Tight Market for Entry-Level Talent Leads Companies to Tap New Source: Unemployed Youth

09/08/2016 |


Bridgespan study finds employers building career paths for “opportunity youth” are reaping gains in retention
BOSTON, MA, September 8, 2016—With unemployment in the United States back to single digits, many companies are in a "talent war," struggling to find skilled workers to fill entry- to advanced-level positions. Yet, the solution lies hidden in plain sight: a cohort of 5.5 million plus 16- to- 24-year-olds who are not in school and not working—a population referred to as "opportunity youth.” As part of its continuing study of youth employment, The Bridgespan Group has published a new article exploring the practices of companies that have committed to hiring from this demographic.  

According to Willa Seldon, a Bridgespan Partner and author of the article, “We heard from companies we talked with that their efforts to engage opportunity youth have brought them exceptionally loyal, enthusiastic, and often tech-savvy workers, and created a positive return on investment.”(In another recently released report, Bridgespan authors also explored the potential return on a philanthropic investment of $1 billion in proven initiatives that facilitate career paths for young people.)
Added, Seldon’s co-author Katie Smith Milway, “Though corporate social responsibility usually plays a role, the employer-driven efforts we examined are designed primarily to meet business needs.”  According to Bureau of Labor Statistics data, over the decade from 2012 to 2022, 5.8 million entry-level jobs are expected to be created across a wide range of industries. In addition, more than 80 percent of executives surveyed by Penn Schoen Berland in 2014, as part of a broader study Bridgespan conducted with The Rockefeller Foundation, said they favored hiring youth, citing a shift to a tech-intensive strategy, a desire to strengthen their current and future customer base, and because of the relative ease involved in training younger workers.
Bridgespan’s research draws from three years of prior work on youth employment, including joint research with the Rockefeller Foundation and the US Chamber of Commerce Foundation, as well as scores of Bridgespan site visits and interviews with human resource directors, managers and entry-level trainees. It focuses on how companies like CVS, SK Food, American Express, and State Street Corporation successfully integrate opportunity youth.
CVS, for example, has an apprenticeship program operating in four states with the aim of spreading to 15-20 states in the next year or so. “Other large companies that are looking at opportunity youth as a potential source of talent might consider key aspects of the companies’ approaches,” said Seldon. CVS, for example:
  • Creates an internal workforce development team that more than pays for itself through grants and other funding;
  • Creates partnerships with nonprofit and government workforce development organizations, like Goodwill and the Urban League especially as it pertains to identifying and preparing job candidates;
  • Conducts its own apprenticeship and training programs to train youth for jobs;
  • Provides supports to educate young people about the application process and trains store managers to take advantage of the assets the youth bring to the job; and
  • Works with its store managers to coach them on looking past barriers such as lack of high school or college diploma to attributes like ability to interact with customers, learn and persevere.
SK Food, a food manufacturer and supplier, in 2014 became a pilot site for a LeadersUp program that connects young people to jobs. The program includes:
  • Mentoring on the job to teach and reinforce workplace skills;
  • Flexible management and operations to accommodate youth who may be attending classes or parenting; and
  • Partnering with other local employers to address challenges like transportation.
Of the 190 opportunity youth hired by SK Food since 2014, 80 are still with the company and nearly two dozen have been promoted.
State Street Corporation’s approach has been to collaborate with nonprofit partners since 2005 to find, train and support opportunity youth in structured six-month internships. After the six months, State Street continues to provide support, such as financial assistance with tuition for youth who go to college. With one of its partners, Year Up, State Street has created an alumni network within the company that pairs Year Up alumni one-to-one with interns. Both State Street and SK Food have found retention power in hiring “cohorts” of youth. Indeed, State Street interns that convert to hires stay at the firm almost three times as long as the national average for their age group.
At American Express, which began hiring opportunity youth in small numbers in 2007 through Year Up, support for the program came directly from CEO Ken Chenault. Six years after the program launched as a corporate social responsibility initiative, Technology Vice President Destin Dexter brought AMEX’s efforts to scale by connecting youth to IT jobs. Today Dexter brings on 80-100 Year Up interns annually, and they have a 72 percent conversion rate to full-time staff and retention two and a half times that of traditional hires.
“All of these efforts,” said Simon Morfit, a Bridgespan consultant and co-author of the research, “are employer-driven and for all of them, opportunity youth look less like a problem and more like a talent acquisition solution.”
About The Bridgespan Group
The Bridgespan Group (www.bridgespan.org) is a nonprofit advisor and resource for mission-driven organizations and philanthropists. We collaborate with social sector leaders to help scale impact, build leadership, advance philanthropic effectiveness and accelerate learning. We work on issues related to society’s most important challenges and to break cycles of intergenerational poverty. Our services include strategy consulting, leadership development, philanthropy advising, and developing and sharing practical insights.
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