One of the most intractable problems facing South Africa is high unemployment, particularly (and this is a global problem) among the youth. Initiatives to deal with the issue have failed and our unemployment has risen from 21% in 2008 to over 27% at present. Clearly this is not sustainable.
Recently government, business and labour announced the YES (Youth Employment Service) program to tackle youth unemployment. YES will, over the next three years, provide one million young people with a one year’s internship in a business.
The YES initiative recognises that Small and Medium-sized Enterprises (SMEs) are a fundamental driver of employment and seeks their involvement. SMEs should look to get involved as the program is already funded and apart from helping to overcome unemployment, SMEs can reap benefits for their own businesses.
Most young people do not get a Matric pass and find it extremely hard to find a job. They thus cannot get the experience and skills to become an effective part of the community. In addition, most of the unemployed youth live in townships which are a substantial distance from businesses.
Currently youth unemployment stands at over 50%.
The program has a three-pronged approach:
A database will be built up linking township SMEs to the large corporates which will give priority to trading with these small businesses.
This is particularly an opportunity for businesses who want to tap into the “Black” market. Why not set up a Black-owned SME in a township and train interns in your products/services and in your business? The interns get knowledge and experience and you can offer employment to the stronger candidates in your business whilst helping other candidates become marketable to other businesses.
The interns will earn R3,500 per month. Employers can get this refunded via the Employment Tax Incentive (ETI) which is paid by reducing your monthly PAYE.
There is also the potential to move either one or two places up in your B-BBEE score. A discussion paper is out for comment on amending B-BBEE legislation, the main proposals being –
Remember these are draft proposals and the final legislation could be tweaked.
There will be annual fees (R20,000 for SMEs) for companies who wish to register and participate in the YES program.
Overall, there are plenty of incentives for businesses who wish to participate in the YES program. With most of the large companies putting their support behind this initiative, it will probably be successful and contribute to solving one of the country’s most pressing problems.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.