Business Unity SA (Busa) urged the government on Tuesday to introduce a youth wage subsidy as soon as possible.
"The funds made available by the National Treasury nearly two years ago for a youth wage subsidy should now be constructively deployed to help mitigate youth unemployment," Busa said in a statement.
A youth wage subsidy offered more advantages for youth employment than other short-term job creation initiatives. It had the potential to create over 400,000 jobs, Busa said.
In addition, small and medium-sized businesses, which had the greatest potential for employment creation, would be able to use the facility.
Concerns about potential abuse of the scheme could be addressed with appropriate safeguards, it said.
"A well-crafted scheme of this kind can make a significant contribution towards reducing youth unemployment in South Africa, especially at a time of relatively low economic growth and rising unemployment," said Busa.