The youth unemployment challenge
Unemployment rates among young people in the Western Balkans are among the highest in the world—a situation that has only worsened during the COVID-19 pandemic. High unemployment is also fueling a socio-economic crisis, with youth emigrating to the developed economies of Europe at unprecedented rates. Systemic changes are needed to help unemployed and underemployed youth attain skills that align with market needs and to make informed career choices while supporting businesses in creating decent jobs.
The convergence of both the rapidly changing economy and the pandemic has led to rapid shifts in the labor market. In view of the ongoing green transition, new professions have been emerging that are of high interest to young people. Many jobs have been disappearing in response to digitalization —and many new jobs are emerging, too. As the new technological revolution displaces labor in routine tasks, digital solutions have created new employment opportunities for young people with non-routine cognitive skills and social and emotional skills. To remain competitive, young jobseekers will need to continually acquire new skills, which requires flexibility, a positive attitude towards lifelong learning and curiosity, and the ability to access the right skills training. Irrespective of these fast-changing economic trends, the underlying challenge of aligning education and training with the employers’ demands persists and requires systemic changes in the Western Balkans.
How do we prepare youth to meet the demands of today’s rapidly transforming global economy, and what is the role of education and training providers, businesses, and governments to help young people gain more access to opportunities?
Proven solutions to address youth unemployment
The Swiss development organization Helvetas has been addressing these challenges in the Western Balkans since the early 1990s through projects, such as RisiAlbania and Education for Employment in North Macedonia (E4E@мк) of the Swiss Agency for Development and Cooperation (SDC); as well as RECONOMY, a regional inclusive and green economic development program of the Swedish International Development Cooperation Agency (Sida).
Helvetas employs numerous approaches to tackle youth unemployment, with some achieving sustainable and scalable results such as paying for performance, offering career guidance, and building inclusive systems.
Pay for performance improves the quality of training programs, including follow-up support, and the employment outcomes of graduates, and increases access to training programs and employment for vulnerable youth. Tools used include performance-based contracts and financial incentives.
Young people and their parents need easy access to labor market information. They want to know which skills and professions are in-demand, and how to identify realistic education and career choices. This need is best met by transforming the ecosystem of career guidance—with support accessible at the municipal and university levels, by developing career counselors, and by working with media to reframe the message of an inclusive, modern workforce.
Helvetas’ inclusive systems approach has been critical to the projects’ success, based on an understanding that outsiders do not want to displace existing actors or institutions and become permanent players in the system.
The Education for Employment in North Macedonia project piloted a payment scheme in which training providers were incentivized through payment installments they received before training, after the training, and after employment of the trainees. To be eligible, training providers had to jointly collaborate with companies to design trainings based on companies’ demanded skills, and target unemployed youth—especially women, Roma communities, and people with disabilities. This payment scheme proved very successful in ensuring market responsiveness, inclusion of marginalized groups, and yielding higher employment results. In parallel to these pilots, the project worked from day one to ensure sustainability by transferring this approach and methodology to the national Employment Service Agency. In response to North Macedonia’s high unemployment figures, together with regular lobbying and capacity-strengthening activities, the government has taken up this pay-for-performance principle and included it in national labor market measures.
In Albania, RisiAlbania adopted a holistic approach to activate and support system actors in career guidance by strengthening institutional and organizational capacities of public and private providers, enabling them to develop manuals and digital tools through exchange with Swiss and other European partners, and building up the education of career counselors together with the University of Lausanne.
Our inclusive systems work with training providers is always linked to ongoing national reforms, which has led to improved national labor market schemes in North Macedonia, the establishment of Sector Skills Committees in Albania, and the introduction of the latest global ICT standards in Western Balkans countries. Equally, in career guidance, our work is to strengthen or improve the roles of the market actors in this ecosystem and to connect them among themselves.
Learn alongside field practitioners
Helvetas’ Youth Economic Opportunity session features youth skills and employment experts from Albania and North Macedonia from the government, private sector, and projects, sharing case studies on the challenges faced by young jobseekers, solutions to these challenges, and lessons learned.