Use of Contracted Providers to Deliver Public Employment

Use of Contracted Providers to Deliver Public Employment Services WAPES Asia and Pacific Region Workshop 25 -26 November 2009 Seoul, Republic of Korea

Outline of today’s presentation Current Labour Market situation in Australia Overview of Job Services Australia Services for People with Disability Additional Assistance and Training

The Australian economy has performed better than most developed economies in the face of the global recession The seasonally adjusted unemployment rate has increased from a low of 3. 9% in February 2008 to 5. 8% in October 2009 The unemployment rate is forecast to rise to 6 ¾ per cent by the June quarter 2010 Source: ABS Labour Force, Australia, October 2009 (cat. no. 6202. 0).

Australia is the strongest performing of all advanced economies 2 Per cent (GDP growth – Year to June Qtr 2009) 2 0 0 -2 -2 -4 -4 -6 -6 -8 -8 Australia Greece Israel Cyprus Switzerland Korea France Canada Singapore Belgium Hong Kong US Spain Austria Norway Czech Rep. Netherlands Slovakia UK Germany Italy Sweden Japan Taiwan -10 Slovenia -10 Source: Keep Australia Working

Effectiveness of Australia’s fiscal stimulus measures Source: Keep Australia Working

Effectiveness of Australia’s fiscal stimulus measures Unemployment is expected to peak at about 6¾ per cent instead of 8¼ per cent without fiscal stimulus Source: Australian Government, Mid-Year Economic and Fiscal Outlook 2009 -10, p. 13

Employment services in Australia, a little history… 1946 - 1998: Commonwealth Employment Service (CES) - Government run PES 1997 - 1998: established Centrelink and tendered for Job Network 2008: Review of Employment Services 2009: 1 July - Implementation of Job Services Australia

Jul-91 Jan-92 Jul-92 Jan-93 Jul-93 Jan-94 Jul-94 Jan-95 Jul-95 Jan-96 Jul-96 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Cost per Employment Outcome ($) has decreased since the introduction of Job Network in 1998 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 Source: DEEWR administrative systems and post-Program Monitoring Survey

Overview of Job Services Australia

The Australian Government’s Social Inclusion agenda helped inform the review of employment services More needed to be done to assist the most disadvantaged job seekers find sustainable employment. The review of employment services was guided by principles such as: l Early intervention tailored to job seeker needs; l Job seekers who are struggling the most get the most intensive assistance; l An increased emphasis on skills training; and l Minimising administrative “red tape”

Providers have the flexibility to develop individually tailored assistance based on the job seeker’s level of disadvantage • $4. 9 billion over 3 years from 1 July 2009 • Integrated services • “Free” accredited training places • No waiting for services – demand driven • Four employment assistance streams based on job seeker needs

Overview of the Model Job Seeker Disability Employment Services Centrelink JSCI/JCA JOB SERVICES AUSTRALIA Work Ready STREAM 1 JSCI Score: 0 -19 32% job seekers Disadvantaged Job Seekers STREAM 2 JSCI Score: 20 -28 26% job seekers STREAM 3 JSCI Score: 29 + 28% job seekers WORK EXPERIENCE STREAM 4 Referral from JCA 14% job seekers

Job Seeker Classification Instrument (JSCI) The JSCI is a sophisticated profiling tool to classify job seekers according to their level of disadvantage in the labour market. It determines which stream job seekers enter. There are 18 JSCI factors: Age and Gender Recency of Work Experience Job Seeker History Educational Attainment Vocational Qualifications English Proficiency Country of Birth Indigenous Status Indigenous Location Geographic Proximity to a Labour Market Access to Transport Phone Contactability Disability/Medical Conditions Stability of Residence Living Arrangements Ex-offender Status Personal Characteristics

Job Capacity Assessment (JCA) JCA identifies appropriate services for people with disabilities, special needs or other personal factors. Depending on the results of the JCA, job seekers may be referred to Stream 4 services, or other forms of assistance such as Disability Employment Services.

Job Services Australia Steam 1: Job Seeker Disability • Work ready Employment Services Centrelink • Initial interview – develop a resume and provision of local labour market advice. JSCI/JCA • Assisted by Centrelink during first 3 months JOB SERVICES AUSTRALIA • After 3 months – undergo a skills assessment then an Work Ready Disadvantaged Job Seekers intensive activity STREAM 3 STREAM 1 STREAM 2 JSCI Score: 0 -19 JSCI Score: 20 -28 • $11 in the Employment Pathway Fund 29 +10% 28% job seekers 32% job seekers 26% job seekers • Up to $781 in service fees up to 12 months WORK EXPERIENCE STREAM 4 Referral from JCA 14% job seekers • $385 -$440 in Job Placement fees (no outcome fees paid in Stream 1 for first 12 months)

Job Services Australia Job Seeker Disability Employment Stream 2: Services Centrelink • Moderate barriers to employment JSCI/JCA • Providers work more intensively with job seekers to provide assistance tailored to their needs JOB SERVICES AUSTRALIA Work Ready Disadvantaged • $550 in the Employment Pathway Fund Job Seekers STREAM 1 STREAM 2 STREAM 3 STREAM 4 • Up to $885 in service fees for 12 months, including at least JSCI Score: 29 +10% Referral from JCA JSCI Score: 0 -19 JSCI Score: 20 -28 monthly contacts job seekers 28% job seekers 14% job seekers 32% job seekers 26% • $385 -$2800 in Job Placement and Outcome fees WORK EXPERIENCE

Job Services Australia Job Seeker Disability Employment Stream 3: Services Centrelink • Moderate-high barriers to employment JSCI/JCA • Providers work intensively with job seekers to provide assistance tailored to their needs. JOB SERVICES AUSTRALIA Work Ready Disadvantaged • $1100 in the Employment Pathway Fund. Job Seekers STREAM 1 STREAM 2 STREAM 3 STREAM 4 • Up to $1120 in service fees for 12 months, including at least JSCI Score: 29 +10% Referral from JCA JSCI Score: 0 -19 JSCI Score: 20 -28 monthly contacts job seekers 28% job seekers 14% job seekers 32% job seekers 26% • $385 -$6600 in Job Placement and Outcome fees WORK EXPERIENCE

Job Services Australia Job Seeker Disability Employment Stream 4: Services Centrelink • Complex and/or multiple non-vocational barriers to JSCI/JCA employment • Integrated assistance which combines pre-employment and JOB SERVICES AUSTRALIA employment activities tailored to individual needs Work Ready Disadvantaged Job Seekers • Up to $1650 in the Employment Pathway Fund STREAM 3 STREAM 1 STREAM 2 JSCI Score: 29 +10% JSCI Score: 0 -19 JSCI Score: 20 -28 • Up to $2736 in service fees (up to 18 months) 28% job seekers 32% job seekers 26% job seekers • $385 -$6600 in Job Placement and Outcome fees WORK EXPERIENCE STREAM 4 Referral from JCA 14% job seekers

Work Experience Activities • Greater flexibility in the range of activities available to be tailored to meet the job seeker’s needs and the way in which these activities can be combined. • Activities include: Work for the Dole, Green Corps, Voluntary Work, part-time study or part-time work, unpaid work experience placements, Defence Force Reserves, other government programs and participation in non-vocational programs and services (where appropriate)

Features of Job Services Australia include: • an Employment Pathway Plan • an Employment Pathway Fund • 319 000 “free” training places • providers rewarded for working closely with employers • a $41 million Innovation Fund

Job Services Australia can respond to changing labour market conditions • Demand driven, all guaranteed a service • Balance between service fees and outcomes fees • Potential for contract variations – eg, Stream 2 for redundant workers and early school leavers • Price incentives • Technology that facilitates responsiveness – change the system to match policy

Performance Management Framework Star Ratings • 5 star ratings bands • Provider ratings account for differences in job seeker characteristics and labour market conditions • Almost 60 factors are included in the regression model – this is the minimum necessary to enable valid comparisons to be made • Distribution of ratings not fixed

Performance Management Framework Publication of Star Ratings • First star ratings will be published in June 2010 • Site and Employment Service Area (ESA) level ratings • Overall and individual Stream ratings • Provider site ratings released publicly every 6 months • Ratings calculated every 3 months and all provider site and ESA ratings released on the Secure website for information of providers

Compliance Regime • Differentiates between a job seeker intentionally not meeting their obligations and a job seeker who is experiencing exceptional circumstances. • Providers report non compliance to Centrelink • Automatic triggers for Comprehensive Compliance Assessment • 3 No Show No Pay failures or 3 failures for missed appointments within six months • If wilful non-compliance then 8 weeks non-payment period unless job seeker re-engages

Job Services Australia Providers • Most JSA and NEIS providers are not for profit organisations Type of provider Job Services Australia NEIS Government 3 2 Not for profit 71 29 For profit 41 23 Total 115 54

Job Services Australia Providers No. states No. providers 1 79 2 17 3 7 4 4 5 0 6 3 7 2 8 3 Total 115 There are currently 2208 JSA sites Services are delivered in 116 employment service areas, of which 15 are remote

Job Services Australia Providers • The largest 25 providers are responsible for providing services to three quarters of the job seekers assisted through Job Services Australia Provider Proportion of JSA caseload Largest 3 24% Top 10 48% Top 25 75% Source: DEEWR administrative data

Job Placements • 97 490 job placements between July and October 2009 Source: DEEWR administrative data

Services for people with disability • Workplace Modifications • Supported Wage System • Wage Subsidy Scheme • Auslan for Employment • Job. Access

New Disability Employment Services Centrelink Registration JSCI/JCA Program B Employment Pathway Plan For job seekers with disability, injury or ill health Single funding level Flexible ongoing support or exit independent worker For job seekers with permanent disability plus long term ongoing support Funding level 2 For people requiring more intensive support Funding level 1 Flexible ongoing support or exit independent worker Moderate Ongoing Support Employer Incentives Scheme High Ongoing Support

Additional Assistance and Training: Securing Apprenticeships • $9. 7 million to assist apprentices and trainees who have lost their jobs continue with their qualification. • Wage subsidy and completion bonus to employ out-of-trade apprentices or trainees. • $3. 8 billion over four years to streamline the Australian Apprenticeships Incentive Program • 5500 pre-vocational training and support places for vulnerable job seekers • $100 million to support young Australians entering traditional trades this summer

Regional unemployment rate disparity

Additional Assistance and Training: Local Communities • $650 million Jobs Fund • 20 Priority Employment Areas • Local Employment Coordinators l l l Maximise the impact of the Government’s economic stimulus in priority employment areas Establish and work with advisory committees to develop regional employment plans Find new job opportunities and provide support for workers who have lost their jobs

Additional Assistance and Training: Youth • Lift Year 12 or equivalent attainment rate to 90 per cent by 2015 • Every young Australian under 25 guaranteed a school, apprenticeship, training or higher education place. • ‘Learn or earn’ requirements for young people • Education and training most important precondition for income support for under 21 year olds l Those without Year 12 or equivalent must undertake full time education or part time education/training and other activities of at least 25 hrs/week.

Thank you Any Questions? www. workplace. gov. au