A labor market assessment (LMA) is an analysis of available employment and self-employment (e.g., entrepreneurship/small enterprise) opportunities where a program is operating. This type of study is usually done by sector, such as agriculture, mining, manufacturing, etc. Well-designed LMAs look both at the formal and informal economies, especially in locales where the informal economy is a strong part of the economy and an engine for employment.
LMAs involve detailed analyses of the types of skills employers look for, hiring trends, perceptions by youth of available employment and self-employment, and perceptions by employers and others about the willingness and ability of youth to engage productively in the workforce. For this information, it is essential to involve the private sector in the assessment process.
LMAs should be done as soon as possible in the life of the project. An LMA is crucial for determining strategies for partnering with the private sector; geographic areas a workforce project should prioritize; how to develop and adapt curricula, training, and other livelihood interventions; and setting expectations for the scale and type of placement of youth into employment/self-employment opportunities. LMAs should also be done throughout the life of the project, to identify evolving economic sectors, hiring trends, promising employment/self-employment opportunities, desired skill sets, etc.
A project should plan carefully to engage the private sector effectively when doing an LMA. The project should develop a detailed methodology, including business survey tools, a youth focus group discussion tool (so that youth can provide input on employer perceptions of youth’s skills), and a questionnaire for other key stakeholders. The LMA methodology should also include a plan for selecting a sample set of businesses.
When engaging businesses in an LMA, the project should have one-on-one meetings, especially if proprietary information will be discussed (e.g., hiring trends, greatest challenges in finding employees with the right skill sets). The surveyor should assure the private sector representatives of the confidentiality of data.
The project should carefully explain the rationale for the LMA and how it is in the private sector’s interest. Project staff should also follow up with private sector respondents who were interviewed, to provide them with an overview of the results of the LMA. The private sector interviewees may then feel increased affiliation for the project and more willingness to buy in, facilitating future partnership possibilities.
LMAs ensure that the “supply” of trained workers in a particular workforce program meets the “demand” for workers, and that the program beneficiaries have a tangible outcome (employment/self-employment/income) after training. LMAs are important in determining the skills employers look for, what types of constraints exist for starting or managing one’s business, etc. This information can help ensure that curricula, training efforts, etc., are well-adapted to the local economic realities.
It is likely easier to conduct surveys and gather information on mid- or large-size companies. Yet in many countries where youth and workforce development programs are taking place, the informal sector is the key driver of employment and self-employment opportunities. One way to identify and involve small and informal enterprises is to conduct outreach sessions with associations or networks to which these enterprises may belong, such as guilds or handicraft associations. It may also be important to identify leading business people in the particular sector and ask them to make introductions.
It is likely easier to interview industries in sectors such as manufacturing, IT, mining, etc. Like with the informal economy, many if not most economic opportunities in developing countries exist at some level of the agricultural value chain, be it at the growing process or packaging/export. The entry/access points for engaging the agricultural sector depend on the type of employment/self-employment opportunities that the project seeks to identify along the value chain.
Youth should be actively involved in the LMA in multiple ways. Young people often bring a strong local knowledge of the economic environment and can play a key advocacy and support role in the project. Specifically, youth should be involved in focus groups to test the data on employer perceptions of the readiness of youth to enter the workforce, and they should provide their perceptions of sectors that are promising and not promising.
Market Assessment of Sustainable Employment and Enterprise Opportunities for Out-of-School Youth in Haiti
Report by EcoVentures International (EVI) from the EQUIP3 Associate Award, the Haitian Out-of-School Youth Livelihood Initiative (IDEJEN). The document consolidates the market assessment research, describes the assessment and decision-making tools developed, and provides recommendations for the use of these tools. Interviews with the private sector factored heavily into this study.
Market Assessment Toolkit for Vocational Training Providers and Youth
A toolkit produced for the Women’s Refugee Commission by Columbia University’s School of International and Public Affairs on market assessments. The toolkit contains various questionnaires for various informants, including for local and national businesses and associations.
EQUIP 3 Rwanda Youth Employment Assessment Report
A report on an employment assessment carried out by EDC for the EQUIP3 mechanism in Rwanda that included private sector input.
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