82 chapter three
creating a new system
3.1 Improving the odds of success p85
3.2 Scaling Up Success p91

98 ENDnotes | 102 Bibliography
104 appendices

8

introduction
Two crises, one paradox

10

»

In Japan, an estimated 700,000 young
people, known as hikikomori, have
withdrawn from society, rarely leaving
home. In North Africa, restless youth were
at the vanguard of the demonstrations
that toppled governments in Egypt and
Tunisia. In the United States, the stillfaltering economy has been so difficult on
Generation Y that there is even a television
show, Underemployed, about a group of
20-something college graduates forced
into dead-end or unpaid jobs. It is a
comedy, but of the laughter-through-tears
variety.

Education to employment: Designing a system that works
Two crises, one paradox

»

These examples hint at two related global crises: high levels of youth unemployment and
a shortage of people with critical job skills. Leaders everywhere are aware of the possible
consequences, in the form of social and economic distress, when too many young people
believe that their future is compromised. Still, governments have struggled to develop effective
responses—or even to define what they need to know.

Worldwide, young people are three times more likely than their parents to be out of work. In Greece,
Spain, and South Africa, more than half of young people are unemployed, and jobless levels of 25
percent or more are common in Europe, the Middle East, and Northern Africa. In the Organisation
for Economic Co-operation and Development (OECD) countries, more than one in eight of all 15- to
24-year-olds are not in employment, education, or training (NEET).1 Around the world, the International
Labour Organization estimates that 75 million young people are unemployed. Including estimates of
underemployed youth would potentially triple this number.2 This represents not just a gigantic pool of
untapped talent; it is also a source of social unrest and individual despair.
Paradoxically, there is a critical skills shortage at the same time. Across the nine countries that are
the focus of this report (Brazil, Germany, India, Mexico, Morocco, Turkey, Saudi Arabia, the United
Kingdom, and the United States), only 43 percent of employers surveyed agreed that they could find
enough skilled entry-level workers. This problem is not likely to be a temporary blip; in fact, it will
probably get much worse. The McKinsey Global Institute estimates that by 2020 there will be a global
shortfall of 85 million high- and middle-skilled workers.
If young people who have worked hard to graduate from school and university cannot secure decent jobs
and the sense of respect that comes with them, society will have to be prepared for outbreaks of anger or
even violence. The evidence is in the protests that have recently occurred in Chile, Egypt, Greece, Italy,
South Africa, Spain, and the United States (to name but a few countries). The gap between the haves and
the have-nots in the OECD is at a 30-year high, with income among the top 10 percent nine times higher
than that of the bottom 10 percent.3
In order to address youth unemployment, two fundamentals need to be in place: skill development and
job creation. This report focuses on skill development, with special attention to the mechanisms that
connect education to employment.
Clearly, employers need to work with education providers so that students learn the skills they need
to succeed at work, and governments also have a crucial role to play. But there is little clarity on which
practices and interventions work and which can be scaled up. Most skills initiatives today serve a few
hundred or perhaps a few thousand young people; we must be thinking in terms of millions.
Why don’t we know what works (and what does not) in moving young people from school to employment?
Because there is little hard data on the issue. This information gap makes it difficult to begin to
understand what practices are most promising—and what it will take to train young people so that they
can take their place as productive participants in the global economy.
One way of looking at this is to think about where school-system reform was a dozen years ago. Before
2000, policy makers, educators, parents, and students had little understanding of how to improve school
systems, or how school systems across the world performed in comparison with one another.

11

12

in sales

Education to employment: Designing a system that works
Two crises, one paradox

That changed with the creation of the Program
for International Student Assessment (PISA).
Administered through the OECD, PISA tested the
abilities of more than 300,000 15-year-olds across
42 countries. 4 The results were groundbreaking.
Finland and Canada proved to have the bestperforming systems in reading in that initial test.
Then PISA went a step further, collecting detailed
and wide-ranging data on educational practices
by country. This allowed nations to assess which
interventions were successful across the board and
which were dependent on the context of specific
systems. School-system reform is still a work in
progress, but with good information in hand,
countries have a foundation from which to build.
With regard to education to employment, there
is nothing comparable to PISA. There is
no comprehensive data on the skills required for
employment or on the performance of specific
education providers in delivering those skills.
Existing data is limited and cannot be compared
across countries.
This was a major challenge in compiling this
report; another was the heterogeneous and
fragmented nature of job-training systems.
Skills training takes many different forms and is
provided by many different stakeholders, including
vocational schools, universities, companies,
industry associations, and local and national
governments. Multiple entities are involved—in
government alone, responsibility typically is
shared among education, labor, and industry
departments. No one has a bird’s-eye view of the
whole process. Trying to develop an understanding
of education to employment, then, is akin to
comparing apples to cherries, even within the same
country.

13

To build a knowledge base, we studied more than
100 approaches in 25 countries. As a result, we
have developed a truly global perspective on what
characterizes successful skills-training systems.
To build a strong empirical base, we also surveyed
more than 8,000 young people, employers, and
education providers in the nine countries that are
the focus of this research.
The education, employment, social, and political
systems of these nine countries span a wide
spectrum. We observed, however, that certain
preferences and practices pertain across borders.
By studying these commonalities and outcomes,
we were able to define global segments of young
people and employers in much the same way that
consumer-product companies define segments
of different kinds of shoppers. We began to see
which attitudes and behaviors mattered most.
This analysis is central to the way we came to
understand the issue, and it represents a new way
of thinking about how to address the twin crises of
joblessness and the skills shortage.
The journey from education to employment is a
complicated one, and it is natural that there will
be different routes. But too many young people are
getting lost along the way. This report, the first of
its kind for McKinsey, is not the last word on the
subject. We believe, however, that it is a good start
in beginning to fill the knowledge gap and thus
provides a useful road map for the future.

14

executive summary

16

• S
eventy-five million youth are
unemployed
• H
alf of youth are not sure that their
postsecondary education has improved
their chances of finding a job*
• A
lmost 40 percent of employers say
a lack of skills is the main reason for
entry-level vacancies**
Around the world, governments and businesses face a conundrum: high levels of youth
unemployment and a shortage of job seekers with critical skills. How can a country
successfully move its young people from education to employment? What are the
problems? Which interventions work? How can these be scaled up? These are the
crucial questions.
In this report, we attempt to answer them. To do so, we developed two unique fact bases. The first
is an analysis of more than 100 education-to-employment initiatives from 25 countries, selected
on the basis of their innovation and effectiveness. The second is a survey of youth, education
providers, and employers in nine countries that are diverse in geography and socioeconomic
context: Brazil, Germany, India, Mexico, Morocco, Saudi Arabia, Turkey, the United Kingdom,
and the United States.
We started this research recognizing the twin crises of a shortage of jobs and a shortage of skills.
In the course of it, though, we realized we needed to take into account another key shortage: the
lack of hard data. This deficiency makes it difficult to even begin to understand which skills are
required for employment, what practices are the most promising in training youth to become
productive citizens and employees, and how to identify the programs that do this best.
The state of the world’s knowledge about education-to-employment is akin to that regarding
school-system reform a dozen years ago, prior to groundbreaking international assessments
and related research. We hope this report helps fill this knowledge gap.
* Exhibit 1 ** Exhibit 2

Education to employment: Designing a system that works
Executive summary

17

a Web
designer

18

Exhibit 1

Exhibit 2
39% of employers say a skills shortage is a leading
reason for entry-level vacancies

Only half of youth believe that their post-secondary
studies improved their employment opportunities
Students who believe their postsecondary studies improved their
employment opportunities1
% of respondents

Lack of skills is a common reason for entry-level vacancies

% of respondents

Saudi
Arabia

60

Private not
for profit

56

Brazil

59

Private
for profit

54

India

54

Public
selective

Germany

53

Public open
access

Mexico

51

Turkey

46

Morocco

44

United
States

44

United
Kingdom

% of employer respondents

51

56

36% of employers also reported a
lack of skills caused “significant
problems in terms of cost, quality,
and time” or worse

The report’s findings include the following six highlights:
1 Employers, education providers, and youth live in parallel universes. To put it another way, they have
fundamentally different understandings of the same situation. Fewer than half of youth and employers, for
example, believe that new graduates are adequately prepared for entry-level positions. Education providers,
however, are much more optimistic: 72 percent of them believe new graduates are ready to work (Exhibit 3).
The same disconnect occurs with regard to education; 39 percent of education providers believe the main
reason students drop out is that the course of study is too difficult, but only 9 percent of youth say this is the
case (they are more apt to blame affordability).
Why are the three major stakeholders not seeing the same thing? In large part, this is because they are not
engaged with each other. One-third of employers say they never communicate with education providers; of
those that do, fewer than half say it proved effective. Meanwhile, more than a third of education providers
report that they are unable to estimate the job-placement rates of their graduates. Of those who say they can,
20 percent overestimated this rate compared with what was reported by youth themselves. Nor are youth
any better informed: fewer than half say that when they chose what to study they had a good understanding
of which disciplines lead to professions with job openings and good wage levels.

Education to employment: Designing a system that works
Executive summary

19

Exhibit 3

Exhibit 4
Seven distinct youth segments exist

Well
informed

% of respondents

42

Employers1

How well
informed
are you?

Moderately
informed

Sizable and distinct
segment not identified

Well positioned
(20%)
“I’m focused and
prepared”

Disheartened (17%)

Driven (18%)

“I know enough to not
care”

“I’m motivated
because I know
education matters”

Disengaged (18%)

Struggling (26%)

“I don’t care to know
much”

“I want to know more”

72

Providers2

Not well
informed

45

Youth3

Why didn’t
you attend
postsecondary?
1 Overall, employees we hired in the past year have been adequately prepared by their prehire education and/or
training.
2 Overall, graduates from my institution are adequately prepared for entry-level positions in their chosen field of
study.
3 Overall, I think I was adequately prepared for an entry-level positions in my chosen field of study.
SOURCE: McKinsey survey, Aug-Sept 2012

Too cool (57%)

Too poor (43%)

“I’m not interested in
attending postsecondary”
Care a little

“I’d like to go to postsecondary, but can’t
afford Care
to” a lot

Care a little

Care a lot

How much do you care about educational and career
options?
SOURCE: McKinsey survey, Aug-Sept 2012

2. The education-to-employment journey is fraught with obstacles. In building our fact base, we
began to think of the education-to-employment system as a highway with three critical intersections: (1)
enrolling in postsecondary education, (2) building skills, and (3) finding a job.
There are significant challenges at each intersection. At the first (enrollment), cost is the top barrier,
with 31 percent of high-school graduates indicating they did not continue their education because it
was too expensive. Among those who do enroll, 46 percent are convinced they made the right choice
in their selection of institution or field of study. At the second intersection (building skills), about 60
percent of youth say that on-the-job training and hands-on learning are the most effective instructional
techniques, but fewer than half of that percentage are enrolled in curricula that prioritize those
techniques. At the third intersection (finding a job), a quarter of youth do not make a smooth transition
to work; their first jobs are unrelated to their field of study and they want to change positions quickly. In
emerging markets, this number rose to as much as 40 percent.

Post-secondary segments

Agreement that graduates/new hires are adequately
prepared

High school
only segments

Stakeholders hold different views about the readiness
of graduates for the job market

20

3. The education-to-employment system fails for most employers and young people. Examples
of positive outcomes in education to employment are the exception rather than the rule.
Based on our survey data, we identified three distinct groups of employers.Only one of them, accounting
for less than a third of the cohort (31 percent), is successful in getting the talent it requires. What
distinguishes these employers is that they reach out regularly to education providers and youth, offering
them time, skills, and money. Of the two other segments, the first is minimally engaged (44 percent) and
struggling the most to find the right workers, while the second (25 percent) is somewhat engaged but
largely ineffectual.
As for young people, the system is not working for most of them, either. We asked youth a combination
of attitudinal and behavioral questions to understand how they thought. On the basis of their answers,
as well as their current employment status, we divided them into seven segments—five for those with
postsecondary education and two for those without (Exhibit 4). Only two of the seven segments have a
positive experience in the job market. They succeed when most do not because they actively manage their
decisions about their education and career. The remaining segments range from those who have become
disheartened (“I know enough to not care”) to those who are disengaged (“I don’t care to know more”) and
those who are struggling (“I want to know more”).
Each of the employer and youth segments we identified has different outcomes and motivations; each
requires a different set of interventions. We also found that the concentration and mix of these segments
can vary significantly by country.
4 Innovative and effective programs around the world have important elements in common.
Two features stand out among all the successful programs we reviewed. First, education providers and
employers actively step into one another’s worlds. Employers might help to design curricula and offer
their employees as faculty, for example, while education providers may have students spend half their
time on a job site and secure them hiring guarantees.
Second, in the best programs, employers and education providers work with their students early and
intensely. Instead of three distinct intersections occurring in a linear sequence (enrollment leads to
skills, which lead to a job), the education-to-employment journey is treated as a continuum in which
employers commit to hire youth before they are enrolled in a program to build their skills.
The problem, then, is not that success is impossible or unknowable—it is that it is scattered and small
scale compared with the need.
5 Creating a successful education-to-employment system requires new incentives and
structures. To increase the rate of success, the education-to-employment system needs to operate
differently, in three important ways.
First, stakeholders need better data to make informed choices and manage performance. Parents and
young people, for example, need data about career options and training pathways. Imagine what would
happen if all educational institutions were as motivated to systematically gather and disseminate data
regarding students after they graduated—job-placement rates and career trajectory five years out—as
they are regarding students’ records before admissions. Young people would have a clear sense of
what they could plausibly expect upon leaving a school or taking up a course of study, while education

Education to employment: Designing a system that works
Executive summary

institutions would think more carefully about what they teach and how they connect their students to the
job market.
Second, the most transformative solutions are those that involve multiple providers and employers
working within a particular industry or function. These collaborations solve the skill gap at a sector
level; by splitting costs among multiple stakeholders (educators, employers, and trainees), investment is
reduced for everyone—an incentive for increased participation. Agreements such as nonpoaching deals
can also boost employers’ willingness to collaborate, even in a competitive environment.
Finally, countries need system integrators (one or several) responsible for taking a high-level view of
the entire heterogeneous and fragmented education-to-employment system. The role of the system
integrator is to work with education providers and employers to develop skill solutions, gather data, and
identify and disseminate positive examples. Such integrators can be defined by sector, region, or target
population.
6 Education-to-employment solutions need to scale up. There are three challenges to achieving scale:
first, constraints on the resources of education providers, such as finding qualified faculty and investing
in expansion; second, insufficient opportunities to provide youth with hands-on learning; and third, the
hesitancy of employers to invest in training unless it involves specialized skills. There are solutions for
each.
In the first instance, coupling technology—the Internet and other low-cost outlets—and a highly
standardized curriculum can help to supplement faculty and spread consistent instruction at a modest
cost.
For the second challenge, apprenticeships traditionally have provided hands-on experience, but there
are not enough spaces to meet demand. Technology, in the form of “serious games” and other kinds of
simulations, can help here, too, by offering tailored, detailed, practical experience to large numbers at a
comparatively low cost. Serious-game simulation could become the apprenticeship of the 21st century. In
a sense, the future of hands-on learning may well be hands-off.
Third, employers often are willing to invest only in those specialized skills whose value they can fully
capture; they do not want to spend money on employees who might take their expertise elsewhere. But
for providers, it is expensive to develop solutions for every employer. One proven approach is to combine
customization and scale by offering a standard core curriculum complemented by employer-specific topups.

The passage from education to employment is a complicated one, with many different needs and
requirements demanding negotiation along the way. It is inevitable, then, that there will be a variety of
routes. What should concern us all is that far too many young people are getting lost along the way.
Our purpose in this study is to consider the journey from education to employment and to examine what
can be done to improve it. By providing new information and analysis, we seek to help employers, education
providers, governments, and young people begin to create a different and better system. This report is not a
definitive road map, but it is a start and a structured call to action.

21

22

chapter one
a congested highway

24

»

Think of the education-to-employment
system as a highway, where three
drivers—educators, employers, and
young people—all want to get to the
same destination. There are three critical
intersections—when young people enroll
in postsecondary education, when they
build skills, and when they seek work.
At every point, each driver needs to take
account of the others to keep moving
safely and efficiently. Our research,
however, shows that doesn’t usually
happen. Instead, drivers don’t take
one another into account, proceeding
obliviously in their own lanes, or they
collide, leaving everyone worse off than
when they started.

Education to employment: Designing a system that works
A congested highway

»

As we look at the transition from education to employment, we see that there are three critical
intersections: enrollment, building skills, and finding a job. Exhibit 1 (page 26) shows a way of
visualizing these intersections and the relevant practices (inputs) that form the signposts.
This visualization is useful because it integrates the vantage points of all three drivers and presents
education-to-employment as a complex system with lots of different places to enter and exit, not as a
straight road. One of our most striking findings is that at each intersection, the points of view of the
different drivers are often so different from one another that it’s difficult to believe they are on the same
highway.
For example, fewer than half of youth and employers believe that new graduates are prepared adequately
for entry-level positions. Among providers, though, 72 percent say they are. Similarly, while 39 percent of
postsecondary educators believe that students drop out because the course of study is too difficult, only
9 percent of youth agree.1 Even within groups, there are vast differences in attitudes and behaviors. In
short, even if the drivers are on the same road, they don’t seem to be looking at the same map. No wonder
they are missing one another.
Let’s look at each of the three critical intersections.

1.1 Critical intersection 1: Enrolling in postsecondary education
As young people approach this point, they need to make two related decisions. Should I go on?
If so, what should I study, and where should I study it?

Choosing whether to continue school
Establishing how many young people go on to postsecondary courses (either academic or vocational), and
what happens to them, is not easy. How countries define and measure the entry rates into such programs
varies widely. Moreover, national figures often do not include on-the-job apprenticeships or count those
who go directly from secondary school into work.
For this reason, it is common to make comparisons using the NEET rate (not in education, employment,
or training). The social and personal costs of quashing the energies of youth are tremendous. So are
the economic costs. The European Foundation for the Improvement of Living and Working Conditions
issued a report in 2012 that estimates the cost of supporting the NEET population in Europe to be €153
billion (approximately $200 billion), or 1.2 percent of European GDP.2 The NEET rates of the countries
in our study range from a low of 10 percent in Germany to 30 percent in Turkey 3 (Exhibit 2). It’s also
important to keep in mind that in addition to the NEET rate, another significant percentage is either
underemployed or otherwise dissatisfied with available choices.
Our survey indicates that youth who do not pursue postsecondary education see themselves in one
of two segments: those who cannot afford to and those who cannot be bothered to (see the box on
youth segmentation). Unfortunately, both segments have poor outcomes, including high levels of
unemployment.
The reasons for failing to continue one’s education vary; for example, our survey shows that in Brazil,
Mexico, and the United States, affordability is the most important factor, while in Germany, lack of

25

26

Exhibit 1

Our framework for exploring the education-toemployment system
Practices
(inputs)

Matchmaking
Connecting youth with
appropriate jobs

Credentials
Skill validation and
widespread recognition

Coordination

Enrollment
ENROLLMENT

FINDING A
JOB
Can young job
seekers find
open positions?

Are enough
youth being
trained for the job
market?

Sector- and systemlevel collaboration

The number of youth
who have access

Completion
The percent of youth
who graduate

Student decisions
How youth choose a
path

BUILDING SKILLS
Is training giving
youth the right
skills?

Accountability
Ensuring quality
at an institutional
level

Delivery
The pedagogy and
staff

Curriculum
The content and
quality of what
students learn

Education to employment: Designing a system that works
A congested highway

27

a banker

28

Exhibit 2

Exhibit 3

NEET rates among youth in OECD countries, 20111

Cost matters everywhere, but value, lack of interest, and
capacity also play a role in certain countries

capacity is paramount. Turkish youth (and Indian
youth, to a lesser extent) question whether further
education will provide an economic return
(Exhibit 3). We were surprised by this, because
most research shows that further education makes
economic sense. 4,5 But if Turkish youth do not
see the world this way, it is no wonder that they
are more likely to turn off the highway at the first
intersection. They are seeing signs that read “No
additional value ahead.”
Nor are Turkish youth entirely wrong: while paying
for postsecondary education in Turkey does bring
net incremental value, the present value of that
return is one of the lowest in the OECD (Exhibit 4).
There are also indications that even this low return
is decreasing, particularly in the formal private
sector.6

Turning to the findings of our India survey, we
were struck by the comparative lack of confidence
in the value of further education because the
achievements of students from the country’s elite
management schools and engineering colleges
are so well known. One explanation is that our
survey looked at students from a wide variety
of backgrounds, and respondents from India
are among the most likely to state that their
socioeconomic background will largely determine
their future occupations and career.
Youth in Saudi Arabia also show a decided lack of
interest in continuing their studies. In this case,
the response might be related to the fact that many
Saudi youth intend to work in the public sector,
where postsecondary qualifications are often not
a requirement.

Education to employment: Designing a system that works
A congested highway

Respondents in Morocco point to a lack of time
for their studies due to their work commitments,
as well as to a lack of interest in continuing their
education. National conditions might well play a
role here, as the country faces a severe lack of jobs
for young people.
The chief complaint of German young people,
uniquely, is that there are not enough places to
study. The numbers appear to back this up. A little
more than 20 percent of Germans aged 25 to 34
have a postsecondary degree. Not only is that
among the lowest in the OECD, but the figure is also
unchanged in comparison with those aged 55 to
64. In most industrialized countries, by contrast,
educational attainment has risen over the last 30
years.7
Maybe the most puzzling response of all, however,
comes from youth in the United Kingdom. The
country is home to many of the world’s best and
most famous universities, and it has increased
the number of university places markedly. Even
so, British youth give the lowest priority of those
in any country in our survey to continuing in
postsecondary education; only 40 percent believe
that postsecondary education will improve their
chances of securing a job. British respondents also
were not well informed when making decisions
about postsecondary education (Exhibit 5).
As a result, youth are quick to detour from the
education-to-employment highway.

Choosing what to study and where
Enrollment is only the first part of the journey.
Once youth decide to continue their schooling, they
face the daunting task of choosing what to study
and where to study it. The evidence is distressing:
way too many young people take a wrong turn here.
Fewer than half of those surveyed are confident
that if they had to do it again, they would study the
same subject. That’s a lot of disappointment; it’s
also a sign that students don’t have the information
they need to make the right choices. In response
to another question, youth across the surveyed
countries said they were not well informed

Education to employment: Designing a system that works
A congested highway

31

Exhibit 5
about the availability of jobs or the level of wages
associated with their course of study.

Youth are not well informed when making
educational choices
Youth knowledge when choosing what to study1
% of respondents agreeing that they knew
about the following areas when choosing
what to study

% of respondents, overall average of four
areas

63

Saudi Arabia
49

46

46

Brazil

51

Mexico

50

India

50

40

47

Turkey

43

Germany

41

United States
Family
opinion

Job
Wages
openings

Graduation
placement
rates

Morocco

30

United Kingdom

30

Ø 45
1 I knew which careers had many jobs when I was choosing what to study.
I knew which careers had high wages when I was choosing what to study.
I knew which education providers had high graduation rates and successful job placement rates when I chose
where to study.
I knew my family’s opinions of various disciplines/programs when I chose what to study.
SOURCE: McKinsey survey, Aug-Sept 2012

Some 40 percent of youth also report that they
were not familiar with the market conditions and
requirements even for well-known professions
such as teachers or doctors. Without this
understanding, many students choose courses half
blindly, without a vision of whether there will be a
demand for their qualifications upon graduation.
Finally, a large number of students don’t know
what they don’t know. In Brazil and Saudi Arabia,
for example, those surveyed believed they had a
good grasp of potential careers. When asked about
specific occupations, however, they proved not to
be particularly well informed: for instance, only 46
percent of youth in Saudi Arabia and 58 percent of
youth in Brazil reported understanding the skills
required and wage levels for school teachers.
We systematically analyzed the answers young
people gave us and broke down what we heard
into seven distinct segments. Each segment has
different outcomes; each requires a different set
of policies to improve the chances of those within
them (See youth segmentation analysis on pages
32-35).
Another revealing finding is that in regard to
vocational education, the influence of societal
perception is alive and well. In almost every
society, occupations that require a higher level
of studies tend to carry more status. Consider
that 70 percent of young people surveyed believe
vocational schools are more helpful in getting a job
and half said they find it more appealing than an
academic track. At the same time, though, nearly
two-thirds of youth said that vocational tracks
were less valued by society. Of those who said they
preferred the idea of vocational training, fewer
than 40 percent actually enrolled in such courses
(Exhibit 8). In fact, of all nine countries surveyed,
Germany is the only place where students believe
that the academic and vocational paths are held in
equal esteem (Exhibit 9).

32

Youth Segmentation
We asked 4,500 youth a combination of attitudinal and behavioral questions to develop an understanding
of how they thought. On the basis of their answers and outcomes, we broke down the population into seven
segments—five for those with postsecondary education and two for those without. We then differentiated
the five postsecondary segments on two critical axes: the extent to which they were informed about the
choices they made and their interest in pursuing their education and career. (Exhibit 6)
Postsecondary Segment 1: Struggling to get ahead
Youth in this segment (representing 26 percent of the cohort) place a great deal of importance on
educational factors but are not well informed about them—a combination that leads to poor outcomes. For
example, of the 13 reasons a youth might choose to study at a particular educational institution (ranging
from parental advice to job-placement rates), this group places above-average priority on 11 of them, a
higher proportion than any other segment.8 People in this segment value things like the prestige of the
school, which employers themselves rank much lower.
Perhaps as a result, only about 40 percent of this segment say they would make the same educational
decision if they could choose again what to study and where, and they rate themselves low on both general
and job-specific preparation. Just over a quarter (27 percent) of this segment is unemployed, and 16 percent
did not finish postsecondary education, primarily because they found it too demanding.
Given the interest that members of this segment have in education, providing accurate information and
improving their skills is critical to helping them succeed. They need guidance on such matters as career
paths, postsecondary placement opportunities, and wages.
Postsecondary Segment 2: Driven—education is important to success
Representing 18 percent of postsecondary youth, this segment also places high importance on educational
factors, but it differs from Postsecondary Segment 1 in two respects. First, members do not prioritize
career factors to the same degree, and second, they are more selective in the educational factors they
consider important. Unlike the individuals in Segment 1, for example, they do not consider it important to
go to the same institution as their friends. They are most likely to believe that education, as opposed to
their socioeconomic background, is the most important factor in determining success. They are driven to
succeed.
With an unemployment rate of 16 percent, outcomes for this segment are much stronger than for Segment
1, although almost the same share (15 percent) did not finish their education, primarily because they left to
take jobs. This segment is willing to pay for more education if doing so will improve educational and career
outcomes. Creating paths for these youth that do not force them to choose between studying and working
would allow more of them to fully benefit from their desire for education.

Education to employment: Designing a system that works
A congested highway

Postsecondary Segment 3: Disengaged
This segment (representing 18 percent of postsecondary youth), like Postsecondary Segment 1, is not well
informed. Unlike the individuals in that segment, though, they are less motivated to improve their outcomes,
and they place less emphasis on education.
It is no surprise, then, that the youth in the disengaged segment have the poorest outcomes: almost 40
percent are unemployed, and 38 percent did not complete their education satisfactorily (15 percent did not
finish their education at all and 23 percent failed to graduate on time). They are also least satisfied with their
jobs.
The disengaged segment is frustrated: 14 percent of those who sought a job related to their field of study took
more than a year to find one, and 37 percent were still looking. It might be for this reason that the segment
contains the most individuals who say that if they had another chance they would choose a different field of
study. While other segments with poor outcomes are often willing to pay for improved outcomes, disengaged
youth are relatively unlikely to do so.
Providing individuals in this segment with better information might help improve their opportunities and
outcomes, but things like general career support resources probably will not work because they are less apt
to use them. What are required are interventions tailored to individual circumstances, such as one-on-one
outreach, assigned mentors and guidance counselors, and customized solutions.
Postsecondary Segment 4: Disheartened
Similar to the disengaged segment, the youth in this segment (representing 17 percent of postsecondary
youth) are demotivated and frustrated. Their frustration arises from a strong belief that their background
will determine their likely career opportunities: they do not believe that a good education can overcome their
economic disadvantage. Perhaps as a result, they place greater priority on listening to the opinions of their
family and friends when making education-to-employment choices, and they put less emphasis on factors
employers consider important, such as in-person presentation and previous work experience. This segment
is least likely to be willing to pay for additional education; more than 70 percent would not make the same
decision about their education a second time. Twenty-one percent are unemployed, and twenty percent did
not finish their education due to costs, family influence, and concern that their skills were not improving. Only
a quarter of those employed say their job is related to their field of study.
People in the disheartened segment are less likely to respond to traditional information approaches because
they don’t believe in the system. Reaching individuals in this segment means helping them rethink the
perception that education is unable to help them overcome socioeconomic disadvantage. They need to see
for themselves that people from their own background can succeed.

33

34

Postsecondary Segment 5: Well positioned
This group (20 percent of the total) is in the best shape: 84 percent report above-average incomes, and only
8 percent failed to graduate. They are well informed and care about their educational options and future.
While this segment also believes that socioeconomic background plays an important role in future success,
they are confident that they can take advantage of the opportunities that emerge, and they are willing to pay
for them: 70 percent say they would pay for additional education if it would improve their career outcomes.
Secondary Segment 1: Too cool to study
The young people we surveyed who did not take up postsecondary education or training fall into two
groups of roughly equal size: those who are uninterested or who do not see the value of further education
(“too cool to study”) and those who might be interested but cannot not afford further education (“too poor
to study”). Overall, the percentage of youth who don’t enter postsecondary varies significantly by country,
but the dynamic is similar across all surveyed countries.9
People in the too-cool-to-study group don’t believe that education matters for their future. Only 10 percent
believe they lack required job skills; just 5 percent are willing to pay for additional education. But these youth
face challenges: more than 40 percent are unemployed, and of those who do have jobs, a third are in interim
positions that they plan to leave.
In a sense, this group isn’t even on the highway. Direct, early, and focused intervention will be required to
get them started.
Secondary Segment 2: Too poor to study
The two leading reasons this segment offers for not pursuing further education were cost (37 percent) and
needing to work (22 percent). Their rates of unemployment (42 percent) and interim employment (40 percent)
are high. But at least when it comes to their outlook, they are on the right track. Working with this group is
relatively straightforward, albeit difficult: it will be important to introduce lower-cost educational options
and offer more effective financing. Seventy-five percent of people in this group state that they would pay for
additional education if doing so would improve their career options.
As we look at these segments, there are select differences in gender and age that are important to
recognize. From a gender perspective, the driven segment is more likely to include females. Similarly,
the well-positioned segment is composed largely of older (26- to 29-year-olds) and wealthier youth.
More striking, however, are the country variations. For example, there is a distinctly higher percentage of
disengaged youth in Morocco, while Saudi Arabia has the most youth who are in the well-positioned
segment (Exhibit 7).

Education to employment: Designing a system that works
A congested highway

35

Exhibit 7

Exhibit 6
Seven distinct youth segments exist

Countries have different mixes of youth segment types
Distribution of postsecondary segments by country

Disheartened (17%)
How well
informed
are you?

Moderately
informed

Not well
informed

Why didn’t
you attend
postsecondary?

“I know enough to not
care”

“I’m focused and
prepared”

Driven (18%)
“I’m motivated
because I know
education matters”

Disengaged (18%)

Struggling (26%)

“I don’t care to know
much”

“I want to know more”

Too poor (43%)

“I’m not interested in
attending postsecondary”
Care a little

“I’d like to go to postsecondary, but can’t
afford Care
to” a lot
Care a lot

How much do you care about educational and career
options?
SOURCE: McKinsey survey, Aug-Sept 2012

This variation is influenced by multiple factors, including the country’s labor-market situation. For example,
in Saudi Arabia, there is often an expectation among youth of public-sector employment upon graduation.
Perhaps it is for this reason that only 27 percent of Saudi Arabian youth who enter private-sector employment
are in the well-positioned segment, versus 42 percent of those entering state employment (in other countries,
there are equal percentages for these two groups).
In Morocco, the high rate of disengaged youth can also be linked to labor-force and education-system factors.
First, the high youth unemployment rate in Morocco (about 28 percent), as well as the challenging job growth
situation, may induce pessimism. Second, even when youth want to pursue postsecondary education, a
relatively low percent believe it helps them gain employment opportunities, and employer, providers, and
youth question the preparedness of graduates exiting the system (see sections 1.2 and 1.3). Finally, Moroccan
youth are among the least likely to say that they would choose to study at the same institution again. As youth
in Morocco see the situation, it is no wonder that many choose to disengage.

36

This perception of vocational courses translates
into social attitudes regarding kinds of work. We
asked youth in each surveyed country to rate the
attractiveness of certain occupations; there is
considerable variation in their responses (Exhibit
10).
The differences are fascinating. In Brazil, for
example, young people rank teaching as among
the least attractive occupations; in Mexico and
the United States, it is one of the most attractive.
This raises certain questions: for example, why
are health-related occupations such as medical
assistants and health care technicians so much
more attractive in Mexico and Morocco than in
other parts of the world?
These questions are interesting in and of
themselves. But raising the reputation of relatively
unpopular jobs matters in broader terms. The
vast majority of expected job growth in countries
such as the United States is in occupations that
do not require college degrees. According to
the US Bureau of Labor Statistics, of the top 30
occupations with the largest projected growth to
2020, only 4 require bachelor degrees.10 For sectors
and occupations that are struggling to attract
enough skilled personnel, such as home health or
personal care aides, understanding the drivers of
student preferences can be instructive.

1.2 Critical intersection 2: Building skills
Two key questions must be answered at this point.
What skills do students need? How should skills
training be delivered?
As each stakeholder seeks to negotiate this
intersection, the education-to-employment
highway becomes particularly chaotic, with
everyone pushing ahead with little regard to the
others on the route. Consider, for example, the
different views on whether graduates are ready to
succeed in entry-level positions (Exhibit 11).
These differing perspectives hold across

In our survey,
58 percent of youth
said that practical,
hands-on
learning is an
effective approach
to training.
However, only
24 percent of
academic-program
graduates and
37 percent
of vocational
graduates said
that they spend
most of their time
in this manner.

Education to employment: Designing a system that works
A congested highway

countries, with Germany and the United States
demonstrating the widest gaps between the
opinions of providers and employers (Exhibit 12).
Opinions on the level of preparedness differ
depending not only on who is answering the
question, but also on what sector they represent.
Just over half of employers in education, finance,
and health care—sectors where recruits are
often professionals—rate their new employees
as adequately prepared. Employers in trades,
construction, and manufacturing were less
sanguine (Exhibit 13).
To get a better understanding of how employers
approach this intersection, we segmented them
into three groups, based primarily on their
attitudes and behaviors. We found that the
employers who report the best outcomes with
regard to the preparedness of new workers are
those that are most attentive at all three critical
intersections.
One important conclusion: the employers who
engage the most, and the earliest, have the best
outcomes. Just as we segmented the young
people in our study, we explored the attitudes
and behaviors of the 2,700 employers surveyed,
dividing them into three categories (see the box
on our employer segmentation).
A closer look at how employers regard the specific
skills possessed by graduates is also informative.
We asked employers and education providers
for their assessments of the importance of 12
individual skills and their evaluation of general
competency of the young people they hire in regard
to the skills. Their responses highlight three
important points (Exhibit 15).
First, compared with education providers,
employers are much clearer in their ranking
of the relative importance of various skills.
Employers cite work ethic and teamwork as the
most important skills in almost every country;
education providers give similar weights across
the board.

37

Second, employers note a mismatch between what
they need and what they are seeing; they rank the
competence of new hires in each of the various
skills lower than the importance they give it.
Third, in some skills, there is a wide gap between
the perspectives of employers and education
providers on the competence of new hires. The
difference is particularly stark in theoretical and
hands-on training, problem solving, and computer
literacy.
Digging deeper into the data, we can tease out
further differences. For example, compared with
those in other countries, education providers
in Brazil and Mexico are much more likely than
employers to rate youth as competent (Exhibit
16). Even in countries where the differences in
perception appear narrow, there is a fair amount
of misalignment on specific competencies.
In Germany, for instance, providers are more
likely than employers to rate youth competent
in theoretical and hands-on training within a
discipline. On the other hand, employers rate youth
leadership competencies higher than providers do.
Another gap has to do with how to reach
competency; in this case, the difference is between
youth and their instructors. In our survey, 58
percent of youth said that practical, hands-on
learning is an effective approach to training.
However, only 24 percent of academic-program
graduates and 37 percent of vocational graduates
said that they spend most of their time in this
manner (Exhibit 17).
We also found it intriguing that young people
consider online or distance learning to be as
effective as traditional formats. Given that
economics is a major factor in limiting access to
postsecondary education, scaling up distance
learning could be a cost-effective way to provide
more educational opportunities.

38

Exhibit 9

Exhibit 8
The perception challenge of vocational education
Vocational/skills program

In every surveyed country except Germany, youth
stated that academic paths were more valued by society
than vocational ones

Academic program

Value of program types1

Value of academic and vocational paths by society1

% of respondents

% of respondents stating that academic paths were more valued by society
than vocational paths

Most helpful
for getting
a job

31

69

75

73

70

67

65
60

More valued
by society
Personally
prefer to
pursue

64

36

52

Of those who would
prefer vocational,
~38% attended such a
program if they went
on to postsecondary

60

Ø 64

58
49

48

Of those who prefer
academic, ~80% attended
an academic program if
they went on to postsecondary

1 Now I would like to understand how you value different post-secondary education options. For each of the
following statements, please tell me your opinion on which type of education–vocational/skills or academic–
better applied.

1 Now I would like to understand how you value different post-secondary education options. For each of the
following statements, please tell me your opinion on which type of education–vocational/skills or academic–
better applied.

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

Education to employment: Designing a system that works
A congested highway

39

Exhibit 11

Exhibit 10
Youth perception of jobs by country1

Stakeholders hold different views about the readiness
of graduates for the job market

Occupation

Saudi
Brazil Germany India Mexico Morocco Arabia

United United
Turkey Kingdom States

Total

Professional degree

Engineer

71%

51%

65%

41%

54%

29%

57%

34%

37%

49%

Professional degree

Doctor/surgeon

60%

47%

60%

49%

46%

30%

55%

37%

37%

47%

Professional degree

Lawyer

60%

48%

51%

43%

59%

35%

57%

37%

37%

47%

Bachelor’s

Financial analyst

57%

46%

53%

40%

50%

29%

47%

36%

29%

42%

Bachelor’s

School teacher

33%

41%

50%

46%

42%

27%

48%

41%

42%

42%

Bachelor’s

Accountant

50%

43%

52%

40%

41%

26%

43%

32%

31%

39%

2-3-year college degree Web developer

64%

52%

60%

54%

42%

35%

52%

37%

42%

49%

2-3-year college degree Graphic designer

66%

49%

59%

55%

61%

24%

48%

31%

45%

48%

2-3-year college degree IT technician

59%

51%

58%

50%

39%

37%

51%

38%

39%

47%

2-3-year college degree Social worker

50%

40%

62%

46%

58%

38%

41%

33%

36%

44%

Certificate

Police officer

47%

45%

50%

38%

53%

28%

35%

31%

30%

39%

Certificate

Medical assistant

45%

43%

48%

45%

52%

22%

41%

32%

32%

39%

Certificate

Health care
technician

39%

36%

48%

47%

63%

32%

43%

25%

32%

39%

Certificate

Teacher assistant

43%

36%

46%

46%

37%

16%

41%

32%

34%

38%

Certificate

Secretary

47%

34%

42%

48%

33%

34%

32%

27%

34%

36%

Certificate

Electrician

37%

37%

42%

34%

27%

23%

35%

26%

29%

32%

Certificate

Mechanic

36%

39%

43%

31%

22%

21%

29%

22%

27%

30%

Certificate

Construction worker

38%

31%

42%

31%

14%

12%

26%

19%

22%

27%

Certificate/no ed

Sales representative

54%

39%

45%

38%

43%

30%

32%

26%

24%

36%

Certificate/no ed

Customer service

36%

35%

46%

45%

44%

26%

38%

30%

28%

36%

Certificate/no ed

Food service worker

44%

42%

41%

41%

36%

17%

40%

25%

27%

35%

Certificate/no ed

Hotel staff

48%

33%

39%

42%

37%

20%

29%

28%

25%

33%

Agreement that graduates/new hires are adequately
prepared
% of respondents

Employers1

42

72

Providers2

Youth3

45

1 Calculated as % who find the field attractive/(% who are familiar with it).

1 Overall, employees we hired in the past year have been adequately prepared by their prehire education and/or
training.
2 Overall, graduates from my institution are adequately prepared for entry-level positions in their chosen field of
study.
3 Overall, I think I was adequately prepared for an entry-level positions in my chosen field of study.

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

40

Exhibit 13

Exhibit 12
Perception of graduate readiness for the job market by
country
Agreement that graduates/new hires are adequately
prepared

Employee preparedness by sector1
% of employer respondents who state that new-hire employees were
prepared; minimum 100 respondents per sector

% of respondents

Provider
perspective1

Employer
perspective2

United States

87

49

India

83

51

Germany

83

Mexico

77

Saudi Arabia

70

Turkey

70

Brazil

67

United Kingdom
Morocco

43

61
53

40

Education

-38

Financial intermediation

52

Health and social work

51

-32
-40

20

43

Other

-37
-15

50

36

54

Difference

55

31

A majority of employers in only three sectors state that
their new-hire employees were prepared

-20
-36
-25
-33

Manufacturing

42

Construction

41

Transport, storage, and communications

41

Real estate, renting, and
business activities

38

Wholesale and retail trade

38

Agriculture, hunting, forestry, and fishing

37

Hotels and restaurants

35

1 Overall, graduates from my institution are adequately prepared for entry-level positions in their chosen field of
study.
2 Overall, employees we hired in the past year have been adequately prepared by their pre-hire education and/or
training.

1 Overall, employees we hired in the past year have been adequately prepared by their pre-hire education and/or
training

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

1.3 Critical intersection 3: Finding
employment

29) was 15 percent across more than 100 countries,
three times the unemployment rate of those over
30.11 One in five unemployed young people in
advanced economies has been seeking work for a
year or more. This figure rises to about 30 percent
in the euro area.12

The third critical intersection is when youth
prepare to leave education behind and enter the
workforce. Ideally, there is a seamless merging
of interests at this point. Students want to find a
job suited for their skills—and fast. Employers
want to find the right talent. Educators value high
placement rates as an indication of the relevance
and quality of their programs.

The youth perspective

So what do we see? Congestion, conflicting signals,
and poor signposting are common. Although the
factors leading to unemployment are complex,
the high levels of youth unemployment indicate
the seriousness of the problem. In 2011, the
unemployment rate for young people (aged 15 to

Youth often find themselves on the hard shoulder
when it comes to finding a job. Of those in our
sample who had a job, approximately one in four
(27 percent) young people took more than six
months to find their initial employment. Among
working youth, only 55 percent landed in a job

How do the three stakeholders see the situation?
Let’s break it down.

Education to employment: Designing a system that works
A congested highway

Least likely to
engage with
youth or
providers, or to
do so with
intensity
Most likely to
say skill issues
have a
detrimental
impact

SOURCE: McKinsey survey, Aug-Sept 2012

25% of
employers

31% of
employers
Engage
frequently with
youth and
providers, with
high intensity
Least likely to
say skill
issues have a
detrimental
impact

Members of the
stalled segment
have the most to
gain from
changing the
way they
navigate the
education-toemployment
highway. The
problem, though,
is that though
they are lost,
they are unwilling
or unable to take
action to
improve their
sense of
direction.

Education to employment: Designing a system that works
A congested highway

Employer segmentation
The importance that employers place on recruiting and hiring, as well as how well they work with education
providers, in large part determines their success with new hires (Exhibit 14). We identified three types of
employers and found that large, medium, and small companies are represented similarly in each of the segments.
Segment 1: Stalled
The stalled segment, which represents nearly 44 percent of employers, has an almost cavalier attitude to hiring—
and it shows.
Fewer than half of those in this segment rate hiring factors as important.13 They are less likely to train their talent
and less willing to pay for it. Forty-two percent have never interacted with education providers. When they have,
only 21 percent say it was effective, compared with 40 percent of those in Segment 3.
It comes as no surprise, then, that stalled employers have disappointing outcomes. Only 25 percent say they
are finding the right talent; 27 percent say that a lack of skills is hurting their business. Members of the stalled
segment have the most to gain from changing the way they navigate the education-to-employment highway. The
problem, though, is that though they are lost, they are unwilling or unable to take action to improve their sense of
direction.
Segment 2: Neutral gear
Approximately 25 percent of employers fall into this segment. Like those in Segment 3, those in neutral gear
take connecting, recruiting, and hiring seriously, but they are not seeing great results. They are doing the right
things, but without enough intensity and frequency.
For example, 72 percent of those in Segment 3 say they interact with education providers, compared with
60 percent of those in Segment 2. With regard to coordinating within the industry, the figures are 57 percent
and 48 percent. As for reaching out to youth, 78 percent of Segment 3 reports doing so versus 69 percent of
Segment 2. The differences might not seem significant, but the evidence shows they are.
Segment 3: Racing
Accounting for 31 percent of respondents, these employers cruise the education-to-employment highway
with confidence and skill. Employers in this segment considered hiring and working with educational
institutions very important and acted on that belief.
Racers are more likely to offer training to their employees—both internally (81 percent) and through external
providers (38 percent)—and are more likely to provide this training through a program coordinated within
their industry. Almost three-quarters of racers said they worked with educational institutions on areas like
curriculum design or on ensuring that instructors have relevant industry experience. They also reached out to
youth, doing so by using new media and working with youth-oriented organizations, for example.
And the push seems to be working. Racers are more likely than the other two segments to say that their
efforts are effective: 69 percent said they face no challenges in recruiting the talent they require.

43

44

Exhibit 15

Exhibit 16

Employer and education provider perspectives on skill
importance and competence

Perception gaps of youth skill competence

Competence
Importance

Employer and provider perspectives on youth

skills1
Employer and provider misalignment on youth competence1

% of respondents responding 8 or higher out of 10
Employer rating of
competence and
importance

Provider rating of
competence and
importance

Work ethic

65

80

70

83

Teamwork

65

79

69

81

Local language2

65

Oral communications

55

Hands-on training in discipline

54

73
73
69

73

77

65

81

69

79

Problem solving

46

66

63

79

Written communications

49

64

63

81

Creativity

50

63

Computer literacy

53

63

62

Theoretical training in discipline

50

Basic math

49

60

59

Leadership

45

58

57

English proficiency2

40

63

53

72

69
69

55

81
73
71
67

Difference between employer and provider Difference between employer and provider
competence rating; country average
competence rating; Germany country example
Difference
within Germany
28

Mexico

26

Brazil
14

Morocco
United States

12

India

11

Turkey

11
8

Saudi Arabia
Germany

0

United Kingdom -1

Theoretical training in discipline

15

Hands-on training in discipline

13
7

Work ethic
3

Problem solving

2

Computer literacy
0

English proficiency
Written communications

-1

Creativity

-2

Basic math

-4

Local language proficiency

-5

Oral communications

-5
-6

Teamwork
Leadership

-13

73

1 Please rate how competent new hires are on average on a scale of 0 to 10, where 0 means not competent at all
on this aspect and 10 means extremely competent on this aspect. Please rate how important these skills are for
new hires to have in order to be effective at your company. We will again use a scale of 0 to 10, where 0 means
not important at all in order to be effective and 10 means extremely important in order to be effective.
2 Local language was only asked outside US and UK, and English proficiency was asked in all countries even
when language of business was not English.

1 Please rate how competent new hires are on average on a scale of 0 to 10, where 0 means not competent at all
on this aspect and 10 means extremely competent on this aspect.

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

relevant to their field of study (Exhibit 18), with
25 percent finding interim work—jobs that are
unrelated to their field of study and that the youth
plan to leave quickly. The interim figure is higher
in Brazil, India, Mexico, and Turkey than in the
developed economies surveyed (Exhibit 19).
Although not equivalent, our survey finding on
the interim job ratio is similar to that found by
other polls seeking to identify underemployment.
The Gallup poll, for example, found an
underemployment ratio of 26 percent across 143
countries and areas.14
Examining the findings about interim employment
is revealing, because individuals working in such
jobs—in addition to those who are unemployed—
are the most dissatisfied. They are more likely to
be younger men; they tell us that they also have

lower incomes. Almost 40 percent of those who
do not progress beyond the secondary level find
themselves in interim jobs.

The employer perspective
While many youth cannot find a quality job, many
employers cannot find the right people to fill the
jobs that exist (Exhibit 20). Midsize employers
(those with 50 to 500 employees) said that they had
13 entry-level openings on average; large employers
had 27.
Across the surveyed countries, nearly four in
ten employers who had vacancies reported
that a driving reason behind these vacancies
remaining unfilled is the lack of the right skills in
new graduates (Exhibit 21). This is particularly

Education to employment: Designing a system that works
A congested highway

45

Exhibit 17

Exhibit 18

How young people prefer to learn
Use of hands-on learning in
academic and vocational
institutions2
% of respondents indicating a
majority of hours spent in
learning methodology

Relation between first job and field of study and
length of time to find a relevant next job2
% of respondents
Have not yet
secured a
relevant job

29

1+ years

23

6-12 months

18

3-6 months

13

Less than
3 months

16

55

46

Seminars

Traditional lecture

The difficulty of cracking the job market: 25% of those
employed full time took interim work as a first job

30

24

College grad
Vocational
or some college

Secured job
before
graduation

28

Unrelated to
field of study
but happy and
no plans to move

20

Interim job
unrelated to
field of study

25

1 Now I’m going to read out a number of different instructional techniques. I want you to rate how effective each
technique is for your learning, using a 11-point scale, where 0 means the technique is not at all effective and 10
means the technique is very effective. If you have not been exposed to this technique, please respond “no
exposure.”
2 On average, how much time did you spend in your academic program engaged in practical, hands-on learning
versus theoretical learning? Please think about this in the context of every 10 hours you spent learning and
indicate how many of those hours were practical (e.g., on-the-job training, simulations, etc.) and how many were
theoretical (in the classroom).

1 Following completion of your education program, how long did it take to get a job after you started looking?
2 Was this job: (select one response: related to my field of study, an interim job unrelated to my field of study until I
found more suitable work, unrelated to my field of study, but I'm happy at this job and don’t plan to move).

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

Among working youth, only
55 percent landed in a job relevant
to their field of study, with 25 percent
finding interim work–jobs that are
unrelated to their field of study and
that youth plan to leave quickly.

46

Education to employment: Designing a system that works
A congested highway

47

Exhibit 20

Exhibit 19
Emerging markets tend to have a higher share of youth
in interim jobs

Relation between job and field of study1
% of respondents

Companies of all sizes, sectors, and geographies leave positions
unfilled1
Average number of
vacancies by
company size

Average number of
vacancies by country
for large employers

Average number of vacancies
by sector for large employers

Company size

Country

Sector (100+ respondents)

Large
(500+
employees)

Related to field
of study

40
52

Unrelated to
field of study
but happy and
no plans to move

Interim job
unrelated to
field of study

A significant number of unfilled entry level jobs exist

52

51

55

55

60

58

68

13

39

Mexico

18

22

22

23

20

23
17

35

India

30

Brazil

27

Medium
(50-499
employees)
Small
(Under 50
employees)

21

22

22

20

19

15

Turkey Germany United Morocco United Saudi
Kingdom
States Arabia

27

13

3

India

36

Brazil

32

United
Kingdom

31

Germany

28

Mexico

24

United
States

21

Saudi
Arabia

12

Turkey

11

Morocco

9

Financial
intermediation

40

Real estate,
renting, and
business activities

38

Wholesale and
retail trade

26

Health and
social work

25

Manufacturing

25

Education

23

Transport,
storage, and
communications

20

Construction

1 Was this job: (select one response: related to my field of study, an interim job unrelated to my field of study until I
found more suitable work, unrelated to my field of study but I'm happy at this job and don’t plan to move).

1 Roughly how many vacant full-time entry-level jobs does your company currently have?

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

pronounced in Turkey (56 percent), India (53
percent), and Brazil (48 percent), although it
remains surprisingly high in all countries apart
from Morocco (where vacancies are lowest).
For most employers, not being able to find the
right candidates is a significant issue, to the
point that 70 percent of employers state they
would pay significantly more to get qualified
employees (Exhibit 22). The obvious follow-on
question, which bears further research, is whether
employers follow through on this intention and
actually do pay more to attract the talent they
seek, and, if not, what gets in the way. The actual
likelihood of higher salaries clearly involves a
broader range of factors, such as employer ability
to pay and the degree of skills scarcity in the
industry.

Employers report that new-hire training is widely
provided. More than 90 percent said that they
train new workers in job-specific skills, and 84
percent train for general skills that graduates may
not have. Training lasts, on average, 20 days. Our
interviews, however, indicate that these figures
may be inflated, as companies do not always
distinguish between days spent in orientation
versus skills training. Morocco, Saudi Arabia, and
Turkey show significantly lower levels of training
(Exhibit 23).

The education-provider perspective
Educators typically are not held accountable
for employment outcomes, so it is no wonder
that they do not have a clear view of the third
intersection (finding a job). But our results should

13

48

a car
maker

Education to employment: Designing a system that works
A congested highway

49

Exhibit 21

Across the
surveyed
countries,
nearly four in
ten employers
who had
vacancies
report that
one reason
for these
vacancies is
a lack of the
right skills
in new
graduates.

39% of employers say a skills shortage is a leading
reason for entry-level vacancies
Lack of skills is a common reason for entry-level vacancies
% of employer respondents

56

36% of employers also reported a
lack of skills caused “significant
problems in terms of cost, quality,
and time” or worse

53
48

45
40

38

39%
32

30

12

Turkey

India

Brazil

United Mexico Saudi Germany United Morocco
Kingdom
States
Arabia

SOURCE: McKinsey survey, Aug-Sept 2012

50

give serious pause: a third of educators surveyed
could not estimate the percentage of their graduates
who found jobs, and many of those who did offer
a guess got it wrong. Three-quarters of providers,
for instance, believed that most of their graduates
found work in three months or less (Exhibit 24), a
far more optimistic outcome than that reported by
young people.
In a sense, it is not surprising that providers
know relatively little about what happens to their
graduates; they have many other matters to attend
to. When we asked educators to identify their
priorities, the results were telling: helping students
find employment fell to the middle of the list,
coming in sixth out of ten issues (Exhibit 25).
(The results were similar in this regard for both
private and public education providers.)
This does not necessarily mean that their priorities
are skewed; maintaining an excellent curriculum
and increasing completion rates surely matters.
Nor does it mean that providers are not assisting
students: the young people we spoke with often
sought employment-related support from their
school, including information about wages, job
prospects, resume preparation, interview guidance,
and making connections with companies. Of the
education providers surveyed, two-thirds said they
offered such services (although only half the youth
in our survey were aware of it).
What the results imply is that educators could pay
more attention to what is for many students a key
priority of pursuing education—getting a good job.
Far too many of the providers we spoke with did not
understand how they could contribute to improving
the current education-to-employment system, or
even see it as part of their role. They need to begin to
figure this out, or they will lose their most important
constituency—the young.
Too many of the young people we spoke to doubted
the value of their education. In the short term,
that can translate into discouragement and
disengagement. In the long term, if young people
do not believe that education will deliver returns,

Only half of youth
surveyed believe
that their
postsecondary
education had
improved their
chances of
securing
employment.

Education to employment: Designing a system that works
A congested highway

a doctor

51

52

Exhibit 23

Exhibit 22
The training premium

Training of entry level workers

Employers who would pay more for the right talent1

Companies with new hire training

% of respondents

% of respondents

United
States

Construction

79

82

Health and
social Work

79

81

Financial
intermediation

78

86

India
Germany
Brazil

80

Turkey

72

Mexico

72

United
Kingdom
Saudi
Arabia
Morocco

67
54
41

Manufacturing

72

Real estate,
renting, and
business activities

71

Education

69

% who train1

Brazil

97

Mexico

97

United
Kingdom

96

India

93

United
States

93

Hotels and
restaurants

63

Wholesale and
retail trade

62

Agriculture, hunting,
Forestry, and fishing

62

Morocco

Transport, storage,
and communications

59

Saudi
Arabia

Ø 70

Turkey

Ø 70

Average number of days2

19
12
26
31
18

90

Germany

23

68

19

64
41

Companies of all sizes
state that they would pay
an extra 22% on average

23
7

Ø 82

1 If you found a candidate with the right hands-on experience, training, and practical knowledge of the position,
would you pay them more than a candidate that has not received relevant training?

1 Does your company provide training for new hires?
2 On average, how many days of training does a new hire receive in the first year?

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

Ø 20

Education to employment: Designing a system that works
A congested highway

53

Exhibit 25

Exhibit 24
On average, a third of educational providers are unable
to estimate job-placement rates; those who did
estimated optimistically
Provider perspective on job-placement rates and length of time to
find a job1
% of respondents able to estimate
their graduates’ placement rates

India

78

22

54

United
States

29

71

Mexico

30

70

Saudi
Arabia

33

67

Turkey

38

62

Germany

39

61

United
Kingdom
Morocco

% who
find
jobs in
under
3 months

Provider
Youth
respondents’ respondents
estimate2’
who found
jobs

54

46
75

Ranked by % of respondents responding 8 or higher out of 10
Public
open
access

74

83

17

Educational-provider priorities rank1

% of respondents

No
Able to
estimate estimate
Brazil

Linking students to employment opportunities is a
middle priority for education providers

25

Public
selective

Private
for profit

Private
not for
profit

Maintaining a relevant, upto-date curriculum

1

2

3

1

Attracting students

2

3

1

3

Attracting and retaining
faculty/instructors

3

1

4

2

Increasing graduation and
completion rates

4

5

6

4

Developing partnerships with
companies

5

4

8

7

Helping students/graduates
find employment

6

7

5

5

Partnering with other
education institutions

7

6

7

8

Generating sufficient
revenues

8

9

2

6

Reducing costs/increasing
cost-effectiveness

9

10

9

9

10

7

10

10

Supporting research
1 On average, what percentage of graduates from your institution find employment within 3 months of program
completion?
2 74% of employers said that over half of their graduates found jobs within 3 months, as compared with 54% of
youth who did find jobs who said it took them 3 months .

1 Below is a list of services that some programs provide for students. Please indicate “yes” or “no” as to whether
or not your post-high-school institution had this service.

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

A third of educators surveyed
could not estimate the percentage
of their graduates who found jobs,
and many of those who did offer
a guess got it wrong.

54

Exhibit 26

Exhibit 27

Only half of youth believe that their post-secondary
studies improved their employment opportunities

Most who attend vocational programs are unconvinced
that they made the right decision to attend their
particular institution

Students who believe their postsecondary studies improved their
employment opportunities1

Disagree

% of respondents

% of respondents

Saudi
Arabia

60

Private not
for profit

56

Brazil

59

Private
for profit

54

20

70

23

34

69

68

13
32

16

Ø 50
College
grad

Vocational

33

34

46

48

25

58

49
35

47

55
38

37

23

48
44

40
Ø 50
Ø 50

Turkey

Some
college/AA

55

42

54

United Kingdom

United
Kingdom

70

India

44

21

69

Mexico

United
States

13

18

Germany

44

47

33

76

United States

Morocco

47

23

79

Brazil

Turkey

46

55

Saudi Arabia

51

51

% of vocational respondents

Morocco

Mexico

Public open
access

65

Vocational

53

% of respondents

Some
college/AA

Germany

Choosing the same institution1

College grad

54

India

Public
selective

Neutral

1 My post-high-school education improved my chances of getting a job.

1 Knowing what I do now about the job market, I would make the same education choice (institution and field of
study) that I had made previously.

SOURCE: McKinsey survey, Aug-Sept 2012

SOURCE: McKinsey survey, Aug-Sept 2012

economic as well as intellectual, they are not
going to pay for it. It is in the interest of providers
themselves, then, to do more to help.

who studied in vocational paths were less likely
to believe that their education improved their job
prospects.

For example, only half of the youth surveyed believe
that their postsecondary education had improved
their chances of securing employment (Exhibit 26).
Those who studied at private institutions were only
marginally more likely to state that their education
improved their employment opportunities, as well
as those who studied at higher education levels.

1.4 Trouble ahead: Unclogging the highway

Large percentages of young people in all types of
educational institutions question whether they
made the right choice. Among those who attended
vocational schools, for example, 23 percent said
that, in hindsight, they did not choose the right
place; an additional 42 percent were unsure
(Exhibit 27). This reinforces the finding that those

In all nine of the countries we studied, the road from
education to employment is under constant repair.
Signs are missing and the traffic is heavy. Drivers
tend to concentrate on the patch of pavement ahead,
not on the long haul. The result, as our segmentation
shows, is that only a small fraction of young people
and employers reach their destination in a reasonably
efficient manner.
The situation is not hopeless. Not only do many
educators and employers accept that they need to
be part of the solution, but many also have proved
distinctly ingenious in filling in some of the potholes.
It is to these innovations that we now turn.

Education to employment: Designing a system that works
A congested highway

a nurse

55

56

chapter two
Learning by example:
Stories of success

58

»

Although the education-to-employment
highway operates in conditions that are
far from ideal, ingenious and motivated
drivers have devised strategies that make
it work. We found 100 of them across 25
countries.1 Their stories form the basis of
this chapter.

Education to employment: Designing a system that works
Learning by example: Stories of success

»

We have seen inspiring and effective education-to-employment solutions at work around
the world, driven by governments, educational institutions, industry associations, individual
companies, and nongovernmental organizations (NGOs). Some come from the developed world,
others from emerging economies. Some are costly while others deliver results for as little as
$100 a student. Despite this diversity, these initiatives share one key attribute that is crucial to
their success at improving outcomes: education providers and employers step actively into
each other’s worlds, interacting intensively, often on a near-daily basis. For example, employers
may help shape the curriculum and offer their employees as faculty, while providers can provide
workplace-simulation environments for learning.
In the most innovative programs that we observed, employers and education providers approach the
three critical intersections (enrolling in postsecondary education, building skills, and finding a job) not
as a linear sequence of steps but rather as an interdependent continuum where finding a job can precede
enrollment. In this chapter, we will discuss how these innovative solutions work at each point.

2.1 Enrollment
There are two key questions that define the front end of the education-to-employment problem: How can
education and training be made more appealing and accessible to the young? And how can providers,
governments, and employers encourage more students to take and finish the right courses to prepare
them for where the jobs are?
The examples below explore real-world approaches that address these questions.

2.1.1 Get the information out
As discussed in Chapter 2, young people don’t start or finish further education for two main reasons—
they cannot afford to (“too poor to study”) or they don’t see the point (“too cool to study”). Even among
those who do, many are uninformed about their choices and end up regretting them. Their highway to the
future is poorly marked, leaving them unaware of the various professional paths open to them, or how
their economic standing might be improved by taking them.
To overcome this, the best programs make intensive and continuous efforts to engage young people and
to provide them with the facts about what particular careers entail and how programs can help. To the
extent that ignorance acts as a stop sign to youthful ambition—and a big one at that—information is the
way to blow through it.
There are two steps:
Create a base of information: The first step is to develop detailed and comprehensive information
about various occupations. While this information will benefit all youth, (as well as providers and
employers), it will be of particular interest to the 26 percent of youth that are “struggling to get ahead” but
are not well informed about career or educational choices. The collection of reliable, comprehensive data
about job opportunities, wages, and training can help youth who are striving to get ahead to make the
right choices.

59

60

The United Kingdom’s National Career Service
is a centralized repository of labor-market
information published by the UK Commission
on Education and Skills and the Sector Skills
Councils. The Web site features comprehensive
job profiles with information on salaries, hours
required, qualifications, industry trends, and
training programs.2 The National Careers Service
provides career counseling over the phone or in
person. Since its launch in April 2012, the Web
site has rung up more than a million visits and
enabled 270,000 face-to-face sessions and 50,000
phone conversations. Users record an 85 percent
satisfaction rate on average.3
The Colombia Labor Observatory, set up in 2005,
provides a similar service, but its contents are
more detailed, including details on the graduation
and employment rates of every education provider
in the country. Young people can view this
information at the national, regional, state, and
city level. There is a longitudinal dimension to this
data, meaning that the trajectory of students is
tracked over time (whether they went on to further
training, which institution they attended, what
they studied, when they found employment,
what their starting salaries were, and so on.)
So a teenager in Medellin could look up, say, the
economics course at the local university and get
an idea of the fates of those who went before.
Usage has more than quadrupled since the launch,
with 190,000 unique visits to the Web site in
2012, and the government is working to increase
awareness of the site and to improve the Web site
interface to increase traffic. 4
Find your audience: Making these kinds of
facts and figures available is only the start; after
all, anyone with an Internet connection can find
multi-gigabytes of data with a few mouse clicks.
Information can help the “struggling” youth
segment that cares about educational and career
options but is not well informed; but something
different is required to engage the “disengaged”
youth segment, which is not only uninformed
but doesn’t care enough to look for information.
(See the Youth Segmentation box in Chapter 2.)

The most successful examples of engaging the
disengaged were achieved by aggressively pushing
information not only to young people but also
to their families and friends.
One way to do this is to embed career planning into
the school curriculum, thus challenging students
to think about their academic, personal, and career
goals while still at secondary school. In Norway
and Japan, career-guidance courses are formally
scheduled into the school day. The Swiss system
is especially thorough. In the canton of Bern,
for instance, career counseling and lessons are
mandatory for all students between the seventh
and ninth year (ages 12 to 15). Students learn about
various occupations—their typical working hours
and wages, as well as academic and vocational
training paths. They also visit companies
and prepare for interviews, which can lead to
internships. Parents are strongly encouraged to
take part in the process, including attending a
special introductory meeting designed to increase
their awareness of various career opportunities.
Translators are available so that immigrant parents
can participate.5
India’s Pratham Institute for Literacy Education
and Vocational Training, an NGO, is a good
example of how to push information in a context
where formal structures are lacking. Outreach
workers go door-to-door in villages to speak to
youth and their parents about the opportunities
on offer with blue-chip companies such as the Taj
Hotels and Larsen & Toubro, and about the
long-term benefits that further training could
bring. Pratham also engages community leaders—
from village elders to local officials—to secure
their support as advocates in order to encourage
youth to enter Pratham-run training programs.
Begun in 2006, there are now five such programs.
They have trained over 10,000 young people so
far, most of them disadvantaged and lacking in
formal education. The employment rate for its
most successful courses, like hospitality and
construction, is close to 100 percent.6

Education to employment: Designing a system that works
Learning by example: Stories of success

But how do
we change
students’–and
parents’–views
of vocational
training? We
change them by
switching the
subject from
academic versus
vocational to the
opportunities of
professions as
a whole.

61

2.1.2 Addressing social perceptions
There’s no other way to say it: vocational training
lacks cachet. We have seen in Chapter 1 that while
the majority of youth believe that vocational
training is more helpful than an academic track
in finding employment, less than half of those
who find it more appealing actually enroll in
these programs. Reducing the stigma attached
to vocational tracks or professions would go
far toward matching young people to the right
occupations. As things stand, too many succumb to
the social pressure to go to college, even when they
don’t want to attend.
But how do we change students’—and parents’—
views of vocational training? We change them
by switching the subject from academic versus
vocational to the opportunities of professions as
a whole. There is a perception among many, for
example, that going to college is necessary to get a
good job with a good salary, or that skill-oriented
jobs lack long-term prospects. That is not so, and
this is the story that needs telling.
Siemens testifies to the difference such an
approach can make. In 2011, when the German
company opened a cutting-edge gas-turbine
facility in North Carolina, it realized it needed
workers with higher levels of skill and precision.
When Siemens began to try to recruit young
people, though, it found that the idea of working
in a factory—even a world-class one—was
not particularly popular, especially with the
parents. The company addressed this problem by
backtracking to the first intersection. It invited
high-school students to tour the plant with their
parents to get a firsthand impression. “Parents
who used to say ‘absolutely not’ change their minds
completely when they see [the facilities],” notes a
Siemens manager. “You see robots and lasers and
computers and realize it is advanced, modernday manufacturing, which completely changes
perceptions.”7
South Korea’s Meister Schools provide an
example of how the government can work to recast

62

a
fireman

Education to employment: Designing a system that works
Learning by example: Stories of success

63

64

vocational tracks as a path worth pursuing, even
in a culture that places extraordinarily high value
on academic achievements. (South Korea has one
of the highest university enrollment rates in the
world.)
Due to the strong bias against manual or technical
work, employers in Korea are struggling to find
talent for skilled trades. To attract more students
for these roles, the Korean government started
transforming a subset of existing vocational
schools into Meister Schools in 2010. (“Meister” is
German for “craftsman.”) The government pays
the students’ tuition, room, and board; the
students are referred to as “young meisters.” The
whole idea is to create a sense of status and address
the social stigma attached to manual or technical
work. While the schools are very new, the effort
seems to be beginning to work, with high demand
for each seat.
The Korean government was also careful to
position the Meister Schools as a first step toward
further education if this is what the student
wanted and needed, instead of being a one-time
credential that carried no further opportunity
for advancement. To that end, schools have also
been working with universities to ensure that
their vocational curriculum allows for a seamless
transition to a university academic pathway if so
desired.8 The Meister Schools are new, but they
do seem to be part of a real change taking place.
In 2009, 73 percent of vocational-high-school
graduates went on to college and only 19 percent
into employment; in 2012, 55 percent are pursuing
college while 33 percent have found a job.9

2.1.3 Making education affordable
While information can pique youth interest in
further education, cost still remains the numberone barrier. Among the youth surveyed, 31 percent
cite cost and 20 percent cite the need to work as the
reasons for not continuing their education.
Traditionally, the solution to this has been
simple: more money. Governments and education

providers have devised numerous ways to provide
additional funds for economically vulnerable
populations through scholarships and subsidies.
For example, the United Kingdom has made £3.6
billion available to its newly formed Skills Funding
Agency, with priority toward training young
adults, the low-skilled, and the unemployed.10 In
Australia, the National Workforce Development
Fund has been authorized to allocate $700 million
over the next five years toward training for priority
skills, to be co-invested with the private sector and
administered through the sector skills councils.11
India’s Pratham is an example of a provider
experimenting with ways to increase
postsecondary access for the poorest youth. In
“Learn now, pay later,” students pay 30 percent of
tuition during the duration of their course and the
rest in installments after they have secured a job
and started earning. Approximately 1,000 students
have chosen this option since it was introduced in
July 2011, and steady repayment from graduates is
in progress. In “Education for education,” Pratham
provides skills training to youth who volunteer in
its tutoring and mentoring programs for primaryschool students. Since April 2011, 60,000 youth
across 17 states have been trained in digital-literacy
skills. Buoyed by strong positive feedback from the
youth, Pratham expanded this training in 2012 to
include foundational employment attributes, such
as business language, English, and social skills.
Providers have also been experimenting with ways
to reduce their cost structure, from leveraging
technology to reduce the cost of expansion to hiring
less experienced teachers and providing them with
top-up training on the job. These measures will be
discussed in Chapter 3.
Spread the costs among stakeholders: By
involving employers in financing the training and
education of youth, we can allow more youth to
enroll in otherwise unaffordable programs, as well
as encourage employers to be more invested in the
subsequent intersections of building skills and
finding a job.

Education to employment: Designing a system that works
Learning by example: Stories of success

Employers are often cautious about investing in
training. Among their concerns: it’s not our job;
it costs too much; we train them and then people
leave for the competition. Even so, we found a
number of companies that have developed ways to
mitigate some of the risks and in the process build
a positive case for doing more. These companies
typically have a dire need for talent—whether
because of the highly specialized needs of the
work, the overall lack of talent in the region, and/
or the sheer volume of people needed. Moreover,
their corporate culture tends to value talent
development. “People ask us why we invest so
much to develop the skills of our people,” a Siemens
executive explained. “I ask them instead, ‘How
much is it going to cost you to not have skilled
workers?’”12 That’s a good question.
And that is the question that Egypt’s Americana
Group has been answering. When the restaurant,
food-processing, distribution, and retail company
recognized that it was not getting the talent
it needed, it joined up with the Ministries of
Education and Higher Education to train people
to work in their restaurants and food businesses.
Students spend up to half of their time working
(and earning wages) at Americana during the
program. Americana also pays for their tuition
and guarantees a position to graduates at the end
of the program. Given the dearth of skilled labor
in the region and the generally high turnover rate
in the industry, Americana says the program is
“absolutely worth it” because it provides them with
a steady pipeline of talent.13
Newport News Shipbuilding (NNS), a specialized
US shipbuilder, has done something similar
with The Apprentice School. Every year, around
250 apprentices are recruited from thousands
of applicants with a broad range of backgrounds
(high school, college, military, internal applicants)
to undergo training in 19 different trade programs
(pipe fitter, electrician, machinist, and so on) and
7 advanced programs. The programs are four to
five years in length. While they learn, students
work at the shipyard in Newport News, VA. Eighty
percent of The Apprentice School’s graduates are

65

still employed at NNS ten years after graduation
(even though they are not obligated to remain a
single day), and most stay for decades. Graduates
have also gone on to key leadership positions; they
account for 44 percent of the entire productionmanagement team, ranging from foreman to vice
president. That makes The Apprentice School a
huge cost saver for the company; by investing up
front in acquiring talent, it saves down the line on
expenses related to retraining and vacancies.14
Of course, for many employers, the costs may
appear greater than the benefits. In these cases,
sector-based collaborations and government
incentives may be required to lower the entry cost.
We discuss this in Chapter 3.

2.1.4 Getting students across the finish line
As we noted in the beginning of this chapter, the
issue is not only about getting students enrolled
but also about making sure they finish. While
better-informed decisions and financial support
will certainly help, there is more to do. It is possible
to identify youth who are particularly vulnerable
to dropping out, whether due to cost, lack of
motivation, lack of academic preparation, and
so on, and to provide the extra support they may
require.
Strong community-based and personalized
support: Year Up is a 12-month US program that
targets vulnerable low-income young adults.
Students spend the first half of the program
in hands-on classes to develop both hard and
soft skills, and the second half in a corporate
internship.
Year Up students are required to sign a “contract”
at the beginning of the program that spells out
in detail what is required in terms of conduct
and the consequences of nonadherence. This is
meant to mirror the professional expectations
in companies where Year Up students will intern
and later work. Adherence to these guidelines is
monitored through a system that costs students
a certain number of points for certain types of

66

automated dashboard that alerts the adviser
when any student pulls a risk trigger (for example,
missing classes, falling grades); this is designed
to help advisers manage their large caseload (each
adviser has approximately 300 students) and
enable them to intervene early and in a targeted
manner. The adviser can then work with the
student to deliver a tailored package of support,
encompassing a range of interventions from
remediation classes to counseling. Due to its
philosophy of “intrusive advising,” Miami Dade
The students are not alone on this journey:
has a graduation rate of 61 percent, which is
these high expectations are complemented by a
twice the national average, despite the high rate
tightly knit social network of support including
of disadvantaged youth that make up the Miami
peers, staff, professional mentors, social-service
Dade student population (87 percent minority, 72
professionals, and community-based partners.
percent deemed “not college ready,” and the highest
Students are clustered in groups (called “learning
communities”) of up to 40 to discuss their progress. number of Pell grantees, or those who are severely
economically disadvantaged, in the nation).18,19
These gather at least once a week, either to
celebrate success or to discuss how issues can be
addressed and what support can be offered.15
As these examples demonstrate, providers can
support youth in getting through programs by
providing effective support services. In response,
Eighty-four percent of Year Up’s graduates are
employed or attending college full-time within four governments should consider providing more
incentives to education providers to help their
months of completing the program, and employed
students complete their courses. One place to start
graduates earn an average of $15 an hour, the
is to build up information, for example, by tracking
equivalent to $30,000 a year.16 Referring to Year
Up, the Economic Mobility Corporation concluded dropout rates by demographic factors. As the
management mantra goes, “What gets measured
after an independent 2011 study that the program
gets managed.” Measuring dropout rates can be an
had “the most exciting evaluation results we’ve
incentive to reduce them. Again, these measures
seen in youth employment in 20 or 30 years, and
will be discussed further in Chapter 3.
the first to show a really substantial earnings
gain.”17
behaviors, such as tardiness or absence. Students
earn a stipend to help support themselves while
in the program, and this payment is tied to their
performance; a 15-point infraction results in a
$15 dollar deduction from that week’s paycheck.
If students run out of points, they are said to
have “fired themselves” from the program. The
transparency and clarity of this system helps hold
students accountable for their actions.

2.2 Building Skills

Large-scale monitoring and systematic
support: Year Up is a promising example of an
approach that works successfully with a vulnerable
population, but it is relatively small, with a cohort
of 1,360 students in 2011. Miami Dade College,
the largest campus-based community college in
the United States, with almost 175,000 students,
offers an example of how effective support may be
provided on a much larger scale.
All incoming students are assigned an academic
adviser who is responsible for supporting and
monitoring their progress. Similar to Year Up’s
point system, Miami Dade is developing an

After getting youth enrolled, providers and
employers must ensure that students are acquiring
the relevant skills. This requires creating and
delivering content that employers will value and
students can absorb.

2.2.1. Designing an effective curriculum
Intensive collaboration between industry and
providers to define required competencies
at a detailed level: The best way to define a
curriculum that is relevant in both achieving
educational outcomes and employer requirements

Education to employment: Designing a system that works
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67

The hard work of soft skills
One of the things we learned in our research
is how highly employers value “soft skills.”
But they are harder to define, distill, or
express. As such, we have struggled to find
good examples of training programs for soft
skills that are as precise or focused as the
technical modules found in the Automotive
Manufacturing Training and Education
Collective in the United States or the ones
found in the Technical and Further Education
system in Australia.
Part of the reason is that soft skills
encompass such a wide range of
concepts, from personal characteristics
(confidence, temperament, work ethic) to
social and cognitive skills (communications,
problem solving). As a result, the term means
different things to different people.
For example, when we spoke with
managers from a hospitality company
regarding their expectations of teamwork,
they told us the focus was on whether their
employees possessed tolerant attitudes
that are important in interacting with a wide
range of guests. Asked the same question,
an engineering executive singled out the
extent to which the employees were able to
work and think in cross-functional teams.
Same concept, same words, two very
different interpretations.
Providers and employers have improved
their capabilities when it comes to describing
technical tasks and competencies. It is time
they do the same for soft skills.

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is for employers and providers to work together
to figure out exactly what the curriculum should
cover. While many providers gather input and
feedback from employers, there are two keys
to success: First, there needs to be intensive
collaboration; second, both sides need to define
their requirements at a very nitty-gritty level
The Automotive Manufacturing Training and
Education Collective (AMTEC) offers an example
of how this can work. To develop the AMTEC
curriculum, high-performing technicians (not
managers) from several auto companies outlined
every task they performed and the competencies
required for each. They then ranked these based on
importance, developing a list of tasks common to
the dozens of companies involved over several
rounds of iterations. This was done for each specific
activity, leaving no room for confusion.
Here is part of the list for a task titled
“troubleshoot, repair/replace, brakes/clutches”:
• Inspect brakes for wear, leaks, damage, excessive
wear on pads, using common hand tools.
• Disassemble discs and pads using Vernier
calipers.
• Clean rotors using micrometer.
These steps are then supplemented by a set of
competencies required, defined across several
dimensions, such as calculations, communication,
technology, and safety. For example, calculations
cover “measure in decimals (thousandths),”
“metric-measurement conversion,” and “basic
math.”
Employers and providers in AMTEC worked
together to distill all this information into a
curriculum composed of 60 three-to-eight-week
study modules spanning 110 core competencies,
with each module focusing on specific skill sets.20.21
Thanks to the strong collaboration between
employers and providers and the detailed
materials, the AMTEC curriculum provides
great clarity. “We now know what to expect when
we get a résumé from someone from an AMTEC

curriculum,” notes a manager from Nissan.
“It’s a validation.” 22
Modular course design: Another interesting
feature of AMTEC’s curriculum is its modular
design, which gives students more flexibility in
combining, sequencing, or spreading out their
learning as required.
In the case of AMTEC, employers are able to run
assessments on their current employees to identify
exactly where the gaps are in their competencies,
and ask that the provider deliver the appropriate
modules for their employees. This makes for more
efficient and targeted employee training.
Another example is Australia’s vocational
education and training (VET) framework. As with
AMTEC, the Australian curriculum’s building
blocks are units of competency, which are defined
based on the expected tasks in a given job role.
Each VET qualification (for example, a certificate
or an associate’s degree) requires the completion
of a certain combination of competencies to
ensure that the learner can perform in the
chosen occupation. At the same time, training
organizations have long combined these units in
different ways to better meet the needs of their
clients, offering statements of attainment for the
completion of these short courses.
In 2009, the government formally made the
delivery of such skill sets—units of interrelated
competencies for a specific function—part of the
national training framework. This move toward
shorter modules aimed to increase the flexibility
and responsiveness of the training system to
reflect changes in industry. However, other
benefits have emerged, including providing
students with a stepping stone to larger
qualifications and providing opportunities
for existing employees to get a “skills top-up.”
The number of skill sets available has increased
rapidly from 178 in September 2009 to 924 in
June 2012.23

Education to employment: Designing a system that works
Learning by example: Stories of success

SME training
Many small and medium-size enterprises (SMEs) do not have the
resources and capabilities to invest in comprehensive training.
At the same time, they may struggle to find the right talent, due to
the relative lack of resources in identifying and recruiting skilled
people. It therefore makes sense to seek out third parties to help.
This approach has succeeded in several countries, notably Korea
and Morocco.
In South Korea, SMEs make up 99.9 percent of all enterprises
and 86.8 percent of all employees (12 million workers). 24 To boost
the quality and productivity of this workforce, the government
launched a program in 2001 that encourages large companies
to provide training to their SME partners, by subsidizing up to 80
percent of their costs.
SK Telecom has taken up this challenge and now provides
training to the SMEs in its value chain. This takes the form of
sharing its extensive eLearning library as well as more traditional
training courses that are designed according to specific requests
of the SMEs. The eLearning library includes task-focused training
modules as well as leadership, values, and functional training to
build work-related skills to a “master-level talent.” SK Telecom
has trained almost 210,000 people so far using this approach. The
company sees this as a worthwhile investment: its SME partners
are more productive, while communication and
goodwill have improved. 25
In Morocco, SMEs make up 93 percent of all registered
businesses, 46 percent of the workforce, and 38 percent of
GDP. 26 In 2005, the government’s “Emergence Program” named
the automotive industry as one of the seven priority sectors
designated to boost Morocco’s competitiveness in exports,
increase GDP by 50 billion dirhams ($5.7 billion), and create
more than 220,000 jobs. To develop the supplier base for the
automotive industry, the government encouraged Renault to set
up a plant in Morocco and established the Institute for Training
Automotive Professionals in 2011. The government provided the
initial capital investment while Renault developed the curriculum
and trained the faculty. The Moroccan government will subsidize
operating costs until 2014; after that date, the industry will pay.
The program will train Renault’s 6,000 employees until 2014, after
which point, it plans to expand its target to the 30,000 employees
of Renault’s 125 or so SME suppliers. 27

69

70

2.2.2 Delivering skills the right way
Once the necessary skills and competencies are
identified, the next challenge is for students to
learn them. Here again, employers and providers
must work together to deliver content in a way that
ensures that students are learning the right skills.
Providers stepping into the employers’ world:
“I hear and I forget. I see and I remember. I do and
I understand,” goes an old Chinese proverb. There
are many studies that conclude that hands-on
(or practicum-based) learning is effective. Young
people in our survey agreed: a majority said they
found hands-on learning the most useful mode of
instruction.
There are several ways that providers can create
hands-on learning experiences for their students.
Bring the classroom to the workplace: The most
common model is to place students in internship or
apprenticeship opportunities to acquire hands-on
experience on the job. Students spend a portion
of their time at the workplace, applying their
classroom learning in real-life situations. One of
the better-known examples is the German dual
system, where apprenticeships and schooling are
combined in the curriculum.
While there are varying degrees of how to make use
of these apprenticeship-type opportunities—from
externships of a few days to full apprenticeships
where students split their time between school
and the workplace—it is clear that the more time
students spend at the workplace, the more handson experience they acquire.
It is for this reason that programs like Americana
(discussed earlier) or Apprenticeship 2000 (see box
at the end of the chapter) make sure that students
spend considerable time (up to 50 percent) at the
employer site, applying their classroom learning
to real-life problems.
This model can, however, be difficult to implement
at scale and is largely dependent on how engaged

employers are. Providers can address this
issue by monitoring students’ experience and
building long-term relationships with committed
employers to ensure that students are exposed to
significant learning opportunities during their
apprenticeship.
Bring the workplace to the classroom:
Given the potential difficulties in setting up
large numbers of apprenticeship opportunities,
providers are also using physical simulations,
such as setting up a faux hotel (India) or creating a
startlingly realistic coal mine (Australia). This can
also be done through computer/digital simulations,
which immerse users in a virtual world to enable
the application of knowledge and skills, from
marine navigation (Australia) to business-process
optimization (United States).
At the TAFE Challenger Institute of Technology
in Perth, Australia, for example, there is a fully
functioning replica of a gas-processing plant
(minus the actual gas) to train students in plant
operations, while the TAFE Box Hill Institute
features a fully equipped hospital ward, including
an intensive-care unit with sophisticated
human dummies. At Nettur Technical Training
Foundation, a group of elite technical schools in
India, students working toward a new certificate
in cell-site maintenance get hands-on practice
with an actual working telecommunications tower
installed on campus.28
The cost of such facilities can be high, depending
on the industry and the setting required. The
use of computer simulations can thus be a good
alternative.
At the TAFE Sydney Institute, students use
computer-based marine simulators to learn
technical and practical skills for a variety of vessel
classes. The training facility can simulate most
ports in the world, as well as a wide variety of
sea and weather conditions. Students can do the
simulations individually or in teams, and their
performance is recorded to aid the learning process
through debriefing and for further evaluation.29

Education to employment: Designing a system that works
Learning by example: Stories of success

71

an
entrepreneur

72

Similarly, “serious games” (see Chapter 3 for
a further discussion) uses the technology of
computer and video games to simulate real-world
environments or processes that users would
encounter in their job. One such example is IBM’s
INNOV8, a serious game created to educate users
on business process management (BPM). INNOV8
was originally designed to help college students
understand how BPM affects an entire business
ecosystem. Within a few months of its release,
over 1,000 universities around the world had
downloaded the program—students found that the
ability to see how their choices unfolded (for better
or worse) brought their lessons to life in a way never
before possible. Its popularity prompted IBM to
release it as a training tool for IT and for other
corporations—including IBM’s own employees.30
Employers stepping into the providers’
world: Providers are not the only ones with
a responsibility or mandate to deliver skills;
employers can also step forward to ensure that
youth are learning the required skills.
Some employers, like Americana or the employers
in AMTEC, partner with education providers to
ensure that the content of the curriculum is aligned
with their needs. Others go one step further, taking
on the responsibility of providing training and
education themselves.
Wipro in India is an example of an employer
that has taken its in-house training program
to the next level. It hires university graduates
(approximately 13,500 in the 2012–13 recruiting
year), both with and without engineering degrees,
and prepares them to be programmers. The new
hires go through a three- to four-month training
period where they learn not only soft skills but also
general programming skills and specialized skills
closely related to about 60 specific technology
areas, such as Java for e-commerce. The training
program is closely linked with the operations of the
company, with the business side actively involved
in everything from curriculum development to
delivery of training to post-training mentorship
and monitoring to ensure that the new hires are
acquiring the skills that the business needs.31

Newport News Shipbuilding (NNS) is another such
example. Due to the difficulty in hiring people
with the specialized skills needed to work at the
shipyard, NNS decided to start its own school.
Operating continuously since 1919, The Apprentice
School trains promising apprentices to be leaders
throughout the organization. During their studies,
apprentices spend time each week in classes
studying the designed-for-purpose World Class
Shipbuilder Curriculum and the remainder of their
time in production in the shipyard, supervised by
craft instructors, each of whom is a graduate of
The Apprentice School. Apprentices earn a wage
for each hour in the classroom and in the shipyard.
Each trade in The Apprentice School is directly
linked to the relevant department in the shipyard;
every two years there is a formal program review of
each trade; daily collaboration helps troubleshoot
issues and implement changes as required.
The strong connections between program and
production ensure that NNS is building a fluid
pipeline of competent leaders and loyal employees
with operationally relevant skills.32

2.3. Finding a job
Searching for a first job is difficult; so is evaluating
the eager young people just setting out. Many of
them don’t know how to market themselves in a
credible manner. Job postings will often ask for
“quantitative skills” or “strong communications,”
but a diploma from a university often may not
effectively signal one’s analytical skills or writing
abilities. On the other hand, employers know that
educational history and a few interviews can only
tell so much, so they struggle too. At the end of the
day, both employers and job-seeking youth risk not
finding the right match.
There are ways, however, to improve the process.
One of them is more effective signaling, to allow
employers and youth to let each other know exactly
what each is looking for and what each can offer.
A second way is to build strong relationships
between employers and education providers so
that providers, who understand the strengths
and requirements of both parties, are able to

Education to employment: Designing a system that works
Learning by example: Stories of success

help “match” graduates to employers. The final
approach is to have employers be engaged much
earlier in the education-to-employment journey by
“prehiring” youth and influencing and sponsoring
their training, ensuring a much better fit by the
time the new hires start work.

2.3.1 Credible assessments and
certifications
Historically, the university, community college,
or polytechnic diploma has acted as a proxy
for qualification; having a degree implied the
possession of certain competencies. However,
because most diplomas are based on completing
a program that comprises many subjects and
competencies over a long period of time, it is
difficult for employers to identify exactly what
skills a graduate possesses. While a diploma
or degree still connotes a certain threshold of
academic training (as well as personal drive), there
is too much uncertainty and variance in outcomes.
Given this lack of clarity, a number of third-party
providers are emerging to provide independent
assessments. Countries like South Korea and the
United Kingdom are going in this direction, but the
movement has gone farthest in the United States.
One example is the WorkKeys® Assessment
System, founded by ACT, which is best known for
its college-admittance exam. WorkKeys is used
across the United States to measure the extent
to which an individual has the foundational
(and advanced) skills required for success
in the workplace. The assessments include
reading for information, business writing, and
applied mathematics, as well as soft skills such
as teamwork (“the extent to which individuals
choose behaviors that both lead toward the
accomplishment of work tasks and support the
relationships between team members”), “listening
for understanding” (“the ability to follow,
understand, and react to work-based processes”)
and “fit” (“personal interests and values”). In
addition, ACT has matched its assessment to the
level of skills needed to be successful in more

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than 18,000 different jobs. This helps employers
identify how a potential candidate may fit in a
particular position. Successful completion of
these tests leads to the National Career Readiness
Certificate (NCRC), guaranteeing to employers a
certain level of readiness and thus improving their
odds of hiring someone they will want to keep. As
one personnel officer put it, “It gives you the ability
to bring in the right people the first time.” To date,
40 states recognize the NCRC and one million
people have earned the qualification.33
The Mozilla Open Badges initiative is a more
radical and experimental effort to create an
alternative form of credentialing. As the creator of
the popular Firefox browser, Mozilla’s approach
is Web based. The premise of Open Badges is to
enable people to earn recognition for skills and
learning that take place online or outside a formal
setting, and then to display them on the Web. At
the same time, badge issuers (businesses, NGOs,
clubs, schools) can create tightly focused courses
of instruction and have complete control over
standards. Mozilla, for example, has created its
own badges for things like mastery of JavaScript.
Both issuers and recipients make use of a system
platform that is free and open to all. Launched
in June 2012, the initiative is attracting a good
deal of interest. The US Secretary of Education
called it a “game-changing strategy,” and the
MacArthur Foundation gave $2 million toward
its development. NASA and Disney have already
signed up as issuers. 34
The innovations discussed here are not definitive:
these examples are still works in progress, with
growing yet still irregular rates of acceptance.
What makes a credential credible is a nearuniversal acceptance within the community it
serves. As such, a proliferation of third-party
credentials without widespread acceptance
can create more confusion than clarity. What
is required, then, is to focus on one or two
credentialing systems, by function or industry,
recognized by all (or almost all) relevant
stakeholders. One model is the certification
process for accountants. To be certified, and

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The IL&FS way: Large-scale intervention in India
Over the last two decades, India’s economy has grown faster than its pool of skilled workers.
Business and government are worried that the gap between the demand for talent and the
supply of it will hobble development.
If India is to succeed in even approaching its stated goal of training 500 million skilled workers
in the next decade, it needs to identify effective interventions that can be scaled up massively,
rapidly, and affordably. Over the last few years, the country has seen a large number of for-profit
ventures enter this space—one of the more promising ventures, IL&FS Skills, is profiled here.
IL&FS Skills was founded in 2007 as a for-profit venture in skill development. In 2011, it
became one of approximately 50 private partners selected for support by the governmentfunded National Skill Development Corporation. It operates 18 skills schools (hubs) and 355
skills centers (spokes) in 24 states. These schools and centers offer instruction in 27 trades,
including textiles, welding, hospitality, and retail that are generally one to three months long.
IL&FS emphasizes serving youth from poor, rural areas and offers them a compelling value
proposition: finish the course and we have a job for you. IL&FS Skills starts by securing
commitments from more than 1,000 partner companies to provide job placements for trainees.
Then it works with local governments and nongovernmental organizations to enroll young
people, holding informational workshops all over the country. The organization goes to rural
villages (much like India’s Pratham in our previous section), to explain to young people the
benefits of IL&FS Skills training and the career prospects they can expect afterward. Given
that 21 percent of the Indian youth in our survey cited not seeing the value as the reason for not
enrolling in postsecondary training or education, this process helps ensure that youth actually
enroll in IL&FS courses and are trained with the skills that companies are demanding.
Because enrollment is tied to the number of job commitments, IL&FS trainees are guaranteed
a job after graduation, typically with a starting wage of around 5,000 rupees ($100) a month.
Once the young people decide to enroll, they undergo a series of selection assessments (for
vision, dexterity, mechanical aptitude, and so on). They are then assigned to courses, taught by
trainers who have at least four to five years of relevant industry experience. The curriculum is
created in cooperation with industry partners. Students live in dorms attached to the schools;
their training includes instruction in the life skills they will need if they migrate to cities to take
jobs. Each IL&FS trainee also undergoes mandatory training on foundation English and digital

Education to employment: Designing a system that works
Learning by example: Stories of success

literacy and leaves the IL&FS training center with a personal e-mail ID and the ability to book
his or her own train ticket online, for example.
IL&FS Skills courses also emphasize learning by doing. Classes are held in simulated
workplaces, such as a sewing factory (complete with shift sirens) or a hotel lobby, to help
students familiarize themselves with what might be entirely new environments.
To deliver high-quality, consistent information to large numbers of people across India, IL&FS
Skills has created a proprietary technology, K-Yan—a sort of combination projector/computer
that uses multimedia forms to deliver training (in English and six regional languages). Anyone
watching the content can follow along with minimal human intervention. For example,
a module on how to attach a central processing unit (CPU) to a computer motherboard
shows two images, one of the entire motherboard and one that zooms into the part of the
motherboard where the CPU is to be installed. Then the K-Yan program takes the student
through the process in small steps, such as “relax the clip by gently sliding it outward” or
“lift the flap on the socket.” The segments are easy to follow, and students can view them
repeatedly and learn at their own speed.
With the support of K-Yan, IL&FS faculty—who all have industry experience—are able to teach
classes with only minimal training in pedagogical skills. As a result, a month-long course at
IL&FS Skills costs about one and a half to two times the expected starting salary per student.
(Additional funding support is also sourced by IL&FS, by tapping into corporate-socialresponsibility funds, philanthropy funds, and government and employer sponsorships for
those who need it.) As a result, IL&FS has gotten very big, very fast: in 2012 alone, it has trained
100,000 young people. (Note, however, that India’s goal is 500 million.)
IL&FS Skills operates along the entire education-to-employment highway—and then beyond.
Not only does it start with the engagement of employers, it ends by monitoring graduates. For
at least a year after leaving, student performance is watched and measured.35
IL&FS Skills offers an example of a provider that is highly proactive across all three
intersections with end-to-end management for its students.
As IL&FS continues to scale up, maintaining its early indicators of quality and impact
will be a priority.

Screenshots from a K-Yan computer technician course

75

76

Apprenticeship 2000: Europe comes to North Carolina
In the mid-1990s, two German companies, Blum (hardware) and Daetwyler (high-precision
machines) wanted to secure a pipeline of employees with the specialized skills their North
Carolina factories needed. Specifically, the two companies were looking for people trained
in mechatronics, a multidisciplinary field that combines the understanding of mechanical,
electronic, computer and systems, and software engineering. Due to the sophisticated nature
of their skills requirements, the two companies worked with the Central Piedmont Community
College (CPCC) in Charlotte to create a European-style apprenticeship program, but with a
distinctly American pitch: “ Free college and a paycheck!”
Students who complete the program are trained as skilled machinists, tool-and-die makers,
injection-molding specialists, and technicians. They earn both an associate’s degree (in
manufacturing technology) as well as a journeymen’s certificate. They get paid $9 an hour
while studying and are guaranteed a job when they finish. Over the years, six more companies
that share the need for these skills have joined the consortium. These eight companies, which
are not competitors, agree to a common curriculum, recruit as a group, and promise not to
poach employees.
The selection process is rigorous. Interested students are first screened for academic
aptitude and behavior; those who make it through are invited to an open house (with their
parents) where they tour the factory and learn more about the program. Applicants then go
through four more days of testing, and those who are admitted are matched to a company.
Last year, 68 students started the process, and 12 were selected.

“The most important criterion when selecting
candidates is, ‘Are you able to learn?’”
CPCC worked with the eight companies and the North Carolina Department of Labor to
create a curriculum that met company needs and state standards. Apprentices spend about
half their time in school and half on the plant floor, working with a designated mentor.
The course takes about 8,000 hours to complete and costs employers up to $175,000 per
graduate. That’s comparable to a degree from a private four-year university, but due to
the sophistication of the skills required, the companies believe the investment is worth it.
Siemens, one of the coalition members, estimates that a wrong cut by a machinist can easily
cost $250,000.36

“We are convinced they [the apprentices] are going to
be the smartest employees we are going to have”
Apprenticeship 2000 is a small, specialized program. Nonetheless, it has already attracted
interest among other players that want to replicate its model.

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Learning by example: Stories of success

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a welder

Education to employment: Designing a system that works
Learning by example: Stories of success

therefore work as a certified public accountant
(CPA), individuals must pass the Uniform CPA
Exam, which is designed by the American Institute
of CPAs. The CPA exam is accepted by practitioners,
end users (corporations and government), and
regulators as the standard for the whole profession.

2.3.2 Matchmaking
Relationship-based hiring: In a number of
cases, education providers can create such strong
relationships—and credibility—with employers
that they can be practically certain all its
graduates will find work.
In Japan, many companies recruit directly from
the KOSEN schools. These hybrid high schools/
colleges serve about 50,000 math- and scienceoriented students who like building gadgets.
Students start at KOSEN schools at age 15 and get
workplace internships in addition to hands-on and
academic training. Due to the excellent reputation
KOSEN graduates have earned, employers actively
recruit them. KOSEN reports that graduates have
15 to 20 job postings to which they can apply.
KOSENs generally have strong and often longstanding relationships with local employers, and
faculty members help match students with the
right companies. Once a good match is identified,
the school writes a letter of recommendation, and
after a round of assessments and interviews, the
employment is secured.37
Niche skills brokers: There are also discrete
populations of job seekers that need additional
support in bridging the gap between building skills
and finding a job. In these instances, different
programs and services have emerged to fill specific
niches in the matchmaking process.
Orion, a recruiting firm in the United States,
specializes in translating the skills acquired by
US military veterans into terms recognized by
industry. Working with Siemens, Orion helped to
increase the number of veterans hired from 100
to 200 a year to 500 in 2011.38 In Saudi Arabia,
Glowork matches talented women with companies

79

willing to employ them. Glowork found that larger
companies were not hiring women because they
didn’t know how to find them and were worried
about incurring additional costs due to segregation
laws in the workplace. Glowork bridged both
these gaps, first, by offering an online platform
for female job seekers to connect with employers,
and second, by providing an IT solution that
enabled businesses to employ and monitor female
employees working from their homes. Glowork
has successfully placed about 6,000 women and
is working with the Ministry of Labor to provide
support to the 1.2 million female unemploymentbenefits recipients.39

2.3.3 Treating the intersections as
one continuum
Some of the most promising and interesting
programs cross the entire education-toemployment highway: rather than treating
enrollment, building skills, and finding a job as
discrete and sequential, they engage across all
three intersections. In these cases, finding a job
precedes enrollment: Providers will guarantee
their students a job, and employers will “prehire”
youth and oversee—and even sponsor—their
education, offering a full-time position at the
end of it. By treating the three intersections as an
interdependent continuum, employers are able
to ensure that young people are equipped with
the right types of skills and youth have some sort
of guarantee that the education they receive will
be relevant and valuable at the workplace. In
addition, both parties will have the assurance that
they are the right fit for each other by the time the
young job applicant starts work.
China Vocational Training Holdings (CVTH)
is the largest training institute for China’s
automotive industry; it has a 60 percent market
share nationally and up to 80 percent in key
provinces. CVTH is an example of a provider that
promises job placements and matches graduates
to jobs. Its Department for Employment cultivates
and maintains relationships with about 1,800
employers, which provide internship placements

80

as well as “promises to hire.” CVTH maintains
a database of employers with details such as the
size of the company, demand requirements (how
many workers they need, type of worker required),
and location and updates these details on a
monthly basis. Prior to graduation, CVTH surveys
students on their ideal job placement (for example,
location, type of work, type of factory) and matches
the students’ preference on the basis of this
information. CVTH also provides postgraduation
support to students for a year in the event that
students find they are not happy with their initial
placement. Three months after graduation, the
employment rate is 80 percent, and CVTH records
suggest that those who have yet to secure a job
typically go on to pursue further education or have
changed industries. 40
Employers can also take the initiative, prehiring
youth and not only paying for their training but
guaranteeing them a job at the end of it. This
approach is typically seen in instances where there
is an acute skills shortage, for example, when the
required skills are so specialized that the employer
needs to lock in talent or when employers need
to find a high volume of talent in a short period
of time. In the best cases, employers also engage
early on with youth to cultivate their interest. Both
Newport News Shipbuilding and the Americana
Group are examples of such an approach. (See
“Apprenticeship 2000” in box at the end of the
chapter for another example.)
Another is Go for Gold in South Africa. Formed in
1999 as a public-private partnership between the
Western Cape Education Department, Neil Muller
Construction (now NMC Construction Group),
and the Amy Biehl Foundation, Go for Gold is
designed to attract applicants from disadvantaged
communities for entry into the construction,
building-services, and engineering fields.
The program begins by identifying promising
students in grade 11 (the second-to-last year of
secondary school). These young people are given
tutoring and training during their last two years of
secondary school in areas such as math, science,

and general life skills. But before enrolling in
university, they are assigned to one of the 20 or
so participating companies to gain a year of paid
work experience; this is to test their interest and
suitability for a career in the industry.
The company can then choose to sponsor them
through college and guarantee them employment
after graduation. Throughout the entire program,
mentoring ensures that participants are guided,
monitored, and assisted in making informed
decisions about their career and their future.
Companies participate not only because it is
regarded as a good form of corporate social
responsibility but also because it is a great way
to recruit. “Because of the way [the] program’s
run, and the values that we instill in these young
people,” explains the director of the program,
companies “know that it is a good investment.” So
far, 360 students have gone through the program,
and almost two-thirds are still working in the
industry. 41
What all these examples show is that it is possible
to build a sturdy bridge between secondary school
and employment. To do so, however, requires a
high degree of trust and cooperation. Education
providers need to prove that they can deliver
on workers’ business needs. Employers need to
work with providers to create the right training.
Students need to step up and get the qualifications
that the business community wants.
And then they all need to find one another.

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Learning by example: Stories of success

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a surgeon

82

chapter three
creating a new system

84

»

As the previous chapter demonstrated,
there are pockets of excellence around the
world that are changing the way youth,
education providers, and employers
negotiate the education-to-employment
highway. Unfortunately, these success
stories are the exceptions, not the norm.
To correct this, the current system’s
underlying structures and incentives
need to change. There are two priorities:
creating more successes and scaling them
up to serve the millions of youth who need
them.

Education to employment: Designing a system that works
Creating a new system

»

In every success story discussed in Chapter 2, the different stakeholders interacted intensively
and frequently. They also went well beyond their traditional areas of activity: employers got
involved in education, and educators played a bigger role in employment. Some also simplified
the journey by packaging training with the guarantee of a job upon graduation, or even by
prehiring trainees. The problem, though, is that there isn’t much incentive for stakeholders to
pursue such innovations; as a result, excellence is very much the exception.
Here’s another problem: no single stakeholder has an informed perspective on the entire education-toemployment system. While young people have the most to gain, they are poorly informed and not in a
position to develop solutions. Providers and employers are better equipped but tend to focus only on their
stretch of road. Employers have a simple priority: recruit the best candidates. They naturally focus on the
third intersection (finding a job) and engage little on what youth decide to study (the first intersection)
or on what skills they acquire (the second). Education providers are mostly concerned with the first two
intersections—attracting students to their programs and delivering high-quality instruction. Work
placement is a lower priority.
At the moment, it takes extraordinary investment, innovation, and leadership to move the needle. The
need is to establish practices and principles that can make success routine. We want every stakeholder
to have a stake in the success of the others and for them to meet one another, without colliding, at all
three intersections. For this to happen, there needs to be a completely new system of education-toemployment—not an improved version of today’s fragmented model.

3.1 Improving the odds of success
The most active and imaginative educators and employers are creating solutions despite systemic
weaknesses. We expect them to continue to do so, but that will not be enough. Three interventions
are required to get more and better innovation:
• collect and disseminate data to educate stakeholders, build transparency, and manage
performance
• initiate more sector-wide collaborations to build industry consensus and share costs of
improving education and training
• create an education-to-employment “system integrator” that coordinates, catalyzes, and
monitors activity
Let’s look at each of these in turn.

3.1.1 Intervention 1: Collect and disseminate data
Transformation requires good information. Consider the revolution in data collection, reporting, and
analysis that started with the OECD’s Program for International Student Assessment (PISA) in 2000.
The breadth and depth of information collected through PISA allowed countries to benchmark their
performance against one another and to understand which interventions were successful in raising
student outcomes. PISA made it clear which countries were succeeding—and why.
Education-to-employment systems lack PISA-quality data.1 Fewer than half of youth surveyed said they
had the right information to decide whether to pursue further education or understand what programs

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86

offered the best economic returns. What is needed
is data that can be used to educate stakeholders,
build transparency, and manage performance.
Collect, package, and push good information
about career options and training pathways:
Young people need to be able to make informed
choices about their career and education. In some
cases, this may simply be a matter of aggregating
data that already exist but are scattered among
different sites. In the United States, Economic
Modeling Specialists International has developed
a Web-based program, Career Coach, that
aggregates data from 90 federal, state, and private
data sources, including the Department of Labor,
the Census Bureau, and Indeed.com (a job-listings
site). This database can provide timely information
on local employment (job seekers can set a search
radius) such as current and projected job openings,
estimated earnings, and specific educational
programs that will prepare an individual for
a given occupation. Education providers can
purchase access for their students to this database
on a subscription basis.2
In most cases, the data required must be collected
from scratch and built up. This was the case
in Colombia when the Ministry of Education
established its Labor Observatory for Education
in 2005. The ministry started by tracking student
movements over time—where they went to pursue
their postsecondary education, what qualification
they graduated with, where they obtained their
first job, and so on.
Seven years on, those bits of data have become
important metrics. Users can look up employment
rates by qualifications, programs, and cities; they
can also compare the performance of different
institutions by graduation rates, employment, and
salaries.
While these data are creating transparency that
students in particular benefit from, more can be
done. A ministry official noted, “Right now, the way
we assess labor supply and demand is by making
inferences. If starting wages for a particular field

Fewer than half
of youth surveyed
said they had the
right information
to decide
whether to pursue
further education
or what programs
offered the best
economic returns.
What is needed is
data that can be
used to educate
stakeholders, build
transparency,
and manage
performance.

Education to employment: Designing a system that works
Creating a new system

look unusually low, and we see that there are a lot
of recent graduates, then we suspect that we have
a problem of oversupply. Ideally, we [will] have
a macroeconomic model that can predict labor
demand so that we avoid the problem completely.
That’s the next step for us.”3
Define what solutions work: Many providers and
employers told us that they struggle to understand
what interventions make a difference in improving
student learning outcomes.
To combat this, in South Korea, the government
established in 1997 the Korean Research Institute
for Vocational Education and Training (KRIVET)
to conduct research on national human-resourcedevelopment policies, labor-market trends,
and vocational education and training (VET).
KRIVET is also charged with disseminating this
information to those who can use it. KRIVET
regularly publishes working papers that evaluate
the impact of various VET programs and highlight
practices developed by education providers around
the country.

87

graduates about six months after graduation.
The Graduate Employment Survey collects
information on employment status (unemployed,
employed full-time, employed part-time), and
salary. This information is published to assist
prospective students in making informed
decisions about both the institution and course
they are interested in. Enterprising providers who
perform well on this survey use it as a marketing
tool (noting, for example, that “graduates from our
school have the highest starting salary of any other
comparable institution”).5
The Australian government also requires
all higher-education institutions to collect
information on their graduates’ employment
activities four months after course completion.
What is interesting about Australia’s experience
is that this information has been folded into the
country’s independent university rating, the
Good Universities Guide, which has created a
five-star rating system based on three graduate
outcome metrics: success in getting a job, graduate
starting salary, and “positive graduate outcomes”
(based on the proportion of graduates getting
a job or enrolling in further study). By making
graduate outcomes one of the metrics that youth
are encouraged to consider when picking a course
or institution, education providers have greater
incentive to pay more attention to the third
intersection, finding a job.

KRIVET has also been an instrumental player in
the rollout of the Meister Schools, a new network
of high-quality vocational schools, providing them
with detailed guidance. KRIVET published a 265page instruction manual on how to open a Meister
School. This provides step-by-step instructions,
case studies, and templates on how to define the
skills required, develop textbooks and student
3.1.2 Intervention 2: Initiate more
assessments, and create extracurricular activities. 4 sector-wide collaborations
Nonprofits and think tanks can also be helpful. In
the United States, for example, the Aspen Institute,
Lumina Foundation, and the Gates Foundation
are investing heavily in the study of interventions
to figure out what works (and what doesn’t), then
spreading awareness through publications and
annual “best practice” awards.

Almost half of employers surveyed said they
did not work with providers on matters such as
curriculum design and teacher training. Even
among those who did, partnerships are decidedly
limited; only a minority report getting in touch
as often as once a month. That is not enough:
experience shows that the odds of success greatly
improve when such interactions are frequent and
Develop metrics that encourage accountability intense.
for labor-market outcomes: In Singapore,
the Ministry of Education requires education
The most transformative partnerships we have
providers to conduct an annual survey of their
seen involve multiple providers and employers at

88

The most transformative
partnerships we have seen involve
multiple providers and employers
at a sector level. Such sector-based
collaborations are critical not only
to create widespread industry
recognition for the curriculum but
also to enable delivery of training
in a more cost-effective manner.
a sector level. Such sector-based collaborations
are critical not only to create widespread industry
recognition for the curriculum but also to enable
delivery of training in a more cost-effective
manner.
AMTEC, for example, began in 2005 as a loose
coalition of providers led by the Kentucky
Community and Technical College System and
employers (auto-industry companies) that met
to discuss common training challenges and
solutions. The program also received a grant
from the National Science Foundation to fund a
central office. AMTEC really gained momentum,
however, when Toyota opened its training facility
and curriculum to competitors, and then defined
and shared the 170 tasks that the Japanese auto
company required its line workers to master.
Why would Toyota do this? Because it believed that
the talent shortage was dire enough to warrant an

industry-wide solution. Other automotive-related
manufacturers agreed and joined the initiative.
Together, they narrowed down the 170 tasks in an
iterative process designed to build trust and buyin. The process ended in a curriculum of 110 core
competencies. This is about to be rolled out in 2013
as the industry standard.
As AMTEC has grown, it also has formalized
expectations of all provider and industry members
so that there is no ambiguity about what the
partnership entails. For example, industry
members are expected to support career-pathway
development and outreach activities conducted
by their local community-college partner and to
prioritize hiring qualified AMTEC participants.
For their part, the providers are expected to share
information on best practices and performance
with one another through participation in annual
workshops. AMTEC also requires employers or
providers to join as a pair to ensure that the tight

Education to employment: Designing a system that works
Creating a new system

linkage between demand for labor and the capacity
to supply it is maintained.6
Apprenticeship 2000, another industry-led
coalition, has a longer track record. It was founded
by two German companies, Blum (hardware) and
Daetwyler (high-precision machines), and now has
eight members. As in AMTEC, the leadership of
the founding companies was critical to getting the
coalition off the ground. However, unlike AMTEC,
members of Apprenticeship 2000 had to commit
to covering the cost of training and wages over
the 3.5-year period—to a value of about $175,000
per apprentice. (AMTEC employers can decide
whether to sponsor students through the training
program.) Given the significant costs, participants
needed to believe there would be a return on their
investment. The coalition solved this by having all
members sign a no-poaching agreement. It also
set up a matching system to allocate trainees to
companies; applicants rank companies in order of
preference, and the selection committee, made up
of representatives from all companies, adheres to
these preferences as closely as possible.

3.1.3 Intervention 3: Create an educationto-employment system integrator
It’s hard to know where you’re going if you can’t
see the road, and in the case of education-toemployment, no one has a good view of the whole
journey. Governments come closest; even there,
though, multiple departments (such as labor,
industry, and education) often have overlapping
responsibilities and visions, making coordination
impossible.
In India, for example, 20 different federal
ministries and agencies are responsible for
skill development. The Ministry of Labor and
Employment oversees industrial and vocational
training institutes. The Ministry of Micro,
Small, and Medium Enterprises oversees
entrepreneurship programs. The Ministry
of Human Resource Development is leading
efforts to integrate conventional and vocational
education tracks. The government has also set up

89

the National Skill Development Corporation to
promote private-sector-led skill development and
to oversee the Sector Skill Councils in 21 priority
sectors. Then there are state governments, which
have their own programs.7
The more complex the web of stakeholders,
the more difficult it is to see how the system is
functioning. Getting such a perspective is critical;
that is why we believe there should be a system
integrator. Responsibilities should include the
following:
• coordinating and integrating all activity, from
R&D to the implementation of solutions
• c atalyzing stakeholder action in priority areas
• monitoring and managing the quality of
outcomes
Given the nature of these functions, public entities
are best positioned to fill this role. The complexity
of the labor and training markets in any given
country may necessitate several integrators, one
for each minisystem, whether this is defined by
sector, region, or target population. Some countries
are moving toward the creation of such integrators,
although the exact form (and therefore the scope)
of the entity varies.
Four examples show how a system integrator
can work.
Integrator for the unemployed: Germany’s
Federal Employment Agency:
The Federal Employment Agency (FEA) is
Germany’s (and Europe’s) largest public entity,
with more than 1,000 offices and 115,000
employees. FEA delivers services to the country’s
2.9 million unemployed. As a self-governing
institution, it acts independently (albeit within a
legislative framework).8
FEA has two primary responsibilities: to manage
the unemployment-benefits program and to
provide services, ranging from career counseling
and job placements to funding for retraining. All
of these services are administered by the FEA’s
network of branch offices, with the exception of the

90

benefit program for the long-term unemployed,
which is administered in partnership with local
municipalities. Under FEA’s stewardship, the
number of unemployed individuals fell from
4.5 million in 2004 to 2.9 million in 2011, and the
average period of unemployment declined from
164 days to 136 days.9
FEA’s focus is finding solutions to help the
unemployed reenter the labor market and
monitoring outcomes for the unemployed. Its
research institute conducts studies on workforce
requirements and development.
Integrator for the private sector: National Skill
Development Corporation, India:
Founded in 2009, the mandate of the National Skill
Development Corporation (NSDC) is to accelerate
private-sector involvement in skill development.
NSDC has a unique funding and governance
structure. First, it is set up as a nonprofit company
and therefore subject to all the professional
aspects of governance of a company; second, it is
a public-private partnership—49 percent of the
equity of this nonprofit company is owned by the
central government and 51 percent by industry
associations.
The government’s goal is to deliver training to
500 million people by 2022; NSDC is supposed
to find initiatives that meet 30 percent of that
goal. Through the provision of seed funding, it
encourages the creation of large, private training
programs that both meet the needs of the industry
and leverage collaborative partnerships. This
seed funding has enabled the emergence of a large
number of for-profit skill-development entities. As
of March 31, 2012, it had disbursed $25 million to
organizations that have trained more than 181,000
people.10 At least 50 new for-profit entities with
significant aspirations have entered this space,
which earlier was largely seen as government or
nonprofit territory. NSDC’s partner-selection
process, while still being tweaked, is also starting
to serve as a first filter for other investors.

The NSDC has also been charged with establishing
Sector Skill Councils (SSCs) in 21 priority areas in
order to develop national occupational standards
and accreditation schemes, as well as support
services such as faculty training and labor-market
intelligence. NSDC provides seed funding for the
SSCs, but it also acts as a convener and facilitator
to bring key players to the table. To date, NSDC has
approved the setup of 16 councils, 5 of which have
begun operations.
It is too early to know what effect the NSDC will
have. The SSCs are in very early stages, and many
of NSDC’s partner organizations are grappling
with challenges as they get started. What is clear,
however, is that the NSDC is generating a level of
entrepreneurial activity and industry-provider
dialogue that never before existed. As a next step,
NSDC is seeking to build links with relevant federal
and state agencies. In 2012, for example, NSDC
commissioned several state-specific skill-gap
studies, and it has been working with the Office
of the Adviser to the National Council on Skill
Development (the apex body chaired by the prime
minister) to create an online monitoring system
for the entire vocational and educational training
system (public and private).11
Integrator for a single sector: Prominp:
The Brazilian Oil and Gas Industry Mobilization
Program (Prominp), created in 2003, is a coalition
of government agencies, private companies,
industry associations, and unions. The members
include the ministers of mining and energy and of
development, industry, and international trade;
the presidents of Petrobras, the largest oil company
in Brazil, and the Brazilian National Development
Bank; the Brazilian Institute for Petroleum; and
the general director of the National Organization
of Industry.
Prominp’s objective is to improve the operations of
the country’s oil and gas industry; to do so, it has
identified three main activities:
• Identifying talent requirements. Prominp
details how many people, with what skills, will be
required when and where in the industry across

Education to employment: Designing a system that works
Creating a new system

Brazil. It does this by analyzing the five-year
pipeline of projects in the industry, and then
breaks down the demand by skill profile, as well
as by geography and timeline.
• Coordinating curriculum development.
Prominp canvasses big companies in each field
to identify specific skill requirements down to
the level of specific activities. Then it identifies a
provider with a strong track record for each field
to work with selected companies in developing a
curriculum.
• Overseeing training. Prominp ensures that
providers are offering appropriate programs
according to talent demands by region. It also
sponsors about 30,000 students a year to go
through the programs. As a result, Prominp
qualified 90,000 people by the end of 2012, in
185 different professional categories, from the
basic level to graduate level, involving around 80
educational institutions.
Prominp has what most systems don’t: an
overarching, long-term perspective of the
industry’s labor needs by region and skill. It then
coordinates the creation of the right supply to meet
this demand.12
Integrator for the entire system: Australian
Workforce and Productivity Agency:
The Australian Workforce and Productivity
Agency (AWPA) was established in July 2012
to drive greater collaboration among industry,
providers, and government on all workforcedevelopment issues. While technically the newest
system integrator profiled in this section, AWPA
replaced and expanded upon Skills Australia, set
up in 2008 to provide independent advice to the
government on workforce planning and industry
skill requirements.
Skills Australia was widely respected and did
important research on skills and training.
But the government had been hearing from
different stakeholders that they needed better
collaboration mechanisms and tighter linkages

91

between skill funding and industry needs.
AWPA, then, embraced not only Skills Australia’s
responsibilities but also took on new roles in
funding and coordination. AWPA focuses on
several key functions:
• It administers a new National Workforce
Development Fund to deliver training for
high-priority industries and occupations.
• It develops and monitors workforcedevelopment plans in conjunction with
the 11 Industry Skills Councils. There was
previously no entity formally responsible
for playing this role.
• It conducts research on current and emerging
skill requirements across all sectors.
• It provides independent advice to government
and other entities—for example, AWPA is in the
process of developing a national workforcedevelopment strategy due by the end of 2012.
AWPA’s expanded mandate is designed to give
it better oversight of the entire education-toemployment system. Because it is so new, however,
it is too soon to say how it is doing.13
These four examples highlight the different
forms that system integrators may take. It may
not be necessary to have a single national system
integrator; multiple integrators can also work, as
long as the entity for the microsystems (Prominp,
NSDC, FEA) connects with its counterparts in the
broader system.

3.2 Scaling up success
As discussed in Chapter 1, education-toemployment programs must expand from serving
hundreds or thousands to hundreds of thousands
and millions of youth. Given that affordability is
a major barrier to entry for youth, such scaling
must also occur in a cost-effective manner. Our
conversations with providers and employers
suggest that there are three primary barriers to
increasing scale and maintaining affordability; a
system can face any or all of these:
• constraints on provider resources, such
as money or the lack of qualified faculty

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a hotel
manager

Education to employment: Designing a system that works
Creating a new system

• difficulty in providing sufficient hands-on
learning opportunities
• hesitation among employers about investing
in training unless it is for specialized skills

3.2.1. Constraints on education-provider
resources
Providers sometimes struggle to scale up
operations due to internal resource constraints.
The availability of teaching talent may be low
or variable, for instance, or the cost of physical
expansion at existing or new locations may be high.
This situation is compounded when the provider
operates in an environment where affordability is a
major concern for students.
Overcoming these barriers requires a solution
that is not only low cost but that also ensures a
consistent level of quality. Technology is beginning
to provide some answers. Education providers
are innovating through the use of a highly
standardized curriculum that is disseminated
using nontraditional delivery channels, such as the
Internet, television, and radio.
India’s IL&FS Skills has managed to distribute
standardized content at a low cost and in rural
areas where broadband connections are not
the norm. Videotaped skill-based modules are
used extensively in the classroom to provide
students with step-by-step instructions on how to
complete specific tasks—how to install a CPU in
the motherboard of a computer, say, or how to sew
a specific stitch. While there is a human trainer
present in every classroom to answer questions
and monitor practical work, the lesson content is
delivered entirely through these video modules.
In this manner, IL&FS can make sure that every
one of its 100,000 trainees in 2012 at every one of
its 350 plus locations spread across India learned
the same content, regardless of the aptitude of the
trainers and without sophisticated technological
infrastructure.14
The massive open online course (MOOC)
movement that is sweeping the higher-education

93

landscape is a more radical example of how
content can be disseminated widely. Udacity is
a private, for-profit US startup that offers free,
online computer-science courses taught by leading
faculty (typically from top tier institutions).
Lectures are delivered via short videos (each
lasting about five minutes), with quizzes following
each video to test absorption of content. Within a
few weeks of opening its first class, “Introduction
to Artificial Intelligence,” 160,000 students from
190 countries had signed up. Disseminating these
classes online allows Udacity and other MOOCs
such as Coursera and EdX to deliver the same
content to hundreds of thousands of students from
almost every country in the world at a minimal
cost.
IL&FS Skills and Udacity offer two ways of getting
around a shortage of teaching talent. In the case
of IL&FS Skills, the use of prerecorded content
ensures consistent quality. For Udacity, the need
for only one lecturer means that the provider can
afford to hire the best. In both cases, the marginal
cost per additional user is relatively low since the
primary cost lies in the up-front development
of the content and technological platform. (The
up-front cost can, however, be quite steep.)
This model offers another advantage: speed.
Due to the standardized content and relatively
low cost, expansion is relatively quick and easy,
and in some cases it transcends geographical
boundaries. It only took a few weeks for Udacity to
get 160,000 students enrolled in 190 countries—a
reach unimaginable in most operating models. It
is important to note that such solutions are most
useful in contexts where employers require a
predominantly standard set of skills.15

3.2.2 Difficulty in securing sufficient
hands-on learning opportunities
Successful programs that provide intensive
practical or workplace-based training, such as
high-quality apprenticeships, have found that this
particular dimension can be difficult to scale up.
This is due to the cost of building multiple physical

94

simulation sites or the difficulty in securing
sufficient placements from local employers.
One way forward could be through greater use
of “serious games,” also known as immersive
learning simulations, game-based learning, or
gaming simulations. As mentioned in Chapter
2, serious games enable users to apply their
knowledge and skills in complex, real-world
scenarios. Depending on the design of the game,
they create opportunities for interactivity, for
example, through multi-user gameplay, and for
personalization, as the game responds to actions
by the user and even learns from them, making
subsequent rounds tougher. Advancements in
technology also mean that today’s games can
integrate real-time data, creating the potential to
use such games not just as a training tool but also as
a means to solve real-world problems or even
to optimize costly processes. Examples include
Fold-It, a Defense Advanced Research Projects
Agency-funded project out of the University of
Washington.
The serious-games industry is still nascent,
although it has been growing rapidly worldwide;
sales reached €1.5 billion in in 2010 and are
projected to increase by almost seven times by
2015.16 Market intelligence from Apply Group
suggests that up to 135 of global Fortune 500
companies will have adopted games for learning
purposes by the end of 2012.17
As with the industry itself, research on serious
games is relatively new. One of the more recent
meta studies (from the University of Colorado
Denver Business School in 2010) found that, on
average, workers trained using serious games
(as opposed to formal classroom or Web-based
tutorials) retained 9 percent more information,
had 11 percent higher factual-knowledge levels,
and 14 percent higher skill-based-knowledge
levels. The study also found a fair amount of
variance in impact depending on the design of
the game and how it was used. Games that enable
trainees to access the games as many times as they
desire and that actively teach content (versus just

testing for content learned elsewhere) tend to yield
better results. A study of a game on electrostatics
(Supercharged!), for example, found that students
who were taught primarily using the game showed
an understanding of the concepts that was two to
five times better after the lesson than for students
who were taught primarily via interactive lectures
and classroom demonstrations.18
Critically, development costs, once a major
barrier, are coming down. Many examples of
sophisticated serious games for military use had
development costs in the millions. However, costs
have been falling, due to the availability of new
tools such as authoring platforms, templates,
and graphics libraries. Industry players suggest
that good skills training games can be developed
at a cost of $50,000 to $500,000, depending on
the complexity of the design and the extent of
customization.19,20
Virtual simulations could scale up relatively
quickly and inexpensively, as long as the need for
scale, such as a platform to support hundreds, if not
thousands of users simultaneously, is built into the
design from the start. (Any changes to the design
parameters, for example, changing game genre
from First Person Shooter to Real-time Strategy
after the framework has been built would also drive
up costs). If these conditions are met, however,
then the return on investment could be significant.
“There is an up-front investment to develop and
launch the game,” an IBM senior manager notes,
“but once we have that in place, we can train
thousands of people to a consistent quality level
and with a speed that we never could before.”21
As prices drop, serious games could offer providers
a way to scale up the tough-to-provide, down-toearth training that students want. The future of
hands-on learning may be hands-off.

3.2.3 Hesitation among employers about
investing in training
The third major barrier is that employers tend to
be willing to invest only in those specialized skills

Education to employment: Designing a system that works
Creating a new system

an
engineer

95

96

an
architect

Education to employment: Designing a system that works
Creating a new system

whose value they can fully capture. They worry,
understandably, about investing in training only to
see their improved employee take his or her skills
elsewhere. Employers therefore prefer the idea of
training youth on specific equipment in their own
facilities. For providers, the obvious reciprocal
concern revolves around cost: it is expensive with
regard to time, faculty resources, and funds to
develop customized solutions that meet the needs
of every employer.
One solution we have seen is for education
providers to deliver a core curriculum that is
standardized across all employers in a given
industry; then, an elective or “top up” curriculum
is tailored to the needs of the specific employer or
local labor market.
TAFE, the government vocational education
provider in Australia, is one such example. All
TAFE institutions use a national curriculum
known as a “training package” that is developed
collaboratively with industry. In recognition of
the breadth of skills and competencies that are
required in any single industry, each curriculum
is divided into core and elective modules. While
every TAFE program must cover the core modules
set out in the training package, each institute has
flexibility over which electives to offer. At TAFE
Sydney Institute, for example, the faculty of the
hospitality division worked with the largest fivestar hoteliers in the city to map the competencies
that were part of the core curriculum against
the needs of the hotels. The faculty then selected
its set of elective modules based on where there
were outstanding gaps in training requirements.
This ensured that the institute was training local
students in the skills deemed most important by
area hotels. As a result, TAFE Sydney Institute
increased the employment rate of its students at
these top hotels, while enabling the hotels to reduce
the amount of time spent on training.22
Similarly, AMTEC allows providers to
customize content to meet the needs of local auto
manufacturers. AMTEC has created a curriculum
composed of about 60 modules covering 110

97

common competencies required across the
different employers. Employers can choose to have
their employees undertake training from providers
in all 110 competencies or focus on a specific set
of modules. Some employers also deliver top-up
training themselves for additional competencies
they feel are unique to their circumstances.23
This use of a common core, combined with tailored
electives, enables providers to offer customized
solutions that do not break the bank. This approach
does, however, depend on having a set
of common skills to teach.
As a whole, today’s education-to-employment
systems lack the frequency and scale required
to support youth effectively. We cannot afford
tomorrow’s approach to be more of the same.
Einstein reportedly defined insanity as “doing
the same thing over and over again and expecting
different results.” It would be crazy to keep doing
what we do, knowing what we know about costs,
failures, and limitations. We need a new system,
not patches on the current one.
This report has sought to improve the quality of
knowledge on moving young people from education
to employment and to examine why high levels of
youth unemployment coexist with significant skill
shortages. We know we have left many questions
unanswered, but we hope our work will stimulate
others to continue the investigation of this crucial
topic.
We also hope that this report will help to rouse
stakeholders to take collective action to address the
challenges we have identified. Today’s youth—and
tomorrow’s—deserve better.

98

Endnotes
Introduction
disciplines offered at the institution, and the
1 “NEET rates among youth in OECD countries:
number of available jobs in the disciplines offered
Percentage of population aged 15–24, 2007
at the institution.
Q1–2011 Q1,” OECD Employment Outlook 2012,
9 Within our surveyed countries where data are
Organisation for Economic Co-operation and
available, the postsecondary gross enrollment
Development (OECD), 2012.
rate ranges from a low of 35 percent in Mexico to
2 Jenny Marlar,“Global unemployment at 8% in
a high of 90 percent in the United Kingdom. (See
2011,” Gallup, April 2012.
OECD, Education at a Glance 2012.)
3 OECD, Divided We Stand: Why Inequality
10 “Economic news release,” US Bureau of Labor
Keeps Rising, 2011.
Statistics, February 2012.
4 OECD, Messages from PISA 2000, 2004.
11 Gallup, 2012.
12 Hanan Morsy, “Scarred generation,”
Chapter 1
International Monetary Fund, Finance &
1 Where data scales from 0 to 10 are used, a
Development, Volume 49, Number 1, March 2012.
score of 8 or higher is considered significant
13 Hiring factors include field of study, degree
or “agree.” Where agree-disagree scales are
type (vocational/skills, bachelor’s), candidate’s
used, “agree” includes strongly agree and
previous work experience/on-the-job training/
agree, “neutral” includes somewhat agree and
competency-based certificates (quantity and/
somewhat disagree, and “disagree” includes
or depth), prestige/reputation of education
disagree and strongly disagree.
institution, candidate’s academic standing,
2 NEETs—Young People Not in Employment,
candidate’s recommendations or references,
Education, or Training: Characteristics, Costs,
and candidate’s in-person presentation.
and Policy Responses in Europe, European
14 Gallup, 2012.
Foundation for the Improvement of Living and
Working Conditions (Eurofound), 2012.
Chapter 2
3 OECD, OECD Employment Outlook 2012.
1 We have identified cases based on
4 Pedro Carneiro et al., “Estimating marginal
recommendations and referrals from researchers
returns to education,” American Economic
and donor agencies in the field as well as
Review, October 2012, Volume 101, Number 6,
industry leaders. We then assessed these cases to
pp. 2754–81.
determine the degree of innovation (for example,
5 OECD, Measuring Innovation, 2010.
creative and intensive collaboration across
6 Aysit Tansel, Changing Returns to Education
multiple parties) and outcomes (for example,
for Men and Women in a Developing Country:
attracting larger numbers of youth, ensuring
Turkey, 1994–2005, Middle East Technical
higher employment rates, and so on) and have
University and Institute for the Study of Labor,
tried to showcase examples that span multiple
March 2010.
geographies and industry sectors. We have
7 OECD, Education at a Glance 2012: “OECD
visited and interviewed most of the cases cited in
Indicators,” 2012.
Chapters 2 and 3 and have verified their impact
8 Factors for institution selection include prestige
using both internal and external sources.
of the institute, qualification/program type,
2 National Careers Service
proximity to home/family, friends going to
(nationalcareersservice.direct.gov.uk).
the same institution, family opinions, cost of
3 National Careers Service Media Toolkit,
program, the ability to study my chosen field,
September 2012.
the institution’s job-placement rates,
4 Colombia Labor Observatory, Ministry of
schoolteacher/principal advice, the ability to
Education, interview with manager, Bogotá,
work while studying, the duration of the offered
Colombia, October 2012.
program, the average wages of jobs in the
5 Canton Bern, (gef.be.ch).

20 Mayo, Merrilea, “Bringing Game-based
Learning to Scale: the Business Challenges of
Serious Games,” 2010, nationalacademies.org
21 IBM, interviews with worldwide learning
innovation practice leader and serious-games
program manager, October and November 2012
22 TAFE, interview with director, international
engagement and business development, TAFE
Directors Australia and manager, international
marketing, TAFE NSW, Sydney, Australia,
September 2012.
23 A MTEC, interview with executive director,
November 2012.

Education to employment: Designing a system that works
Endnotes

a diver

101

102

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104

Appendices
A. Country youth unemployment rates
Five of the countries in our survey are part of the OECD, which regularly reports on youth unemployment
(Exhibit 1). Additional youth-unemployment data for non-OECD countries were gathered through a
broader search. The data indicate that due to the financial crisis and the related economic slowdown,
youth unemployment rose in 2009 in most countries. The rate has generally stayed higher than pre-2009
figures in all countries except Germany.

B. Survey methodology
The survey consisted of three parallel questionnaires to youth, education providers, and employers,
administered from August to September 2012 in nine countries: Brazil, Germany, India, Mexico,
Morocco, Saudi Arabia, Turkey, the United Kingdom, and the United States. The survey was conducted
to build an empirical fact base across stakeholders in the education-to-employment space. The nine
countries were chosen to provide a diverse set of geographies, labor markets, and educational contexts.
They represent nearly 40 percent of global GDP (IMF 2011) and 30 percent of the world’s population.
The target sample size for each country was 500 youth, 300 employers, and 100 providers (totaling 4,500
youth, 2,700 employers, and 900 providers across the nine countries). While McKinsey designed the
three questionnaires, we commissioned Lieberman Research Worldwide to recruit participants and
administer the survey in all nine countries.
In questions regarding agreement with a given statement, participants were asked to choose one of
six options, which were classified for the report as follows: agree (“strongly agree” or “agree”); neutral
(“somewhat agree” or “somewhat disagree”); and disagree (“disagree” or “strongly disagree”). In
questions where respondents were asked to rate an ability or characteristics, such as competence or
importance, 11-point scales were given to participants, where 0 indicated “not at all” and 10 represented
“extremely”; scores of 8 or higher were interpreted as belief or agreement.

Youth survey
At least 500 youth were surveyed in each country, resulting in 4,656 youth in total, including
oversampling (Exhibit 2). Eligible youth participants for the survey were defined as young people aged 15
to 29 who were either (a) in the labor force or (b) currently studying and would be looking for work in six
months. Youth were recruited both in public settings and online.
Youth were distributed across five education levels in relatively equal proportions: less than high school,
high school, vocational, some college or associates degrees, and college/university degrees. Self-reported
income was also assessed, with the majority of youth (62 percent) assessing themselves at “about the
national average” and only 12 percent indicating they were above it.
The sample was then weighted for each country toward the gender and age distribution for the
economically active population of 15-to-29-year-olds in each country, according to the latest statistics
from the International Labour Organization (Exhibit 3). The weight of any one response was capped at a
minimum of 0.3 and maximum of 3.0.

1 Brazil, India, Morocco, and Saudi Arabia are not part of the OECD, and so there is not a single data source for them as there is for the other countries.
1

Source: OECD; Web search

Exhibit 2

Youth survey sample (1/2)

Country

Highest education level achieved1

Self-assessed family income level2

% of respondents
n = 4,656

% of respondents
n = 4,656

% of respondents
n = 4,656

Brazil
Germany
India
Mexico

517
500
524

United Kingdom

500
510
511
500
508

United States

586

Morocco
Saudi Arabia
Turkey

Vocational
18
Some college/
16
associate’s
degree

14

Less than
high-school
completion

College
graduate
or higher

Below average

28

24
Completed
high school

Above average

26

12

62 About
average

As much of the sample has
education beyond high school,
above-average-income youth are
likely “down rating” into the
about-average category rather
than being undersampled
1 What is the highest level of education you have completed?
2 Roughly where do you think your family’s annual income falls relative to the national average?
Source: McKinsey survey, Aug–Sept 2012

106

Exhibit 3

Youth survey sample (2/2)

Employment status1

Gender

Age

% of respondents
n = 4,656

% of respondents
n = 4,656

% of respondents
n = 4,656

Employed full-time
Unemployed

Male
30

55

63

15–18 years

12

16

19–22 years

29

25

23–25 years

28

23

26–29 years

31

36

38

18

Female

13

Will be looking for
full-time
job in 6 months

45

37

Employed part-time

Survey Econ.
active
population

Survey Econ.
active
population

Demographic factors such as gender
and age are weighted to be more
representative of the economically
active population
1 Which of the following best describes your employment status? (Figures may not sum, because of rounding).
Source: International Labour Organization; McKinsey survey, Aug–Sept 2012

Exhibit 4

Employer survey sample
Country

Sector1

% of respondents
n = 2,832

Company size2

% of respondents
n = 2,832

Brazil

303

Germany

308

India
Mexico

% of respondents
n = 2,832

Manufacturing

19

304

Wholesale and retail trade

17

344

Real estate, renting, and business activities

8

Construction

7

Health and social work

7

Large
Small

Morocco
Saudi Arabia

305
310

Turkey

300

United Kingdom

308

United States

350

Transport, storage, and communications

7

Agriculture, hunting, forestry, and fishing

6

Education

6

Financial intermediation

6

Hotels and restaurants

5

Other and sectors with <4% respondents

12

1 Includes mining/quarrying, electricity/gas/water, private households, and public administration.
2 How many employees are currently working in the company? Small defined as (<50 employees), medium (50–499), and large ( 500).
Source: McKinsey survey, Aug–Sept 2012

25

40

35

Medium

Education to employment: Designing a system that works
Appendices

Employer survey
At least 300 employers were surveyed in each country, resulting in 2,832 employers in total, including
oversampling (Exhibit 4). These employers were relatively evenly distributed across sectors, with
the largest concentrations occurring in manufacturing (19 percent) and wholesale and retail trade
(17 percent). Company size was grouped according to number of employees as small (fewer than 50),
medium (50 to 499), and large (500 or more). According to this classification, three out of four employer
respondents were small or medium enterprises.
Employers interviewed for the survey were required to be responsible for at least one of three areas
within the following: (1) defining hiring criteria, including necessary skills and qualifications, (2)
implementing an employee-training agenda and process, or (3) analyzing skills gaps within the
company or business.

Provider survey
At least 100 providers of postsecondary education were surveyed in each country, resulting in 908
providers in total, including oversampling (Exhibit 5). Three types of providers–open-access public
institutions, selective public institutions, and for-profit private institutions–each accounted for slightly
less than a third of the providers sample, with the balance (11 percent) composed of not-for-profit private
institutions. Nearly half of the providers sampled had fewer than 1,000 students and a quarter had more
than 5,000 students. Furthermore, providers that focused on academic tracks made up just over half of
the sample; the rest were providers focused on vocational tracks.
Eligible provider respondents were defined as employees of post-high-school educational institutions
whose current role was related to admissions, career and academic counseling, or academics (for
instance, curriculum development or accreditation). More specifically, respondents had to have primary
responsibility or significant influence or input in one of the following three areas: (1) admissions and
enrollment criteria, (2) quality-assurance and institutional-governance processes (that is, accreditation,
certification, and/or adherence to government standards), or (3) employer and recruiter relations (that
is, communications related to the development/adjustment of curriculum and career paths to meet
in-country employer/recruiter needs).

C. Segmentation
Segmentation is the practice of breaking down a population into meaningful groups, often to profile
heterogeneous customer bases. With regard to our survey, we thought it would be meaningful to
apply segmentation to the stakeholders, given that the sample consisted of participants from diverse
countries and backgrounds. For this reason, we conducted a segmentation analysis on the employer and
youth samples (the number of provider responses was too small to reliably allow for a comprehensive
segmentation).
For the purposes of this survey, we opted to segment employers and youth by attitudes and outcomes.
The objective was to determine whether we would detect patterns in attitudes and beliefs beyond
demographics that cut across nationality, age, and gender. Additional details of the employer
segmentation can be found on Exhibits 6 through 8. For the youth segmentation, two segmentations
were performed: one for postsecondary youth, and the other for secondary-only youth. Additional
details on the youth segmentation can be found on Exhibits 9 and 10.

107

108

Exhibit 5

Provider survey sample

Country

Type of learning1

Size of institution2

Type of institution3

% of respondents
n = 908

% of respondents
n = 908

% of respondents
n = 908

% of respondents
n = 908

Brazil

102

Germany

100

India

100

Mexico

102

Morocco

100

Saudi Arabia

101

Turkey

102

United Kingdom

101

United States

100

Selective
public
Vocational

Academic

<1,000

5,000

47

56
28
1,000–4,999

27

30

25

44

Openaccess
public

11

32

Private
nonprofit

Private
for-profit

1 Which of the following categories best describes your institution? If more than one option applies, please select the one that describes the majority of
your activities.
2 How many students are currently enrolled at your institution?
3 Which of the following best describes your institution?
Source: McKinsey survey, Aug–Sept 2012

Exhibit 6

Employer segments: racing
~31% of employers
Engaged and seeing results
Employers in this segment are heavily involved
and committed to doing things that improve
recruiting and enhance skills
The racing segment has the highest rates of
commitment and engagement compared with other
employer segments:
~80% rate a diverse list of skills as important and
place high importance on prospective employee
characteristics
~80% believe that it is important to interact with
providers and ~70% do engage (vs 50% and 44% in
the stalled segment, respectively)
nearly 60% of those who offer training do so while
coordinating with their industry

Source: McKinsey survey, Aug–Sept 2012

Size of organization

37

Small (<50)

37

Medium (50-499)

26

Large (500+)
Country distribution
Brazil

7

Germany

12

India

12
11

Mexico
Morocco
Saudi Arabia
Turkey

5
15
10

United Kingdom

13

United States

14

Education to employment: Designing a system that works
Appendices

Exhibit 7

109

Employer segments: neutral gear
~25% of employers
Engaged but not moving the bar
Employers in this segment are doing the right
things but not necessarily with the right intensity;
they therefore are not seeing the desired outcomes
More employers in this segment are involved than
those in the stalled segment
Still, the rates of engagement in good practices (for
example, training, communicating with providers) are
not as high as in the racing segment
Even when employers in neutral gear do these things,
they see poorer results than those in the racing
segment—for example, fewer rate communications
with providers as effective

Size of organization

43

Small (<50)

31

Medium (50-499)

26

Large (500+)
Country distribution

17

Brazil
Germany

8

India

7
18

Mexico

10

Morocco
Saudi Arabia

7
13

Turkey
United Kingdom

8
12

United States

Source: McKinsey survey, Aug–Sept 2012

Exhibit 8

Employer segments: stalled
~44% of employers
Disengaged and uncommitted
Employers in this segment are inactive and do not
place a high degree of importance on actions that
improve recruiting and skill development
The stalled segment has the lowest rate of
commitment and engagement compared with the other
employer segments in all of the below:
rating a diverse list of skills as important
offering skilled candidates higher pay
communicating with providers and coordinating with
their industry
offering in-house and external training

Source: McKinsey survey, Aug–Sept 2012

Size of organization

46

Small (<50)

32

Medium (50-499)

21

Large (500+)
Country distribution
Brazil

7
13

Germany
India

10

Mexico

8
21

Morocco
Saudi Arabia
Turkey

12
9

United Kingdom

11

United States

11

110

Exhibit 9

Overview of youth segments (1/2)
Segment

Who are they?

What matters to them?

How to engage them further

Well positioned

Wealthiest and oldest group
Most likely to be in private forprofit institutions and in
academic streams
Overrepresented in Saudi
Arabia; underrepresented in
India and the United States

Where to study: prestige of
institution, program type, and
ability to study chosen field
How to get hired: gaining work
experience and credentials
Other: belief that socioeconomic
background influences options

Link education to employability
and offer them more (they are
willing to pay even more for
even better outcomes)
Let them show others the path

Driven

More likely to be female and
current students
Overrepresented in Brazil and
Mexico; underrepresented in
Morocco, Saudi Arabia, and
Turkey

Where to study: ability to work
while studying, career paths,
and future wages
How to get hired: be the best
student and get the right degree
Other: least belief in
socioeconomic determination;
education will enable success

Don’t make them choose
between studying and working
Show them employability
outcomes to justify value (they
are willing to pay)

Struggling

Average distribution on age,
gender, and country distribution
Least likely to be at higher
income levels

Where to study: family, friends,
and teacher advice; length of
program; prestige of institution
(among several others)
How to get hired: rate nearly all
factors high; highest on
references
Other: would make different
educational-institution and fieldof-study decisions if they could

More guidance and
information on career paths,
postsecondary-placement
opportunities, and wages
Segment is low skill but high
will

Source: McKinsey survey, Aug–Sept 2012

Exhibit 10

Overview of youth segments (2/2)
Segment

Who are they?

What matters to them?

How to engage them further

Disheartened

More likely to be younger
Overrepresented in India and
Turkey; underrepresented in
Saudi Arabia
Less likely to be employed in the
education sector
Drop out of postsecondary
because of cost, lack of skill
gain, and family preferences

Where to study: prioritize being
close to friends; low preference
for program-specific factors
How to get hired: deprioritize
every career factor
Other: believe economic
situation affects outcomes; don’t
believe education prepared
them and wouldn’t pay for more

Energize them about their
future; help them see that
focusing on education and
career is not in vain
Show them that people like
them can succeed

Disengaged

More likely to be in vocational
fields or receive associate’s
degrees and to not graduate on
time
Overrepresented in Morocco;
underrepresented in Mexico and
Saudi Arabia

Where to study: deprioritize
every education factor
How to get hired: no clear
priorities for career factors
Other: low satisfaction with job;
wish they could make a different
education choice

Informing these youth is
important, but not enough
Direct supervision and
proactive guidance (such as 1on-1 outreach, as well as
assigned mentors and
counselors)

Too cool

Drop out due to lack of interest
Overrepresented in Mexico
More likely to be younger than
postsecondary groups
More likely to be employed in
the public sector

How to get hired: work
experience, references, and
prestige of academic institution
Other: do not want to pay for
more education; think they are
prepared for employment

Offer them options: over a
third of those employed are in
interim positions where they
didn’t plan to stay

Too poor

Drop out due to lack of
affordability (though self-reported
income is equal to “too cool”)
Overrepresented in Brazil
More likely to be younger than
postsecondary groups

How to get hired: low on every
hiring factor
Other: would like to pay for more
education; unsure of
preparedness for employment

Don’t make them choose
between education and work:
cost-reduction and financing
options are needed

Source: McKinsey survey, Aug–Sept 2012

Education to employment: Designing a system that works
Appendices

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