In 2021, as the Challenge Fund for Youth Employment (CFYE) began shaping its portfolio in Jordan, Lina Alkhawaja, the country lead was helping define what the programme would become. “I joined CFYE in a very early stage, at the time we were just developing our strategy and our portfolio,” she says.

Five years later, the programme is coming to a close with a clearer answer to a persistent challenge: how to support businesses to hire young people in a constrained labour market. Jordan’s starting point has long been difficult.

Youth unemployment remains among the highest in the region, reaching close to 46%, with significantly higher rates for young women. Structural constraints—from skills mismatches to limited access to finance—have made it difficult for companies to absorb new entrants into the workforce.

CFYE’s approach worked directly at that pressure point. In Jordan, as in the other countries where CFYE operates, businesses came forward with proposals to create, match or improve employment opportunities for young people. CFYE translated these proposals into tangible impact by combining grant funding with private-sector co-investment. This approach supported projects launched in 2021 and 2022, while a 2025 top-up opportunity enabled four high-performing implementing partners to scale their efforts further.

By June 2026, these combined initiatives resulted in approximately 16,000 jobs created, matched, or improved, with 50% of them held by women, at an average cost per job of €495, backed by a total fund allocation of €8.6 million.

This disciplined co-investment model not only reduced risk for small and medium enterprises but also embedded gender-responsive policies and strengthened organisational capacity, ensuring that the jobs created were both sustainable and aligned with the ambitions of Jordan’s youth.

Rather than funding training programmes in isolation, the fund co-invested with companies—sharing the upfront cost of hiring and equipping young people for work. In Jordan, this model supported 11 projects across sectors including manufacturing, digital services, agribusiness and education, creating incentives for firms to expand their workforce in ways that aligned with business growth.

For Alkhawaja, this practical alignment with business needs was critical both for the team and her personally. “I enjoy working with the private sector,” she says. “I learned a lot about the innovative mindset from the experience.”

She explains that the mindset translates into specific changes inside companies. Employers invest in in-house, job-aligned training rather than relying on external courses; they adapt roles to match available talent; and they introduce policies—such as flexible working or safer transport—that make it easier for women to enter and stay in the workforce.

“Small businesses need both risk-sharing and incentives to hire,” Alkhawaja says.

The fund’s co-investment model was designed to provide exactly that: companies matched funding and received payments based on results, linking financial support directly to job creation and retention. For many, this reduced the risk of hiring first-time jobseekers and encouraged longer-term investment in their workforce.

The effect is visible not only in jobs created, but in how companies operate. Across CFYE, more than 239,000 jobs have been created, matched, or improved, 16,000 of which were in Jordan. In Jordan, supported companies introduced stronger labour policies, built internal HR systems, and improved working conditions in line with national and international standards.

“Small incentives can unlock large behavioural change,” Alkhawaja says.
In practice, that change looks like decisions companies continue to make after the funding ends—investing in staff training, maintaining inclusive policies, and pursuing further growth. Several partners have gone on to secure additional funding or partnerships, using CFYE as a springboard into broader impact finance and investment.

At the centre of this is a belief Alkhawaja returns to often. “I think we have many talented people in the region,” she says. “All that they need is an opportunity.” CFYE’s role has been to make that connection viable for businesses.

As the programme closes, the next phase in Jordan is less about piloting models and more about scaling them—particularly in sectors with stronger job creation potential. The experience points toward areas such as digital services, where companies can grow beyond the limits of the domestic market and create roles that are adaptable to evolving skills needs.

For Palladium and its partners, this means building on existing relationships with companies to expand co-investment models into high-growth sectors, strengthen links between employers and training providers, and bring in additional private capital to reduce reliance on grant funding.

It also means continuing to work in a way that reflects the realities of both businesses and workers.

“Don’t forget to put the human lens before anything,” Alkhawaja says. “Remember that you are dealing with a human, be adaptive, be flexible, and be innovative.”

Her own experience has reinforced that balance. Working across countries and cultures has shaped how she approaches partnerships in Jordan, where understanding context—and adapting quickly—often determines whether collaboration succeeds.

CFYE has shown that co-investment can help companies hire young people. The next step is to expand this approach to more firms and sectors. That means strengthening links between employers and training providers so hiring young people becomes a standard part of business growth in Jordan.