West African nations, including Nigeria, face an unprecedented crisis in employment. Indeed, the International Labour Organisation (ILO) reports that the world must meet the urgent challenge of creating tens of millions of jobs in Africa over the next decade to generate sustainable growth and maintain social cohesion. In Nigeria, the unemployment rate of 23.9 percent is in the upper quartile for West Africa, and continues to remain a burning priority for the government agencies and the organised private sector. Yet the prospect of achieving thriving labour markets seems daunting.
Coupled with Nigeria’s internal security and food security challenges, unemployment, underemployment, a declining economy, changing demographics and skills shortages, there are real challenges to meaningful and sustained change. On the one hand, tightened budgets and demand-side pressures have led many corporate organisations and government agencies to cut budgets, and hence jobs. The need to tackle unemployment is increasingly taking on a new urgency.
How can we collectively move away from the status quo of an anaemic recovery to sustainability in employment and thriving labour markets? Accenture’s point of view – derived from our analysis of key trends, data and leading practices across various countries – is that change can happen. It demands a willingness to look at the issues anew and address them with holistic strategies that can alleviate market fragmentation, change behaviour among the unemployed, close the widening skills gap, and ultimately transform a weak business environment.
Where have all the jobs gone? Addressing the challenges
Accenture has studied today’s environment and identified 3 key challenges that policymakers and employment agencies must address to transform the labour market.
1. Fragmented Labour Markets and a lack of understanding of skills and job matching: There is a mismatch between skills and employment opportunities in many sectors of the economy. Moreover, there are unemployed persons with irrelevant specialised skills and positions that require skills that cannot be learned quickly. There has also been a fundamental shift in the dynamics of the labour market. Labour’s occupational and geographic mobility has risen as the variety of occupations has increased and the needs of the economy diversified.
2. A lack of right behaviour to enter the labour market – especially among the hard to reach: As a result of long periods of unemployment, some workers have lost the incentive to work and re-enter the labour market. Many are lacking right behaviours and attitudes to break free from the unemployment trap.
3. A widening skills gap and changing demographics: In a trend often related to workers’ lack of right behaviour, many have lost the skills that are relevant in today’s marketplace. Out of work, they have not benefitted from employer-generated training and education – and they have not pursued such programmes on their own. This makes it difficult for prospective employees to remain competitive and adapt to employers’ changing demands.
Transforming these challenges into opportunities – and moving toward a thriving labour market – means solving these challenges with a comprehensive understanding of the big picture. Accenture’s work across the European labour and employment community demonstrates the key strategies that are needed – and that each can be tailored to every country’s unique circumstances. Addressing each of these challenges would require customised solutions for the 3 market solutions.
Challenge 1: Fragmented labour markets. Solution: The market intelligence agenda – Moving past the challenge of a fragmented labour market and inefficiencies in matching the right skills to the right jobs, activating an electronic marketplace with intelligent algorithms to filter centralised labour needs and understand the structural make-up of the labour market.
At a policy level, this entails a series of harmonised policies entailing collaboration between the government, universities, and employer/industry associations to quantitatively predict the quantum of specialist skills required in the future, and to develop tactical plans to meet them. At the tactical level of public employment agencies, business analytics can be deployed to identify gaps in the labour market. A few African countries have developed Virtual Labour Markets – an online system used by employers to post job vacancies and by jobseekers to register for benefits and find suitable work or training opportunities. Digitalisation of key data provides real-time information on the labour market. It is an insight-driven approach that is dramatically improving the efficiency and accuracy of job matching.
Challenge 2: Lack of right behaviour to enter the labour market. Solution: The incentives agenda – Previous employees with increasing lengths of unemployment off work tend to lose the tenacity and determination for structured employment, either paid employment or setting up structured SMES.
Many countries now use strategies such as “flexicurity” to give their citizens flexibility and security in the labour market. This approach focuses on reconciling employers’ need for a flexible workforce with workers’ need for security – confidence that they will not face long periods of unemployment.
Challenge 3: A widening skills gap and changing demographics. Solution: The employability agenda – Ensuring that people remain sustainably employed also means that they remain appropriately and adequately skilled. Since extended periods of inactivity often lead to de-skilling, these periods must be addressed in new ways, including “lifelong learning accounts” that extend the learning experience beyond work. This way, education and training merge to form a continuous process that should be supported by a flexible operating model, updated content and financial support. To continue retaining and upgrading the employable population, one solution is to use a Virtual Learning Market, and education portal that involves a continuously updated worker profile including key information on profession and skills, and a prospective model with a set of high demand skills aligned to professions, regions, and industries in the market (based on market trend analysis). A gap analysis between the two identifies missing skills, hard skills, soft skills and certificates and licences that are necessary for the individual to acquire. This is easily done via an advanced training database that consists of blended learning materials.
The rising unemployment levels, industry dislocations as we had in banking between 2008 and 2010, changing social demographics and a widening skills gap would require newer and innovative, technology-based solutions. Through the use of collaborative labour market policies, and adopting more targeted job-matching solutions, fragmentation and diversity in labour markets can be tackled more effectively. A few countries have been able to use some of these new approaches to reduce labour market frictions and move towards greater employment sustainability. Tailoring some of these approaches to our local peculiarities in Nigeria would help reduce our unemployment rate of 28 percent.
Alayande is director, Health and Public Sector, Accenture Nigeria.
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