When the global crisis started in 2007, Mr. Freixe was in charge of Nestlé Iberia. At that time, much of the economic growth in Spain had come from the real estate sector, fueled in part by relatively low interest rates and by demand coming primarily from a constant flow of immigration from Latin America, Eastern Europe, and North Africa, as well as from investors coming from further north (above all from Germany, the UK, and Scandinavia) and partly by more speculation. However, it all collapsed in 2008, and as a consequence of the financial crisis, a social crisis emerged. The younger generation of Spanish society was particularly hard hit, suffering an exceptionally high rate of unemployment. Outside of Spain, youth unemployment also grew throughout Europe. It was time for Nestlé to act.
Nestlé’s basic values had always been based in the following dimensions:
Focus on creating shared value for Nestlé and for society
Invest in innovations
Invest in people as a source of competitiveness with a strong emphasis on hiring young people and training them throughout their careers
Mr. Freixe realized that the task of creating new jobs should primarily be the responsibility of the business sector, as opportunities were scarce in the public sector. However, there seemed to be a dilemma here: companies generally prefer to hire workers with experience, and youths generally do not have the type of experience that businesses typically look for. Furthermore, in a context of crisis, more focus would be on cutting jobs rather than on investing for the future.
So, when Mr. Freixe became Head of Zone Europe, he launched a youth program with a focus on apprenticeship and traineeship throughout its facilities (i.e., the head office, factories and distribution centers, and across all markets). This program gradually came to be called The Nestlé Global Youth Initiative, and it was to be driven entirely by Nestlé’s line organization instead of by staff groups such as HR or PR. The basic underlying premise was to create value for each youth involved. The program also indirectly benefitted society through better youth integration in the community in the following ways:
Job opportunities
Education and on-the-job training
Readiness for work activities through participants’ acquisitions of relevant skills (e.g., CV clinics and preparation for job interviews)
The aim was to raise the employability of young people.
Launched in Europe, the program was further expanded into the Americas (Mr. Freixe was promoted to EVP and CEO Zone Americas in 2014), and Zone Asia/Middle East/Africa also became involved.
At the inception of the program, Mr. Freixe estimated that Nestlé could create opportunities for at least 20,000 young Europeans. Nestlé made public this commitment for the following three years. Additionally, Nestlé asked its suppliers and business partners to participate, and 15 quickly responded with enthusiasm to create the Alliance for Youth (All 4 YOUth). They were able to offer another 80,000 job opportunities/internships so that the program came to encompass more than 100,000 young Europeans. The program’s success has been spectacular for its impact on Nestlé and on society. The business case has shown that 1 CHF invested would return multiple times to society (at least fivefold), and indeed it has created a return of 1.3 to 2 per CHF to Nestlé.
Three often-asked questions, or possible objections, should be discussed:
- How can this internship program be implemented without causing major disruptions to Nestlé’s internal operations and its ongoing drive to be efficient?
The answer seems to rest on the fact that in each location (factory or distribution center) only a few interns would be employed, and they would not create a “disturbance” but rather be a source of pride and inspiration for local transfer of knowledge.
- What happens with those youths who are not offered permanent jobs at Nestlé at the end of their internship periods?
The very fact that these youths have been trained at Nestlé would significantly improve their chances of obtaining subsequent employment elsewhere.
- How can Nestlé both restructure when required and engage in such a program?
On this question, everyone (including the workers councils) quickly recognized there was no contradiction, understanding that Nestlé may have to downsize structures as business required even while investing for the future in talent development and acquisition.
Impact on Nestlé’s culture
Nestlé’s traditional culture might have been characterized as rather discrete and understated; some might even have described it as “shy”! The youth employment program was widely shared early on in the financial crisis and came to be seen as a manifestation of Nestlé’s human and social responsibility. Importantly, this program was not met with suspicion from society; it seemed to be generally non-controversial, perhaps in contrast to sometimes-raised criticism from societal activists. The program became widely seen within the Nestlé organization as a source of inspiration, even pride. As such, the program seemed to contribute to Nestlé’s drive toward an even stronger symbiosis with society.
Integration after civil strife
Today, civil strife has created large groups of relatively young displaced persons and former civil war combatants in several parts of the world. These vulnerable and/or traumatized persons are in acute need of reintegration into “normal” society after the end of given military conflicts (e.g., in Columbia and Syria). Even in the US, specific challenges remain in reintegrating veterans into civilian society. All experts agree on the need to involve these groups of youths in youth employment programs. It should be noted that Nestlé’s global footprint represents a definite advantage here. For instance, 15 young interns from Cuba received their training in the Dominican Republic and Ecuador (i.e., in locations where Nestlé would have more skills and competencies to train them).
Enhancement of societal interaction
The youth employment program seemed to have led to easier ways for Nestlé to dialog with the public sector, including on other issues such as regulation or health and safety. Moreover, it was particularly interesting to observe how this “training on the job” approach seemed to resonate well with the Swiss or German publics, with their long traditions of using this approach.
Broadening of the program
Nestlé and its traditional suppliers might be seen as representing the more traditional side of productive society. To broaden the program’s reach from mostly blue-collar employment to so-called “new economy” positions, Nestlé widened the scope of the Youth Initiative to encompass digitalization. Companies such as Google, Facebook, and Microsoft became partners here, and E&Y also become involved to measure more precisely the impacts of this program (i.e., value to society and value to Nestlé).
Next steps
Nestlé is committed to this program for the long term and has defined ambitions until at least 2030. In addition, Nestlé’s new CEO, Mr. Mark Schneider, is fully behind the program, and so are Nestlé’s three zone heads (EMENA, the Americas, and Asia/Oceania/Sub-Saharan Africa). The next major challenge is to further strengthen the program, which has been in existence for more than 6 years and seems to be thriving more than ever!
About Mr. Laurent Freixe
Born in Paris, France, Laurent Freixe joined Nestlé in 1986. Laurent plays a leading role in promoting youth employment and employability across the company. Starting in Europe, Laurent launched the Nestlé youth initiative, Nestlé Needs YOUth, in 2013 and has been successfully driving this global initiative that aims at providing a wide range of employment opportunities for young people under 30 and strengthening their capabilities and professional skills to raise their employability. Additionally, on May 23, 2018, Laurent was named International Youth Ambassador by the International Youth Organization for Ibero-America.
Q&A with Laurent Freixe
1. What were the success factors you identified when deploying the Nestlé Youth Initiative? Did they vary across regions?
Youth unemployment is a global issue with similarities and differences across regions. The youth unemployment rate is globally two to three times higher than the adult population rate. The number of NINIs, neither in employment nor in education, is high across the board. Differences come from the dynamics in economic and demographic development across regions combined with the fact that informal employment is the form of employment prevailing in emerging markets. A key success factor for Nestlé is our global footprint, as well as our focus on investment to drive growth, which in turn creates job opportunities. People employed in the program are below 30 years of age with no discrimination in terms of gender or educational background as we provide opportunities across our operations. In the U.S., as we cannot discriminate by age group, the project is called “Project Opportunity” and focuses on apprenticeships.
2. Would you also expect these success factors to be applicable to other organizations wishing to implement ESG initiatives?
Yes, these success factors do apply to other businesses. After all, the most direct contribution of a business to society and to the communities is through providing formal jobs.
3. As the program broadens to digitalization and to companies in other industries, how will its durability be ensured? What are some ways the program needs to be adapted?
The global nature of the Alliance and the commitment of its members is the best guarantee of the sustainability of the program.
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