Jobs Boost Fund: Re-thinking Funding for Outcomes, Innovation and Lasting Impact
By Riyaadh Ebrahim, Programme Director: Jobs Boost
Stimulating sustained employment
South Africa spends billions of rand every year trying to get young people into jobs to try to tackle its overwhelming youth unemployment problem. A lot of that money goes towards input-driven activities like training and certificates. These rarely lead to employment. The Jobs Boost Outcomes Fund set out to pilot an Outcomes-Based Funding (OBF) model where it pays only for the desired outcomes – sustained employment.
The Jobs Boost pilot was run under the Presidential Youth Employment Initiative (PYEI). The Department of Higher Education and Training via the National Skills Fund was the outcomes funder of the R300m pilot. The fund was redesigned (with MSDF funding) and administered by Krutham.
The Jobs Boost pilot has all but completed its last disbursements and is nearly wrapped up. It was an overall success – it delivered over 7,000 placements of excluded youth (youth that attended quintile 1-3 public schools and/or recipients of child support grants) into quality jobs (12-month contracts or open-ended, fully remunerated by the employer, minimum wage or higher and working 30+ hours per week). Of these, 4,200 youth have sustained employment for six months or longer. This was achieved through 12 implementing partners, and youth were placed into 215 different employers operating nationally. The average monthly salary achieved across the programme was R5,318 and R262m was disbursed in outcomes payments across the implementing partners.
Evidence of success
An independent evaluation of the pilot, commissioned by the German Development Agency, GIZ, and conducted by Komis, which included a detailed value-for-money assessment and process evaluation, reported positively on the delivery of the programme. The evaluation found, broadly, that the model is effective at delivering outcomes and the costs compare favourably to other publicly funded skills development programmes. This was expected to be the case as 80% of the outcome payments are directed at placement into employment and sustained employment for three- and six-month periods. Milestone evidence is first independently verified before payments are processed to implementing partners.
The independent value-for-money evaluation compared Jobs Boost against South Africa’s Sector Education and Training Authority (SETA) skills programmes, the traditional route for public training spend. Jobs Boost delivered a verified, sustained job at R49,732 per person. The comparable SETA figure was R53,627 per training graduate, and the SETA number only measures whether someone finished a course, not whether they found work afterwards. Jobs Boost, by contrast, counts someone as a success only if they are still employed six months later. On that basis, 64.3% of the young people the Fund placed were still working after three months, well above the 44% completion rate typical of SETA programmes. The Fund is therefore achieving a significantly more difficult outcome, at a lower cost.
Creating space for innovation
The magic of an outcomes fund is that there are similarities to trust-based philanthropy in the way that it can incentivise innovation because there are very few restrictions on how funds should be spent, while it simultaneously shifts failure risk away from the funder (in this case the State) to implementing agents. This allows the development of innovative solutions that are directed only at achieving the outcomes.
There are many rich learnings that come out of a pilot of this nature that pertain to job creation as well as funding. The pilot proved that it is possible for innovation to flourish when partners are allowed to do what they know needs to be done. The Tourism and Business Institute of South Africa (TTBISA) relied on a post-placement mentoring programme. This mentoring included a strong financial literacy training component that helped stave off some of the indebtedness that youth tend towards when they start working, which played a significant role in ensuring greater retention. TTBISA also introduced counselling services for the youth to help them deal with difficult domestic issues and to deal with stresses related to new work and general mental health.
Because the fund was not prescriptive of the types of training to be offered, or how it should be offered, unique employment creation models could be tested. Swift Skills Academy showed that there are youth that have welding skills and, with a simple recognition of prior learning, those youth can become coded welders, which increases their overall employability. Cheeba Cannabis Academy developed youth into cannabis dispensary positions that are often incorrectly resourced, and that programme also taught us a lot about the time it takes for certain industries, such as cannabis, to formalise. V&A Waterfront developed a model of job placements that shed light on how a geographically based employment creation model in an established industry might work. Employment Solutions Management (ESM) demonstrated a rural and peri-urban placement model in technology that we can learn from in future iterations that seek to have some rural coverage.
Trust and agility
The pilot taught us that a trusting and open relationship between the fund and partners is essential. The Foundation for Professional Development (FPD) had lined up employers that would absorb its newly developed lay mental health counsellors. Unfortunately, all these employers were USAID-funded entities that could not absorb these youth when USAID abruptly cut funding to South Africa. Fortunately, the timing was such that FPD had not incurred training costs at that stage and was able to drastically reduce targets and pivot towards other employers not dependent on USAID. This was possible due to the agility of an outcomes fund in that it can easily renegotiate targets on unspent funds. This was also facilitated by a strong trust relationship between FPD and the Fund, which allowed for honest disclosures ahead of time.
Testing assumptions
We also learnt a lot about the employment of excluded youth and had many of our assumptions tested. Critically, there was no evidence of “creaming”[1], in fact, the opposite was found to be true; that youth from more excluded backgrounds were slightly “stickier” in employment retention. Some trainers in the Business Process Outsourcing (BPO) spaces reported changes to training processes that they needed to introduce to accommodate youth from lower quintile schools than they were normally used to. Those changes led to better quality training and many of the trainers and BPOs are now more open to employing youth from more excluded backgrounds.
Matching skills to demand
Employment creation is a complex subject that is largely bound by the growth of the labour absorption capacity and growth of the economy. Jobs Boost is not a silver bullet for solving the employment crisis in South Africa. Jobs Boost is an innovative funding mechanism that removes non-performance risk from the funder and allows implementing partners agency in approaching targeted outcomes. It is a powerful tool in developing and matching skills to demand. The net effect of this is that money is spent only on what is needed, which frees up national budget to be spent on other employment-creating measures.
We welcome the announcement by President Cyril Ramaphosa in the 2026 SONA stating: “We will also transform the National Skills Fund into a more agile, outcomes-driven instrument that supports unemployed young people to access workplace experience and employment, building on successful initiatives such as Jobs Boost.” We believe that this approach will reduce excess expenditure on input-driven activities that may not yield the desired outcomes.
Scaling up
We are currently busy with scale-up activities to increase the fund size to R1bn and 20,000 job placements that will still be anchored by the National Skills Fund and will be complemented by other public sector funds as well as larger international and local development funders and philanthropies. We believe there is still significant demand in the economy that this programme can meet.
To learn more about Jobs Boost or the other exciting OBF work, visit us at www.krutham.com or contact rebrahim@krutham.com
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Krutham’s role in Outcomes Based Funding Initiatives
On the back of the successful implementation of this fund and as advocates of a greater adoption of OBF, Krutham is involved in other OBF-related initiatives. It has just completed the OBF Handbook, designed to support anyone interested in creating or contributing to an outcomes-based finance programme. The handbook was commissioned by the South African Medical Research Council (SAMRC) and produced by Krutham, in partnership with the South African Presidency through the Presidential Youth Employment Intervention (PYEI) and was made possible with lead funding from the SAMRC and additional funding from The Standard Bank Tutuwa Community Foundation and the FirstRand Foundation. Additionally, Krutham is also involved in other OBF funds and mechanisms in South Africa and across the sub-Saharan region.
[1] Creaming refers to a trend where when service providers select the most work-ready participants and leave behind those who need more help.