White House First Job Compact Calls on Employers to Address Youth Unemployment

On October 11, President Obama announced that nearly 40 of the largest employers in the United States—including Walmart, Hilton, AT&T, and more—have signed on to the #FirstJob Compact. These companies have committed to take a look at their hiring practices—from recruitment to candidate assessment to how they train and support workers—to identify ways to connect more of our nation’s young people to early career opportunities. The President’s announcement reflects an important shift in the efforts to tackle youth unemployment in the U.S. Once largely on the sidelines, employers are increasingly recognizing that youth employment is a business imperative—and taking action.

The overall unemployment rate in the U.S. has decreased significantly in recent years, yet the unemployment rate for younger workers, at 11 percent, remains more than double the national average. More troubling still, there are more than 5.5 million “opportunity youth” in this country: young people between the ages of 16 and 24 who are neither in school nor working. For these young people, failure to gain an early foothold in the labor market can translate to permanently lower earnings, family and community instability, and a host of other challenges.

Until recently, efforts to improve youth employment in the U.S. have predominantly focused on education and training to better prepare young people for jobs. While these programs are important, they will never be enough to tackle this problem at scale because they do not address the barriers within companies that limit employment opportunities for youth.

“Youth hiring by Coalition members surpassed the 100,000 goal in year one, and the Coalition has now aligned with a set of cross-sector partners on a new target—connecting one million opportunity youth to jobs over the next five years.”

Large-scale change will require employers to innovate around their hiring and retention practices to improve outcomes. The Rockefeller Foundation refers to this approach as “impact hiring”—strategies, tools, and practices that address employers’ entry-level talent challenges and expand employment opportunities for younger workers. Luckily, a growing number of employers are exploring impact hiring solutions.

Over the past year, more than 50 large national employers, including Walmart, have joined the 100,000 Opportunities Coalition, a business-led initiative with a goal of connecting 100,000 opportunity youth to jobs over three years. Hiring fairs allow member companies to reach untapped talent in key markets, and HR leaders have been able to connect with peers on topics like retention through an employer community of practice. Youth hiring by Coalition members surpassed the 100,000 goal in year one, and the Coalition has now aligned with a set of cross-sector partners on a new target—connecting one million opportunity youth to jobs over the next five years.

Now, more employers are committing to examining their hiring practices as part of the First Job Compact. For Walmart, the decision to sign on to the Compact makes business sense. Youth represent more than half of the hundreds of thousands of workers hired by Walmart each year. In order to improve retention and advancement within this critical segment of its workforce, Walmart is creating more visibility to career pathways, expanding entry-level training, raising compensation of entry-level workers, improving front-line manager leadership development, and testing a variety of other solutions to improve the experiences of youth in the stores.

The companies committing to the First Job Compact are among the pioneers of impact hiring—they are testing, measuring, and scaling solutions that lead to better outcomes for younger workers and better outcomes for their businesses. They are also forging innovative partnerships across the public, private, and civic sectors to build stronger pathways to jobs for younger workers. One example of this lies in our own work: Walmart is collaborating with The Rockefeller Foundation to test impact hiring solutions within Walmart stores, with an aim to develop scalable solutions for its workforce of 1.3 million associates in the U.S.

To connect the nearly six million opportunity youth to jobs will require many more employers to make similar commitments. But, as these pioneers have shown us, this may be an opportunity employers cannot afford to miss.