Youth unemployment is a major symptom of economic stagnation in the developing world. There are a number of causes of unemployment and additionally underemployment. These include a fundamental lack of jobs, limited access to information on the type and location of jobs available, inability on the employers’ part to verify and validate qualifications and skills, and on the part of inexperienced applicants, a lack of knowledge on how to apply. Mobile is increasingly being deployed to help address youth unemployment. This report has elected to address job connection solutions as a core service, around which other value-added services can be added, to alleviate some of the structural issues that can be barriers to employment in emerging markets. Chief among these are improving market information and helping to address the skills gap.
Technology and business factors affecting Job Connection Companies
The use of SMS, voice recognition, call centres and/or web-based models is dependent upon the access applicants have to communication channels. While web-based solutions are the most flexible, SMS is the most accessible for many of the unemployed. To have a strong impact on the labour market, job connection companies need to be sustainable which means having strong operating and financial models. Some of the key features are outlined below:
Operating Models: there are a number of operating models being used based on the underlying three market players of operator, platform provider and content provider. Currently, the platform provider and content provider are typically in partnership, with the operator acting as either a partner or a supplier. There is currently no clear evidence as to which particular partnership format work best.
Financing Models: the companies operating in the mobile job connection market can be split into those operating commercially and those operating with the support of donor funding or ongoing grants. Subsidised funding can be used as companies begin, functioning as social enterprises that can eventually become self-sustaining. Regardless of the source of start-up and pilot funds, the financial model needs to be strong enough for the company to survive in the long-term and have an ongoing impact on the job market.
Charging models: B2B, B2C and combination. The charging model depends on the target market and service combination. In the majority of cases, the hiring businesses pay for the job connection service and the value-added services are charged to the hiring business or to the applicant depending on who is benefiting from them.
Sustainability
Sustainability comes through driving costs down, increasing the volume of activity transacted through the service, and adding further services. Costs can be split into static and dynamic costs for this purpose:
Static costs include the platform and content, e.g. interview tips or training materials. Industries similar to mobile for employment, such as mAgri (mobile agriculture services), have seen the development of common platforms that can provide different levels of service, and a drive towards commonality of content which can be bought and supplied in appropriate modules. There are signs of common platforms being developed, e.g. Souktel, which should make the market easier to enter.
Dynamic costs refer to the update of CVs and jobs availability. These costs are market dependent. For example, models that require agents going to the field to collect CV data will be relatively high. Similarly, where there are a few businesses employing large numbers of people, the transaction costs of increasing the number of jobs available to applicants is relatively high. This is due to the amount of resource involved in engaging with businesses to gain access to their job vacancies. It is more difficult to drive these costs down than driving down static costs.
Increasing volume is dependent on providing a service that is both valuable to users and that is well promoted. Value to users and employers depends on having adequate CVs and a range of jobs available at a reasonable cost. Many of the providers have used operators’ network connections to reach new customers which has worked moderately well.
Potential for Expansion
There are a number of areas where the potential for operators, donors or NGOs to instigate catalytic effects by:
- Encouraging the preparation of effective standardised platforms
- Supporting commercially successful companies to expand their products or geographies. This would be through supporting market assessments or pilots.
- Utilising mobile operators’ large marketing and distribution networks. There is a need to work with job connection companies to develop a business proposition that is reasonable for both parties in order to move to scale.
This report has been prepared by the GSMA to promote understanding of these nascent mobile for employment solutions, their operating and financial models, and their impact on the employment market in frontier markets. In this report it is recognised that there is significant potential for mobile to support youths in developing countries to enter the job market.
This document was originally produced as part of the former Mobile for Development Impact programme.