Addressing the Skills Gap in Latin America: Youth Employment and Labor Market Access

Speakers:

• Miguel Ángel Carreón, Director General, Instituto Mexicano de la Juventud (IMJUVE)
• Mary Lynn Elizondo, Regional Vice President for Human Resources, Americas, Marriott International, Inc.                                     
• Jorge Perez, Senior Vice President for North America, Manpower Group
• Jason Marczak, Director of Policy, Americas Society/Council of the Americas (moderator)

Summary 

AS/COA Miami held a private roundtable on June 1 exploring the underlying challenges for enhancing youth employment in the Western Hemisphere. Discussion centered on the demographic bonus in the region and factors contributing to the widening skills gap, the role of public-private partnerships in addressing this challenge, and facilitating youth access to the workforce. 

A Widening Skills Gap in Latin America

Miguel Angel Carreón of the Instituto Mexicano de la Juventud (Mexican Youth Institute, or IMJUVE)—the Mexican government agency in charge of youth policy—spoke about demographics. Mexico possesses a demographic bonus as the population group under 30 years old outnumbers the aging population. In fact, children younger than 12 years old represent 59 percent of the country’s total population. However, Mexico currently has a 9 percent youth unemployment rate, without taking into account the informal sector. Given these figures, Carreón highlighted the urgency to provide youth with an occupation, especially in countries where large numbers of people are in their productive years and can enhance the country’s competitiveness.   

Panelists noted that strong economic growth in the region, particularly in Brazil and Mexico, has been reflected in the employment sector since 2010. As more technical skills are needed, the workforce is not keeping up. The manufacturing and service sectors have grown the most, but new technologies mean increased skills demands and more competition for talent. Jorge Perez of Manpower explained that the gap occurs because capital investment in Latin America has not been matched by investments in human capital such as education and training programs. In the case of Mexico, Carreón added that the greatest gap exists across gender lines and among members of marginalized groups.

Perez cited Manpower’s quarterly Employment Outlook Survey, which measures hiring processes and challenges faced by employers in 41 countries. One of the top issues has been finding a workforce with the necessary training. Among Brazilian employers, 80 percent struggle when looking for employees who have the right skills to fill jobs. According to Perez, we are now live in a “human age” where talent is the most important commodity. In this environment, education and training must be given higher priority. Perez argued that youngsters should be coached into careers with high demand to ensure future employment.  

Public-Private Partnerships Boost Youth Training 

Understanding the skills in demand for today’s workforce constitutes a key factor for guiding youth to the right career track. For Mary Lynn Elizondo of Marriott, this means developing technical expertise and bilingual aptitudes. The international hotel chain established technical schools in various countries in the region to teach these skills, putting young people through a training program where upon graduating, individuals are guaranteed a position within the company. In Peru, Marriott has an institute focused on introducing disadvantaged youth to careers in hospitality, building skills that serve as entry points for careers in other sectors. Marriott also partnered with Florida International University’s Chaplin School of Hospitality and Tourism Management, providing substantial funding for training domestic and international students. Training programs which focus on international students offer companies an opportunity to hire youth in their native countries after they complete their studies. These students return home as ambassadors for their careers, enhancing the company’s productivity and encouraging peers to seek similar training. 

Carreón noted that a large part of his mandate involves finding occupations for youth between ages 12 and 29. IMJUVE collaborates with private sector investors as well as universities and vocational institutions to ensure students are trained with the right skills to get a job upon completion of their studies. As part of this initiative, IMJUVE partnered with an aerospace university to develop new programs, due to increasing investments in recent years. Mexico has also seen growth in manufacturing and technology; the country produces 80 percent of the world’s Blackberry devices. By partnering with the private sector to understand investment trends and skills in demand, IMJUVE is able to offer scholarships and help youth develop new capacities. In Mexico, cooperation across sectors ensures a pipeline of future workers and contributes to enhance the country’s competitiveness in the region. 

Developing Work Experience for Youth 

Participants at the event agreed on the importance of promoting opportunities in productive fields among youth. A representative from Hewlett Packard (HP) commented on the company’s academic partnerships throughout the region. In Peru, HP has a learning education center where students in primary school receive math training from the company’s staff; HP also provides support for faculty members. This type of program encourages students early on to consider careers in engineering. In Brazil and Mexico, the company has partnered with the Universidade Luterana do Brasil (Lutheran University of Brazil) and Universidad de las Américas (University of the Americas), respectively, to provide equipment, train faculty, and assist students majoring in engineering and mathematics. Elizondo added that in certain countries such as Costa Rica, where the tourism industry represents the country’s top sector, Marriott visits middle schools and encourages young students to prepare for careers in the hospitality industry by highlighting its advantages. 

Speakers also recognized the rigidity of labor legislation in Mexico and other countries in the region as a barrier to youth employment. The culture of internships in the United States has not taken hold in Latin America given stringent hiring regulations, though internships are available through select universities. Perez referred to an International Labor Organization index that measures hiring flexibility across countries. The United States scored 0.2 while Mexico scored 2.4 on a scale where zero is the most flexible. Hiring costs are greater in countries with less flexibility, making companies less likely to evaluate the option of hiring young employees. Carreón also noted the stigma and detrimental psychological effects of unemployment on those just entering the workforce. In addition, participants noted that keeping youngsters at work and away from criminal activities is crucial for the region’s development and competitiveness.