Demand-side factors and the employment of young people : A case study of the recruitment and selection strategies of selected firms in Johannesburg
Authors:   , Gabobegwe Maoshadi 
Published: January 2023

Unemployment is a long-standing and pressing socio-economic phenomenon that affects, markedly, both developed and developing countries. Although, in one way or another, many people are affected by unemployment, the reviewed literature concurs that youth unemployment is a critical component of the overall unemployment challenge. Indeed, the burden of unemployment is borne, tremendously, by young people, especially those who are Not in Education, Employment, or Training (NEETs). The International Labour Organisation (ILO) has declared youth unemployment a global crisis, with approximately 67,6 million unemployed young people worldwide in 2018. In South Africa, the youth unemployment rate escalated to 56.4 per cent in the second quarter of 2019. This disturbing level of unemployment among young people poses a serious threat—for as long as young people stay unemployed. Indeed, the cost of unemployment is too high, not only does it engender discontent among young people who are floundering in poverty and frustration, but it can also trigger or perpetuate all sorts of social, political, and economic effects. These effects only exacerbate the already intricate and onerous global agenda of tackling unemployment— because they give rise to other socio-economic ills (e.g., crime, among others) that also need to be addressed. Owing to this grave and perpetual challenge of unemployment, exploring and understanding the dynamics of youth unemployment continues to be of paramount importance worldwide. This thesis, in particular, seeks to investigate the factors that impede on the employment of the NEETs category, as it may be extremely difficult for them to enter the labour market— and they may lose hope of entering the labour market later in life, if they are unsuccessful while still young. Unlike graduates or other youth categories (i.e., matriculants) who have better chances in the labour market, some young people (by virtue of being ‘dropouts’, teenage moms/dads, having failed matric, among other reasons), remain the most vulnerable to unemployment. For this reason, the primary aim of this thesis is to examine the ways in which employers’ recruitment strategies advantage or disadvantage young people (NEETs). The secondary aims include: (a) examining how employers' perceptions and attitudes, regarding the NEETs youths, influence their recruitment decisions when it comes to employing young people; and (b) understanding the ways in which government strategies (devised to combat youth unemployment) influence employers’ decisions to recruit the youths’ or not. In essence, this study seeks to explore the demand-side factors in the labour market that can help us understand how employers’ recruitment decisions (or recruitment behaviour) affect the employment prospects of young people in the labour market. The focus on demand-side factors is motivated by Labour Market Segmentation (LMS) theories, which serve as the theoretical framework of this thesis. LMS theories’ significance lies in their opposition to neoclassical economics, that posit the existence of a unified labour market (which operates like all other markets), consisting of buyers and sellers in ‘free’ competition. According to neoclassical theory, the difference between workers’ employment and wages is determined by ‘individual preferences’ and investments in ‘human capital’ (skills, experience, formal education, etc.). By contrast, LMS theorists argue that labour markets are fragmented, and that differences on the demand side imply differences in compensations that are not totally determined by individual workers' human capital. Inspired by the claims of LMS theories, this study elected to explore demand-side factors by applying qualitative research methods and techniques to gather and analyse the data gathered, and to ultimately address the research objectives. In particular, non-probability sampling was used to sample 20 firms from four sectors (manufacturing, retail/hospitality, finance, transportation) in the Johannesburg (CBD) region. The respondents were all asked a series of semi-structured questions in order to yield qualitative results that would help determine the employers’ dispositions towards young people; and about the government’s strategies that address youth unemployment. The aim is to provide an in-depth, nuanced understanding of how the respondents’ dispositions influence the inclusion or exclusion of young people in the employers’ recruitment considerations. The aggregate results of the study generally indicate that—although there are innumerable factors that affect young peoples' employment prospects—young people (without skills and tertiary education or matric) are actually being employed, and are still being considered for employment by the majority of the sampled employers (predominantly from retail/hospitality firms). Only a minority of employers stated, categorically, that they do not employ young people, and do not intend to do so. Conversely, the results also reveal that the the majority of employers often recruit young people for general and entry-level jobs that are often offered on a non-standard employment basis. At face value, the employment of young people (without skills) in the majority of the sampled firms may seem to make a difference—and it probably does, for as long as young people are exposed to the world of work. However, in the 4 grand scheme of things, the kind of employment offered in these firms is also problematic, because it is, basically, transient and unsustainable. As such, the young people that occupy these jobs are most likely to find themselves back in the unemployment queues whenever the ‘part-time’ or ‘temporary’ employment contracts are terminated. These jobs are especially problematic because policies such as the National Development Plan (NDP) 2030—in line with Sustainable Development Goals—aim to reduce poverty by creating sustainable employment. Contrarily, these kinds of jobs make it hard to achieve poverty reduction, because they are inherently unsustainable and barely lift people (especially young people) from unemployment and poverty. Based on these results, it can be asserted that the proliferation of non-standard employment compromises the agenda for decent work, and it delays the already sluggish Sustainable Development goal of creating sustainable employment (among other goals). This, then, reveals that there is still a stark and long-standing need for more radical strategies that will ensure the creation of sustainable jobs—without which the unemployment crisis will be far from over. Moreover, the results further indicate that the reasons why the minority of the sampled employers do not employ young people boil down to the fact that young people usually do not have what employers look for in their potential recruits; or that young people do not have what employers believe will contribute to the growth and productivity of their firms. In essence, employers will never employ any young person (or any jobseeker in general) that will be a liability than an asset in their firms. Over and above, this thesis corroborates many of the explanations—encapsulated in the growing literature—for rising unemployment, as well as the claims that unemployment is highly pronounced among young people. However, the contribution of this thesis is that it further offers a nuanced view to understanding the demand-side factors (as additional determinants) that hinder the employment of young people (especially those who make up the NEETs category).