My First Salary - Observatory of Public Sector Innovation

The programme My First Salary addresses youth unemployment by providing a salary subsidy grant for the first employment of high school or university graduates bellow 30. It is implemented through a state-of-the-art tech platform that automates the application process, approval and match-making. It is a “zero paper” alternative to what used to be a “complex bureaucratic state support procedure”, combined with a transparent “recruitment procedure” – all in a streamlined and fully digital process.

Innovation Summary

Innovation Overview

The youth unemployment rate across Europe surpassed 17 percent in the summer of 2020 and is probably getting worse as a new tsunami of layoffs due to the coronavirus approaches Europe in the spring of 2021. Young people are not the only ones who have been impacted, but are certainly those who have been most severely impacted. The pandemic comes at a moment which could seriously harm their professional careers, right when they are starting to develop in the job market that has now fewer opportunities and increased competition.

The Government of Serbia launched the program My First Salary as one-of-a-kind program designed to lower the youth unemployment rate in Serbia (25.5% Q1 2020), reduce the waiting time for a first job (currently two years), and bridge the gap between the supply and demand side on the job market. Supported by a digital platform, this programme overcomes the bureaucratic hurdles that might present a roadblock for young people to apply for the participation in the program.

The programme addresses two main target groups: first, young people under the age of 30 with no work experience with a high school or college degree, while the second target group are the employers from the private sector. The priority for participation in the programme is given to employers from particularly negatively affected areas in accordance with the Decree of the Government of the Republic of Serbia on the level of development of local self-government units.

Under this programme, the Government of Serbia offsets the costs for young people, under the age of 30, to work for selected companies by providing “a salary subsidy grant” for a period of nine months. It is aimed to assist both - young people in translating their theoretical knowledge into practice, and companies in meeting their immediate business needs through further recruiting of well-trained professionals who know the company. The programme is well-designed to help the economy in solving the problem of staff shortages.

The implementation of the programme is end-to-end digital by design – a zero paper alternative to the conventional process. The application, approval and even matchmaking process is automated and successfully eradicates the bureaucratic impediments.

The portal serves both the companies and the candidates (jobseekers), firstly to apply for participation in the program and if approved, to match the right talent to the right opportunity. The application and the hiring processes are accelerated by web services that automatically check if the eligibility conditions are met – for companies: whether the company has paid taxes and contributions, the number of employees, etc., and also all the relevant qualifications for the candidates. In order to be able to post jobs, companies must register with qualified electronic certificates, while candidates have to register with basic forms of government-provided eID. The software solution includes AI recommendation algorithm for matching candidates with job pots, as well as visualizations and dashboards.

The idea for the programme came from the Serbian Chamber of Commerce, while the public and private sectors - including youth organisations - designed this solution together. More precisely, the team to design the programme "My First Salary" was comprised by representatives of the Office of the Prime Minister, the Ministry of Finance, the Ministry of Labor, Employment, Veterans and Social Affairs, the Ministry of Sports and Youth, the National Employment Service, the Office for IT and eGovernment and the Serbian Chamber of Commerce. The team for the design of the portal My First Salary was run by the CEO of the Office for IT and eGovernment, and included project managers, solution architects, engineers, user experience specialists, and a software company.

The programme will have a follow up, where a special team will analyze the results, calculate the decrease of the unemployment rate and the waiting times for a first job as result of the program as well as better understand the supply and demand side for jobs according to regions, cities, professions, age, gender, etc. Based on those results, the program will be modified and implemented every year. The portal will be modified accordingly.

Innovation Description

What Makes Your Project Innovative?

In the Covid-19 era, a number of countries are supporting youth unemployment in the form of unemployment benefits, while companies are provided wage subsidies to recover. All those are mainly financial support measures with short-term impact and without further addressing the problem of the lack of skilled labor.
This programme, besides providing the much-needed financial support for both the unemployed and companies in the Covid-19 economy, goes further as:
- It offers young people a possibility to gain practical work experience;
- Meets immediate business needs through further recruiting of well-trained professionals;
- It is implemented in a manner that is suitable for young people – fully digital; and
- Is using an ecosystem model by leveraging both capabilities inside and outside government, and uses both an open innovation and co-creation approach.

What is the current status of your innovation?

While the initial idea was floated by the Serbian Chamber of Commerce in June 2020, the public and private sectors, including youth organisations, worked in a collaborative environment to design and co-create the solution. By September 2020, within a month’s period from the launch of the portal in August 2020, 28,000 open positions were listed on the platform by various companies, while more than 30,000 application are expected (by mid November) for these available positions. Employment contracts will be signed during November/December 2020.

My First Salary will have a follow up, where its performance will be analyzed to see if the outcome of reducing the unemployment rate and waiting times for a first job. Moreover, the analysis will be used to better understand the supply and demand side for jobs according to regions, cities, professions, age, gender, etc. Based on those results, the program will be modified and re-launched every year, in the same time enhancing user experience.

Innovation Development

Collaborations & Partnerships

A diverse design and development team representing all stakeholders was formed to design and implement the program, and included youth organizations, chambers of commerce and government officials. Young unemployed people and business leaders represented the demand and the supply side of the labor market respectively, while government operationalized and financially supported the program.

Users, Stakeholders & Beneficiaries

Young people in Serbia have to play a central role in the social and economic recovery of the country. By launching the programme My First Salary, they are given the opportunity to gain practical work experience so they compete on the job market on equal grounds, the companies are given a tool to shape the workforce according to their real needs, while the country gets the chance to be better prepared and to recover faster from the crisis.

Innovation Reflections

Results, Outcomes & Impacts

The programme My First Salary is designed to lower the youth unemployment rate in Serbia (25.5% Q1 2020), reduce the waiting time for a first job (currently 2 years), and bridge the gap between the supply and demand side on the job market. This is especially important in the Covid-19 economy.

The programme started in August 2020 and will close in December 2020. It will have a follow up, where a special team will analyze the quality of the matching process, the quality of provided training and mentorship, calculate the decrease of the unemployment rate and the waiting times for a first job as well as better understand the supply and demand side for jobs according to regions, cities, professions, age, gender, etc. Based on those results, the programme will be modified and implemented every year. The portal will be modified accordingly.

Challenges and Failures

Since the solution needed to be implemented in a short timeframe, the main chalenge was the pressure to deliver in the previously defined deadlines. Strong leadership skills were instrumental to motivate all members of the teams so the programme is implemented according to the planned dynamics.

Conditions for Success

The programme is a myth buster that governments are necessarily laggards when it comes to delivering a project. Modern day leaders are more and more aware of agile ways of working and this has been exceptionally displayed in this case as the whole project and its implementation was done within the span of few months. It also speaks volume about how visionary leadership can be a catalyst of the change. The PM of Serbia, Ana Brnabić has been at the forefront of this programme. She mobilized the entire community, provided the necessary support and let the business sector and the youth organisations design the solution.

Replication

This solution could be replicated by other countries. It is a workforce model that is usable for a variety of projects, rather than a contextually, specific project per se. But the main innovation to be replicated is the "smart government" approach that goes beyond technology to consider a holistic picture including technology, people, processes, and other missing pieces such as policies and regulations.

Lessons Learned

The programme was not conceived because the government wanted to create a digital tool to simply showcase the availability of another digital service, but rather because of a real-life problem we wanted to solve: in this case, the unemployment rate amongst the youth of the country. Instead of jumping right into using technology, an understanding was developed about the key drivers of this problem. The main lesson here is that the best innovation happens when there is a problem to solve, and that open innovation is the best approach to provide the success of programs of similar scale and impact. Governments have to develop the ability and capability to acquire and apply knowledge and skills quickly and effectively for the benefit of all stakeholders.