Employer use of publicly-funded employment services


In July 2022 the Government plans to roll out nationally a new form of employment services—the New Employment Services Model (NESM). The NESM is based largely on the recommendations of an independent review of the jobactive system, the final report of which was released in 2018.

Under the NESM, which is currently being trialled in two locations, two different levels of service will be provided to job seekers, based on their assessed level of job readiness. The most job-ready and digitally literate of job seekers will self-service online while more disadvantaged job seekers—those with complex or multiple barriers to gaining employment—will receive intensive services delivered by employment services providers (providers). Disadvantaged job seekers could include mature age workers, people with disabilities, migrants and refugees, Indigenous Australians and people who have been unemployed long-term.

Arguably, there are two main objectives behind the shift to the NESM. The first of these is to move away from a one-size-fits-all model of servicing and provide help to those job seekers who need it the most. The second objective, and the one that is the subject of this Flagpost, is to make the jobactive system more relevant to employers.

Employers’ problems with jobactive

Based on stakeholder responses to a discussion paper released prior to the trial of the NESM, employers have several problems with the current jobactive system.

Stakeholders—a group which includes job seekers, providers, community service providers, peak bodies and other groups—expressed the view that employers were frustrated at being approached by multiple providers seeking placements for job seekers and receiving large quantities of unsuitable applications from job seekers seeking to meet their job search requirements. Under current compliance system arrangements job seekers are generally expected to search for 20 jobs a month to meet their mutual obligation requirements.

Employers were also seen to be dissatisfied with the level of administration required of them under the jobactive contract. The requirement to provide wage slips as evidence or needing to confirm job seeker attendance, for example, were not only seen as burdensome, but also as sometimes offsetting the monetary incentive offered to employers through things like wage subsidies.

According to stakeholder responses, employers found that employment services were confusing and difficult to navigate. Employers also expressed the view that their needs and requirements were not being adequately understood or met. These criticisms are similar to those made by employers about the employment services system that preceded jobactive, Job Services Australia.

Employers suggested that providers needed to focus on understanding the requirements and type of work being conducted by them to put forward properly matched job seekers. It was felt that providers had little awareness of labour market trends and the needs of employers, with this being attributed to an overemphasis on compliance and activation in jobactive.

The main suggestion as to how employment services could better meet the needs of employers was through some form of job matching. It was felt that the introduction of a job matching tool could ‘streamline employer recruitment by allowing them access to the most suitable candidates’.

How many employers use public employment services?

Perhaps unsurprisingly given the above findings employer use of jobactive services is low.

According to data from the Survey of Employers’ Recruitment Experiences, in 2019, four per cent of recruiting employers used a Government-funded employment service provider in their most recent recruitment activity. This figure includes Disability Employment Services and Community Development Program providers, but jobactive providers made up most of the total. The corresponding figure for recent years is similar—five per cent in 2018, four per cent in 2017, and five per cent in 2016.

The following table provides a breakdown of employers’ recruitment methods in 2019.

 

While not directly comparable, a survey of employers conducted in 1999 and cited in the Department of Employment and Workplace Relations (DEWR) submission to the Independent Review of the Job Network found that the Job Network (the first iteration of jobactive) was used by 38 per cent of all employers who recruited in the 12 months to June 1999. The survey also found that the Job Network was the third most common method of recruitment used in the year preceding the survey, after newspaper advertising and individually targeted recruitment. As such, it would appear that employer use of publicly funded employment services in Australia has been declining over the past two decades or so.

It is perhaps to be expected that recruitment through online platforms and social media should have grown substantially and displaced the use of newspapers and publicly funded employment services. It is also the case that the limited use of publicly funded employment services is part of a more widespread phenomenon. Dina Bowman and Agathe Randrianarisoa point out that:

Employers’ low level of engagement with publicly funded employment services is not unique to Australia. Studies in Europe show that public employment services are often ‘the last resort’ for employers looking to recruit.

Research suggests that the main reason employers are reluctant to use publicly funded employment services is negative attitudes towards the long-term unemployed, and perceptions that they are deficient, with their main deficiency being a perceived lack of motivation. These findings are borne out by responses to the discussion paper, The next generation of employment services. Most stakeholders who responded to the paper expressed the view that jobactive was held in a dim view, with job seekers in particular expressing frustration that involvement in the system stigmatised them.

NESM changes

Through the NESM, the Government is seeking to improve the services provided to employers in various ways. For example, in response to the demand for a job matching tool a digital platform that enables employers to filter and search for the most job-ready candidates will be made available.

It is intended that under the NESM providers who are being freed up to focus on disadvantaged job seekers will offer tailored support to employers to enable them to fill vacancies. This will involve working closely with employers to understand and meet their needs, building strong links with local community services, and working to tailor pathways for job seekers. The latter could involve giving employers the opportunity to trial job seekers and providing funding and resources to encourage and support employers to take on disadvantaged job seekers.

Comment

The changes being made under the NESM mark something of a return to the public employment services assistance that has been offered in the past, with a stronger focus on employability and the use of publicly funded employment services as a tool of labour market policy.

If employer use of publicly funded employment services is to be increased much will depend on the ability of providers to shift from a work-first and compliance-based focus to helping to improve the human capital of disadvantaged job seekers. It will also turn on providers’ capacity to develop long-term employer strategies and overcome many employers’ reservations about using publicly funded employment services. The biggest determinant of employer use of the NESM will, however, undoubtedly remain the strength of the labour market and the degree to which employers are able to be selective about the job seekers they wish to hire.

Tags: employment

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Flagpost is a blog on current issues of interest to members of the Australian Parliament

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