A Proven Recipe for Job Creation that is Cost-Effective and Sustainable
By Willem Gous, The Human Entrepreneur
The unemployment crisis is a ticking timebomb and the time and cost required to fix it are just too much. However, the Human Entrepreneur, with its Rapid Job Creation Program, created 35 jobs in 21 days at the cost of R32,000 per job.
The program creates jobs through business ownership and opens the door to rapid, cost-effective and sustainable job creation while stimulating the local economy and creating new job opportunities for communities.
The challenges of job creation through business ownership
#1. It takes too long.
Most business creation programs are between 6 or 12 months long. If someone is unemployed and need to care for themselves and their loved ones, the time commitment and certainty of a positive outcome may be asking too much. If you are hungry, you want to eat now.
This massive time commitment can also result in a high drop off rate, reducing the effectiveness of money invested and the overall results of such initiatives.
We need to reduce the time commitment required to help recipients have results faster while achieving a better application of funds.
#2. It is expensive and risky.
Longer-term programs are expensive, and you bet on an unknown person who has shown little or no results before entering the program.
Also, in most cases, people gain entrance by simply having an idea. But, unfortunately, business ideas are a dime a dozen. Business success lies not in the idea but the execution.
Would it not be better to have functioning businesses enter such programs to scale and grow them? An old database quote from the IT industry says it all: What you put in is what you get out.
The Rapid Job Creation Program
The Rapid Job Creation Program addresses the challenges mentioned above while increasing the possibility of success for longer-term programs by feeding better quality candidates into them.
I have to reiterate that the Rapid Job Creation Program is not here to replace or take down existing structures and ecosystems but to compliment them and work with them to increase the overall success of job creation initiatives.
In November 2020, we took 50 YES for Youth candidates from Diepsloot and Orange Farm through the Rapid Job Creation Program. Candidates had to build a business in 21 days and generate enough profits to replace their salary of about R5,000 per month.
The program successfully created 35 jobs in 21 days.
The actual program in its current form takes five weeks. The program consists of two parts, the Entrepreneurial Awakening Course followed by the Business Creator Pre-Incubator.
The Entrepreneurial Awakening Course assists candidates in making an informed decision between following a career or becoming an entrepreneur. If they choose entrepreneurship, they have enough information to start a business.
The course is either 5 hours online or 1 day of classroom training. Once someone finishes this course and does the work required, and chooses entrepreneurship, they become eligible to apply to the pre-incubator.
The Business Creator Pre-Incubator adds some educational elements and is a practical application of the entrepreneurial awakening course. The pre-incubator is four weeks long, and candidates have to attend class twice a week for 3 hours each time.
The pre-incubator takes 25 candidates and aims to create no less than 15 business that meets the previously mentioned criteria of replacing their salaries.
Reduced cost and risk
As per a 2018 World Bank blog post, the average cost of creating a job is $30,000, while this program does so at less than $2,500, making it affordable for Africa and other developing economies.
The Rapid Job Creation Program creates a business between 10 and 20% of the per-person cost of a 12-month entrepreneurial incubation program. So now you can create real businesses and then take them into a longer-term program.
A good and cost-effective approach would be to do the Rapid Job Creation Program first and then feed the successful business not into a 12-month program but a 10-month program because there is momentum already.
The Rapid Job Creation Program is also a great enabler of other initiatives. Just think how your impact will grow if your recipients can become business owners and become financially empowered?
Sustainability: Adaptability and resilience
We left the original cohort of November 2020 without support, coaching or mentorship for 3 months. We spoke to 27 of the 35 in March 2021 and found all 27 are still trading.
A surprising result was that an extra 8 businesses were created to create new revenue streams for people.
For example, one candidate has a photography business, and due to tightened lockdown rules in December, he had to scale back. He then started a laundry business for students and had 14 paying customers when we spoke to him.
It shows that the program instils adaptability and resilience in candidates.
The businesses created range from hairdressing, events companies, internet cafes, mechanics, food, clothing, window washing, school transport, soccer coaching and many more. They all serve their local communities.
The program applies to the YES for Youth program, a feeder for other entrepreneurial programs, enterprise supplier development efforts, school leavers, university students and even retrenchment pivoting.
The Human Entrepreneur aims to create no less than 10,000 jobs by working with other initiatives, programs, partners, funders and organisations using this program.
Together, we can address the unemployment crisis and democratise prosperity.