West Africa Vocational Education (W.A.V.E) WAVE Hospitality Empowering West African youths with skills and jobs April 2013
Over 300 million people, 15 countries, over 43 million unemployed youth (aged 15-30) across West Africa Senegal: 49% national unemployment Abidjan, Cote d’Ivoire: 35% Unemployment Gambia: Youth unemployment > 40% Conakry, Guinea: Youth unemployment among graduates > 66% Nigeria: 42% Youth unemployment Sierra Leone: Youth Accra, Ghana: unemployment > 60% Liberia: Youth 25% unemployment > 85% unemployment Source: African Economic Outlook, allAfrica.com, ILO, IYF reports
Beyond the statistics are real faces…
However jobs are being created…with the retail & hospitality sector projected to generate 8.8 – 13 million stable jobs by 2020
Meet Friday Tomorrow’s Promise Today’s Reality JOB • 25 years old • Entry-level frontline job • Lives on < $2/day that leverages innate abilities • No college education • Learning a range of • Limited /no soft or technical skills technical, business and • No networks/connections life skills • Resilient, flexible, creative thinker • Stable growing income • Chronically unemployed and • Responsibility, locked out of the formal economy professional growth + Career advancement “I hope to build a stage that is mine, and have my future”
Meet Ada, HR Manager of Wheatbaker Hotel Lack of critical soft skills hindering staff performance “The customer wanted a refund after a bad experience…but our staff did not know how to escalate the situation to • upper management…customer was Sizeable recruiting and training extremely frustrated ” budget • No efficient way to vet for soft “Staff unable to preempt situations skills when recruiting… emphasizes (when customers have unscripted need)” work experience as a proxy “We were having generator issues and • Customer service becoming a the staff weren’t good about bigger problem as competition communicating with hotel guests about the power issue” “I am looking for new ways to hire people whose skills match my needs”
Introducing We up-skill West African youth to fill employment gaps in high job-creating sectors such as hospitality & retail sectors Continuous Screening Training Placement learning • • • • Emotional Training modules Paid Data-tracking and Intelligence (EQ) tailored to apprenticeships & performance assessments to industry needs placement monitoring of on- determine actual partnerships with the-job learning skills base employers • • • • Levels the playing Up-skills Friday to Gives Friday the Supports Friday’s field for Friday prepare him for leg-up during the learning on-the- relevant jobs job search job
By 2018… 50,000 WAVE youth trained in marketable skills to reach their true potential and supported in stable jobs Average WAVE Alumni would have experienced increased income of 2-3x …Converting Africa’s youth from demographic liabilities to “demographic dividends”
WAVE’s Unique Value Proposition Low Medium High Considerations for the average trainee Access Cost Relevance Quality Convenience Can I get in? Can I afford it? Will I get a job? Will I learn Will it fit my useful skills? schedule? Government- led institutes, e.g. NIHOTOUR Private sector programs, e.g. WaveCrest Placement / Recruiting agencies In-house HR WAVE
How will we deliver? Continuous Screening Training Placement learning • • • • Employer-driven EI Industry-centric Partnerships with Top-up training assessment tool curriculum design strategic employers + modules training for their • • • Based on group In-class and Ongoing database current employees exercises, role mobile/online- of talent/skills and • plays & visual tests based learning Fast-track placement employer role available to top- requirements • • Basic literacy & Instructor training performing trainees • numeracy tests KPI monitoring • Program cycles (2- • Ongoing support for 3 weeks) un-placed trainees • Class size (60:1) Lean, data-driven, highly-efficient delivery mechanism
Go-to-Market Approach “Low - hanging fruit” “Partner for Scale” “Establish Credibility” • Leverage public sector • and social impact Pull strategy based on Trainees • Target youth clusters (e.g. partnerships results – placement youth groups, non-profits) success and income transformation • Brand-building social + traditional media • Target multi-chain multi- sector conglomerates with • Employers Target larger employers • Target smaller hotels / scale economies • Introduce new offerings retailers with limited Stage 3 for hotels, e.g. plug-and recruiting $$ play software • Leverage personal networks Stage 2 • Build preferred supplier status Stage 1
WAVE offers two paths for potential trainees 1 Guaranteed Placement Training • Paid job • $60 upfront per trainee placements to • Self-directed trainee develop job search technical skills • Problem-solving • Job readiness • Critical thinking • Team work Top 50 th percentile of trainees • Expectations • Negotiation • $70-80 • Literacy (grammar) management additional fee • Communication & numeracy from first 2 paycheck Bottom 50 th percentile • $150 employer Training + Support Ongoing job support through access to charge WAVE job database • $80 upfront per trainee • Job search support (interview facilitation)
What we’ve done so far to test our major assumptions Customer Value Tech, Ops & Go-to-Market Profit Formula Proposition Management Hypothesis • 5 ‘prototype’ • Curriculum • Effectiveness of • Youth + Employer Testing training sessions development social media + Willingness-to-Pay • March mobile-based Payment features • Focus groups to • Learning techniques 2013 marketing vs. understand • Hotels, restaurants • 5 days traditional • EI testing motivations + retail partners marketing • 100 • Performance signed students measurement Summer Pilot • July 2013 • 2-3 weeks • 30-40 students
WAVE Team is uniquely poised to deliver Misan Rewane (HBS) Bryan Mezue (HBS) Karan Chopra (HBS) • Strategy + Operations experience • • Startup Fundraising and Social Enterprise operations • in education/ youth development BOP consumer marketing Operations Experience • Monitor Group, TechnoServe, • • McKinsey & Co, GADCO Bain & Co, dLight, Actis • • (Ghana, Ethiopia) Bridge Int’l Academies (Nigeria) • (Nigeria, Cote d’Ivoire, Kenya) Navid Rahimi (HBS) Modupe Fadugba (HGSE) DongGun Sim (HGSE) • • Curriculum Development + • International development Human Development • Secondary education technology and Psychology • • Education start-up • World Bank, Global Good of (Uganda, South Africa) • African University of Sci & Tech Intellectual Ventures • • (Togo, Nigeria, Tanzania) (Togo) Deep Understanding of the local context 2 Ability to Execute in Africa 1 “We are the counterfactual” 3
Engagement with Advisors and Partners M.A.D. Hospitality • Best-in-class customer Curriculum service excellence and Development hospitality experts • Prof. Anita Tucker, HBS; Prof. Vincent Magnini, Cornell Center for Hospitality Research • Emotional intelligence Emotional experts, psychologists and Intelligence career assessment platforms • Commitments for Job placements from 5 hotels Placements and 1 apparel retailer • Mobile recruitment and Technology web-centered learning Institute for Venture Design companies • Vocational education Strategic • Industrial Training Funds • Government training schemes government programs Partnerships • Graduate Internship schemes
Program Level Economics Program Level Economics (USD) At scale of 3 program office Conservative Base Case Optimistic Level of Certainty Trainees per Program 60 60 60 High Program length (weeks) 3 3 2 Low Trainee : Teacher ratio 30 30 30 High Trainee Fee (per Trainee not Placed) $50 $70 $70 High Trainee Fee (per Trainee Placed) $110 $150 $150 High Employer Fee (per Trainee Placed) $110 $150 $150 Medium Annual number of trainees 960 960 1440 Annual Revenue per Program $129,600 $177,600 $266,400 Rent $15,000 $15,000 $15,000 Teacher Salaries $23,333 $23,333 $23,333 Staff $30,500 $30,500 $30,500 Admin (including BD, Marketing) $18,773 $18,773 $13,993 Cost per Office $87,607 $87,607 $82,827 Annual Cost per Program $29,202 $29,202 $27,609 Annual EBITDA per Program $41,993 $89,993 $183,573 % of revenue 32.4% 50.7% 68.9% • Attractive program level economics: each course program has ability to generate strong EBITDA returns ($90k per program) • Key financial drivers identified and tested: through MVP and fieldwork, 4 of the 6 critical assumptions have been tested; other drivers will be tested in the pilot • Unit economics will improve with scale: current economics do not factor in scale benefits (multiple programs with same overhead) and other revenue streams (e.g., training existing employees)
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