Background on employment services in Australia
Employment services in Australia have a long history of providing effective labour market assistance and improving outcomes for job seekers and employers.
The contracted and managed market model was fully underway in 1998 when the government put out an open tender for employment services.
Over time the various contracts have evolved and in some cases specialised (such as with disability employment services). As contracts have changed the number of provider organisations has contracted. For example, there were 300 providers delivering the various Job Network contracts from 1998 - 2009, 141 providers delivering the Job Services Australia contracts from 2009 - 2015, and now there are 44 providers delivering jobactive across 51 Employment Regions from 1700 site locations nationally.
There is a mix of not-for –profit and for profit providers delivering services across all types of employment service programmes. There is also a mix of large and small local providers.
The model for the major programmes involves provider organisations tendering to provide services in specific sites to win contracts that include allocated market shares. Periodically the Government undertakes ‘business reallocations’ according to performance and the ‘star ratings’. Providers are paid a mix of outcomes based fees and administration fees.
Demand: Employment service funding is largely demand driven and a down turn in the economy will likely increase unemployment and therefore the number of jobseekers. There is a strong focus currently on improving employment outcomes for Indigenous people, supported by social procurement initiatives. There is also some anticipated growth areas for people requiring labour market assistance. These include migrant and refugee populations. Mature workers who have been retrenched. Other displaced workers due to the rapidly changing structure of the economy. For example, digital disruption of some business and work models, and automation, will likely increase unemployment amongst some cohorts.