged between 15 and 34 years.

According to Stats SA they accounted for 63,4% of the total number of unemployed persons during the first quarter of this year. The youth aged 15–24 years are the most vulnerable in the South African labour market as the unemployment rate among this age group was 55,2% in the reported period.

The danger of a disillusioned youth
How we respond to these risks are critical, says Palm. In the IRMSA report the growing disillusionment among the youth of South Africa is highlighted.

The report warns that it could lead to a youth-driven protest movement, on a much larger scale than the student protest movement.

“Such a movement, if led and supported by other population groups in the country, would hold a particular challenge for the general political and social stability of the country...”

Palm says this is a real consequence if we do not get unemployment and our education system in order.

Palm also suggests that identifying the most effective risk treatment options require both the public and private sectors as well as our career advisors and learning institutions to better understand the future skills requirements; this is best achieved by engaging the risks and opportunities presented to us by trends like the Fourth Industrial Revolution and future thought leadership insights provided by the Institute for Futures Research at Stellenbosch.

To identify and understand what future skills are needed and to align country and industry skills planning with the ability of the educational system to deliver is a critical success factor in addressing the risks highlighted above.

“The youth must know what the skills of tomorrow are going to be; it is said that the skills that will be needed 10 years from now haven’t even been given names yet.
We need to respond and get this right NOW; if we don’t, the system will not allow us to align quick enough to enable our labour market to produce these skills when it is needed.

We will end up with skills that are redundant by the time students start their careers and South Africa will not be able to exploit the global opportunities presented by the fourth industrial revolution.”

The folly of quick fixes
The report quotes American economist Joseph Stiglitz who wrote in his book Price of Inequality: “If a country doesn’t give a large proportion of the population the education that they need to earn a decent living, if employers don’t pay a decent wage, if society provides so little opportunity that many people become alienated and demotivated then that society and its economy won’t work well”.

It also does not help to “give” people an education for the sake of the numbers; they must be able to do the work and to realise the values of significance and self-reliance. The folly and ineffectiveness of “quick fixes” has to be emphasised.

For IRMSA it is a year of risk activism and the Institute wants to make a difference in not just highlighting country and industry risks but also capacitating leadership and the risk profession to make a difference.

The IRMSA report reiterates the importance of a “social pact” and the need to align socio-economic programs towards youth investment.

At IRMSA’s conference in October and their Awards Gala Dinner in November, they will focus on the youth and recognise and honour public and private companies that are addressing the risks relevant to the youth with innovative and supportive initiatives.

Several professional associations (such as the Actuarial Society of South Africa, Project Management SA and the Association of Chartered, Certified Accountants), represented by the South African Graduate Employers Association (Sagea) are already involved at school and university level to promote careers where there are skill shortages, or where there is insufficient information about career opportunities in specific professions.

In around 28% of the cases associations are involved in career promotion activities because they need to improve the “attractiveness” of their profession.

At school level the associations are involved in presentations to learners (17%), they are present at career expo’s (17%) or they are sponsoring related events (14%).

Around 7% of the associations who participated in a recent survey by Sagea provide bursaries and 3% offer job-shadowing opportunities.

At university level most offer presentations to students (21%) or they offer guest lectures (15%). Around 12% make use of university career fairs to promote their professions and 7% offer bursaries.

“We will honour those who, amongst many other innovative ways to treat the risks spoken about earlier, make schools safer, assist with skills development for educators, and who provides learnerships, apprenticeships and the like,” says Palm.

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