Job Services Australia - Roadmap for the Future

Transcription

1 Employment Services in Australia ROADMAP FOR THE FUTURE (DETAILED PROPOSALS)

2 2 CEO Introduction We are pleased with the reception that Employment Services in Australia Roadmap for the Future (2015 and Beyond) has received from members, with the recommendations drawing broad support. The team at NESA has been working hard behind the scenes to put these views across to Government and other stakeholders. We also received feedback that it would be helpful to provide further detail of our thinking. This document does just that. It is also important that we take this opportunity to reiterate our acknowledgement of the challenges facing the sector. Members have told us that the number one issue facing their organisations is financial sustainability. The trend of rising unemployment - including youth unemployment we identified in November has continued. With increasing compliance obligations and a system that was designed for a buoyant economy with a high focus on outcome payments, there have been particular strains on provider budgets. We are seeing the impact with increasing takeovers and mergers. We continue to believe that the fundamentals of the sector are right but that there is room to improve. Maintaining the financial sustainability of the sector, and allowing providers to do what they do best without unnecessary administrative burdens is essential for the economic challenges that we face. We look forward to continuing to work with our members and the Government to ensure that a fit for purpose employment services sector delivers - for job seekers and employers. Sally Sinclar, CEO nesa.com.au

3 3 Summary of NESA Roadmap proposals Focus on employers NESA Recommends: 1. Reducing red tape to assist in engaging employers in the employment services system 2. Better targeting of employment services funding to meet employer needs 3. Incentivising providers to coordinate in meeting employer needs through the Star Rating System 4. Establishing an independent national facilitator for employment services with experience of the industry, for large, national employers 5. Examining how outcomes are defined, remunerated and incentivised through the star rating system, to reflect the high proportion of casual and part-time employment in today s labour market 6. Supporting job services providers to work with employers in job creation strategies 7. A Government-led campaign developed in consultation with industry to promote awareness of Australian employment services and the benefits of workplace diversity. Job seeker servicing NESA Recommends: 8. Connecting job seekers to active and tailored assistance as early as possible to achieve the fastest possible engagement to the labour market and decrease the risks of long term unemployment 9. Increasing the opportunities for welldeveloped and appropriately funded work experience programmes that provide opportunities for on the job skill development and longer term employment 10. Supporting the capacity of employment services providers to maximise the successful transition from welfare to work and improve job seeker skills to better meet employer demands and achieve productivity growth 11. Changing the tools that assess how difficult it will be for a job seeker to find employment (the Job Seeker Classification Instrument) to ensure individual job seeker disadvantage is accurately assessed so that they receive the appropriate service at the right time 12. Better enabling the use of technology to support tailored and flexible delivery of employment services 13. Changing the Learn or Earn requirements so that job service providers are able to work with early school leavers and help them transition into employment or further learning 14. Ensuring a clearer focus on Indigenous job seekers in Job Services Australia (JSA), including national benchmarking and funding for Aboriginal Liaison Officers. Purchasing and contracting arrangements NESA Recommends: 15. Increasing contract lengths (to a minimum of 5 years) to provide greater industry stability and provide annual indexation to recognise cost of business pressures 16. Reducing red tape by moving to an approach to contract management that is focussed on ensuring that providers have accredited quality management systems in place rather than a focus on compliance or catching providers doing the wrong thing 17. Implementing specific red tape reduction measures (outlined under 16.) 18. Maintaining Employment Service Areas (ESAs) to ensure a local focus within contracts 19. Maintaining the current flexibilities around entity arrangements to maintain provider diversity 20. Allowing for greater negotiation between the provider and purchaser over the life of the contract to recognise changing labour market conditions and business needs 21. Ensuring any contract variations which add to the terms of trade are adequately compensated 22. Ensuring purchasing arrangements and funding adequately account for regional and rural operating costs Employment Services in Australia: Roadmap for the Future (Detailed Proposals)

4 4 Summary of NESA Roadmap proposals 23. Immediately reversing changes to Indigenous Employment Programme (IEP) guidelines so that JSA providers with IEP panel status can apply for and deliver IEP programmes to their JSA clients 24. Address the issues that have arisen in transitioning non-remote Community Development Employment Projects (CDEP) Programme to JSA 25. Ensuring that payment and contracting arrangements support the recruitment, retention and development of a skilled employment services workforce 26. Improving access to employment services data by the industry and researchers to support stronger evidence based practice and policy contributions Better Connections NESA Recommends: 27. Better alignment of incentives for Job Services Australia providers to work with Registered Training Organisations (RTOs) to provide training to disadvantaged job seekers that is more flexible, fit for purpose and more closely linked to job outcomes 28. Creating a central portal that links employment services and programme information Background Following an extensive series of calls to the CEOs of NESA member organisations, it is clear that the key issues facing the employment services industry, particularly those with Job Services Australia contracts, are: > Financial sustainability within the current contract, and > The burden of compliance and red tape. Since 2009 the number of providers has reduced from 119 to around 86, largely through mergers and sale of contracts. NESA understands that financial challenges under the current contract are a key driver of this behaviour. Even with these strategies, many remaining providers continue to experience difficulties in sustaining services, indicating on-going instability in the sector. There are a number of related issues leading to this perfect storm challenging the sector. These include the freezing of funding since 2009 while costs including wages and salaries have continued to increase, the flow of job seekers within the current model and the high costs associated with managing contract compliance requirements. The cumulative increase in the Consumer Price Index between September 2009 and September 2013 (latest available data) is 10.9 per cent. 1 The softening labour market also highlights the importance of having an appropriatelyfunded employment services system. Although low by international standards, there has been an upward trend in Australia s unemployment rate, with the most recent figure of 6 per cent in February Current labour market conditions show extreme competition for jobs, with 773,850 job seekers registered as seeking work in JSA and around 165,000 advertised vacancies per month currently. 3 This means there are almost 5 registered job seekers for each vacancy compared with the low of 3.1 twoand-a-half years earlier. 4 This data highlights the importance of the system being able to respond to the changes in the labour market, harness employer demand and support job creation. The incidence of youth unemployment in Australia is significantly higher than total unemployment. In January 2014, youth unemployment for those aged 15 to 19 years, was 16.3 per cent. 5 Youth unemployment has constantly remained at levels of 16 per cent or above since the start of the decade. 6 nesa.com.au

5 5 Background While the youth unemployment rate is nationally high, particular pockets of disadvantage are found across States and Territories. For example in January, Tasmania experienced the highest rate of youth unemployment with almost one in four (23.8 per cent) of year olds looking for employment. 7 It is particularly crucial that young people are connected as early as possible with appropriate and targeted training and employment opportunities to shore up their economic and social engagement with the community. NESA believes that much can be gained by going back to basics, along with adequate funding. The Roadmap document identified four key areas warranting further attention: > Focus on employers > Job seeker servicing > Purchasing and contracting arrangements, and > Better connections These key areas also incorporate the directions articulated by Government to date for 2015 and beyond, including employer engagement, Work for the Dole type programmes, and red tape reduction. NESA strongly believes that adjusting the system to create a greater focus on quality and continuous improvement is needed. While activation is helpful in ensuring accountability of job seekers, attendance requirements inadvertently create a focus on processes rather than outcomes. There are significant opportunities to reduce red tape, for example through new technologies and existing information collected by other agencies. We also need to ensure that performance management occurs within the spirit of the contract. Our recommendations include areas that would mean increased investment in employment services. However, given that approximately half of staff time is spent on administrative functions, freeing up providers to do what they do best would significantly improve the capacity of the system. Given the interconnection between employment participation, welfare reform and economic development, we believe that a holistic approach to addressing these issues is best. Therefore our recommendations touch on some areas that are currently outside of the employment services framework. The recommendations in our roadmap provide the platform for positioning employment services in Australia for 2015 and beyond. Employment Services in Australia: Roadmap for the Future (Detailed Proposals)

6 6 Focus on employers While 1.7 million job seekers have been placed into employment since 2009 (as at October 2013), NESA agrees that there needs to be a much stronger focus on the demand side to meet employer needs and increase employer engagement. NESA recommends: 1. Reducing red tape to assist in engaging employers in the employment services system. > Program guidelines mandate that for every job placement, documentary evidence must be collected from the employer. Some of this evidence can be verbal, while other elements need to be written. There are also requirements to confirm 13 and 26 week outcomes with employers. These requirements have become substantially more prescriptive in the current contract and are impacting on employer engagement and retention. Where providers have relationships with medium and large employers who offer a high volume of opportunities, current requirements are most intrusive on placements and outcomes. > The industry understands the need to validate outcomes. However better use of information and data collected through existing mechanisms such as income support declarations, off-benefit results and tax office records would considerably reduce the duplication of effort and administrative burden for all stakeholders, including employers. 2. Better targeting of employment services funding to meet employer needs. > While Job Placement guidelines indicate the services required to be delivered to employers, payment levels are determined by the eligibility of the job seeker placed, rather than the services delivered to the employer. The limited resource investment combined with the program settings have fostered a supply push approach rather than matching supply with demand. For example, with only $11 available for supporting Stream 1 job seekers under the Employment Pathways Fund, there is very little opportunity for these job seekers to up-skill or re-skill to meet employer requirements. We also need a clearer, shared understanding of what job ready means. 3. Incentivising providers to coordinate in meeting employer needs through the Star Rating System. > The Star Rating System is defensible, with a sound mathematical basis, and essentially the best methodology to normalise each site and contract ESA. However at present, the competitive nature of the scoring system generally discourages provider collaboration. Enhancement of the Star Rating System to increase collaboration would: - Drive JSA collaboration by rewarding brokerage between JSA providers - Drive an outbound employer servicing approach, and - Increase employer respect for and use of employment services. > This can be practically achieved by contractually rewarding both the provider who supplies the job seeker and the provider who is working with the employer equally, and allowing both providers to negotiate a financial arrangement and lock it into the Employment Services System (ESS). An example of how to structure the measurement system follows: nesa.com.au

7 7 > Collaboration must give a benefit to the organisation that provides the job seeker to fit the employment need and equally the provider who sources the vacancy and manages the relationship > Award star ratings equally (effectively providing a bonus to reward collaboration) > For example, Provider A sources 10 vacancies from Employer X, however Provider A was able to source only 7 suitable job seekers for the employer from their caseload. Provider A then brokers the remaining 3 roles to Provider B. Provider B utilises ESS to link the job seekers to Provider A s vacancies. Provider A completes the referral and placement of candidates > Provider B s 3 clients remain with this provider, given Provider B may have invested significant energy and resources into getting a job seeker job ready, particularly where the job seeker has specialist post placement needs or supports > Provider A remains the employer s provider and point of contact and the primary contact for their 7 job seekers. Provider B remains the point of contact for their 3 job seekers and liaises regularly with Provider A to assist with outcome tracking > Provider B retains a percentage of the revenue and both providers receive equal star rating benefit > Provider A receives recognition for the 10 placements and the outcomes derived > Provider B receives full recognition for their 3 job seeker outcomes derived from the placements > The percentage of revenue retained by Provider A could be from 0% to 100%. It would be a negotiated arrangement between the providers that would be locked into ESS at point of agreement. This makes the arrangement commercial and encourages both to take advantage of the opportunity to solve the employer need with an understood star rating recognition. Collaboration then actually provides a bonus, giving Provider B a benefit they would not have otherwise received > Employers will seek out providers who deliver best fit candidates > Employer needs are fully satisfied and the reputation of the industry is enhanced > Employers deal with a single provider > Government employment services are seen to be a solution (one stop shop) without the need to approach multiple providers. Employers will deal with the provider/s who will collaborate to best solve their requirements > This type of arrangement drives employment services providers to be employer solutions focused and seek out and service vacancies > It creates competitive market focus > The Star Rating System takes care of the performance measurement, rewarding providers who best solve local labour market needs within the weighted Government measurement framework. Employment Services in Australia: Roadmap for the Future (Detailed Proposals)

8 8 Focus on employers nesa.com.au 4. Establishing an independent national facilitator for employment services with experience of the industry, for large, national employers. > Large employers are diverse and operate across a range of industry sectors, with quite diverse skill and labour needs across their various business streams or divisions. Likewise, large employers have varied recruitment strategies. Some recruitment strategies are centralised, others are devolved to local divisions or branches or as is often the case, there are a mixture of approaches within the organisation. Contractual arrangements need to reflect, support and reward this integrated approach. > The development of an independent national facilitator to enable sustainable working partnerships between large employers and providers of Australian employment services has potential to enable national partnerships for local solutions. We consider that this should be delivered by an entity which is neutral and without a direct service delivery role in employment services and independent of contract administration. > An independent national facilitator would enhance the current service delivery that provides services to employers and consequently job seekers through the Job Services Australia network. It would attract vacancies from employers who, for many reasons, do not currently use JSA. > The core purpose of an independent national facilitator would be to facilitate relationships between the demand and supply side large employers and employment services providers. An important requirement for the function is a solid understanding of both employers and employment services providers, with a focus on relationship building. > The role would not impact on existing local, regional or national relationships, but rather build new relationships with employers, and facilitate relationships between employers and providers. This role would encourage job creation activities, and also include working with multiple providers to share placements. > Importantly, an independent national facilitator would have to be able to provide extensive coverage to ensure understanding of local labour market dynamics, given the diversity of recruitment approaches discussed above. > The independent national facilitator would be structured as a lean organization, and would improve the efficiency and effectiveness of the system. > Alternative approaches could include support for partnerships between employer organisations and job service providers and their representatives to promote shared understanding and relationships, or through funding for forums that bring together employers and job service providers. 5. Examining how outcomes are defined, remunerated and incentivised through the Star Rating System, to reflect the high proportion of casual and part-time employment in today s labour market. > There is a need to ensure that the employment services system effectively caters for those who are not in full-time employment. The nature of work and the workforce in Australia have changed considerably over the past three decades. There has been an increasing diversity of employment arrangements and significant increases in the extent of part-time and casual employment. > In November 2012 close to one in five (19 per cent) Australian workers was a casual employee. 8 Part-time employment has also been a prominent feature of the Australian labour market over the last few decades. In October 2013, part-time employees comprised 31 per cent of the labour force. 9 > Currently JSA payments are structured so that employment outcomes that are not full-time or at a particular payment level are treated as pathway outcomes. These are incentivised at a lower rate than offbenefit employment outcomes and they also have a lower value in the star rating system. Given that part-time and casual employment form high proportions of employment particularly in certain industries such as hospitality, this may be

9 9 a disincentive for JSA providers to focus on these industries. There needs to be greater consideration of how to structure payments so that part-time and casual employment arrangements are properly accounted for in the system. > This recommendation would be supported by funding employment services to play a greater role in career development, as outlined in Recommendation Supporting job services providers to work with employers in job creation strategies. > Job seeker demand for employment services increases at times of higher unemployment. The current system of working with employers focuses primarily on marketing to existing vacancies and small levels of job creation through reverse marketing. There is an opportunity to expand on what some employment services providers already do adopt a business brokerage approach to provide business support services. > The Job Network Better Practice Report (September 2006) highlighted the influential role in high performing sites of Business Development Officers. Developing relationships with business, generating repeat business and working proactively on developing candidates to meet emerging labour market demands requires a strategic rather than a transactional approach. It also requires funding that recognises the complexity of the work required to contribute to business development. > Particularly in areas where there are limited labour market opportunities, NESA believes that the development of micro enterprise ventures can lead to job creation. In these circumstances, NESA recommends that assistance measures be provided to identify potential economic development opportunities, support feasibility studies of identified opportunities and facilitate the establishment of the initiative. 7. A Government-led campaign developed in consultation with industry to promote awareness of Australian employment services and the benefits of workplace diversity. > Consultation with employers, business and industry stakeholders indicates that there is limited awareness of employment services programmes and that most became aware only through direct approaches by providers. This is in stark comparison to the establishment of the Job Network when the then Government invested significantly in an employer awareness campaign. > This campaign could point the benefits to employers of engaging with the system, as well as the broader benefit to Australia of having as many people participating in work as possible. It would also need to be transparent around the role of the system in supporting disadvantaged job seekers, so that expectations are managed appropriately. Employment Services in Australia: Roadmap for the Future (Detailed Proposals)

10 10 Job Seeker Servicing NESA recommends: 8. Connecting job seekers to active and tailored assistance as early as possible to achieve the fastest possible engagement to the labour market and decrease the risks of long term unemployment > The longer an individual is disconnected from the world of work the higher their chance of becoming long term unemployed and experiencing social, health and economic impacts > While job seekers are connected quickly to the Employment Services system once they are eligible for welfare payments, there can often be a substantial delay between job loss and payment eligibility, compounding the effect of disconnection to the labour market > Stream 1 servicing (particularly Stream 1 Limited) offers little support to those that are newly unemployed. This often results in job seeker frustration, and complaints about service quality and effectiveness. The lack of funding to support job seekers in this phase fails to recognise the complexity of current labour market conditions, including structural changes to the nature of work which often require significant re-skilling of job seekers to meet employer demands > Providing increased services and support to those that are newly unemployed would increase early re-engagement in work, and reduce longer term benefit dependence and the impacts of unemployment > While increased funding is required this would need to be supplemented by adequate placement, outcome and performance framework supports. 9. Increasing the opportunities for welldeveloped and appropriately funded work experience programmes that provide opportunities for on the job skill development and longer term employment. > NESA has been reviewing Australia s experience to date with work experience programmes and we have identified a number of desirable design principles to inform the development of Work for the Dole type programmes. These are: - Adequate resources and sufficient critical mass of caseload numbers to deliver projects of sufficient diversity and quality that will engage participants and community organisations; - A degree of flexibility for providers in Work for the Dole type programme activity design and delivery; - Appropriate key performance indicators that recognise and include community and participant feedback, to optimise future Work for the Dole type programme project delivery; - Some discretion about mutual obligation for providers, within established parameters, to judge attendance requirements and conditions for people required to undertake Work for the Dole type activities; - The avoidance of red tape and burdensome reporting and evidence requirements in favour of a riskmanagement approach and the lighter touch envisaged with the introduction of the Quality Framework for employment services in Australia; - A policy and program development support function in the Department, including an evaluation strategy, which should utilise feedback from participants and community organisations about the benefits of the programme and how it could be improved. nesa.com.au

11 Supporting the capacity of employment services providers to maximise the successful transition from welfare to work and improve job seeker skills to better meet employer demands and achieve productivity growth. > Connecting to the workforce is often only the first link in the chain of a person s working life. Assistance is often required to support ongoing success in that role, participation in opportunities for career advancement, or to change roles. While many of us are able to navigate this process easily through our own support networks, others may not be in such a fortunate position. This can often lead to problems in maintaining work, or disengagement from the labour market due to dissatisfaction and cycles of unemployment > Funding employment services to take a greater role in career development would provide better support to job seekers and increase long term employment placements > It would also provide support to employers that is more in line with their expectations of service provision > Supporting individuals to move beyond their introductory/initial role has the added bonus of opening up more entry level positions for other job seekers looking to enter the workforce. 11. Changing the tools that assess how difficult it will be for a job seeker to find employment (the Job Seeker Classification Instrument) to ensure individual job seeker disadvantage is accurately assessed so that they receive the appropriate service at the right time. > The current JSCI tool is based on an assessment of relative disadvantage and is not an absolute assessment tool. This means that while the impact of barriers on the individual and their ability to engage in work may be significant, the tool will only assess how this might relate to others in the programme, which is skewed by the higher number of job seekers with significant barriers to employment now participating in services > It is also a tool which is initially often conducted by phone when the job seeker first applies for payment and therefore may not be comfortable divulging intimate details of possible barriers to employment. Once these barriers come to light during the course of servicing by the provider, the JSCI setting and policy surrounding review of job seeker circumstances make it very hard to achieve greater service support for the job seeker even when evidence supports the existence of significant barriers to employment > Previous reviews of the JSCI have recommended greater input from providers, a longer period of time to collect evidence and conduct assessments, and better alignment of assessment outcomes to individual job seeker needs. NESA continues to agree with these recommendations. 12. Better enabling the use of technology to support tailored and flexible delivery of employment services. > Employment services provision could be much more efficient if greater use was made of technology, including application software designed to run on smartphones and other mobile devices. This could assist in managing appointments, and allow better management of time following cancellation of appointments. An application for job seekers could for example prompt attendance at appointments, provide the opportunity to make or amend appointments (subject to attendance rules), and simplify reporting of changes in circumstances > Better use of technology could also help in reducing red tape, for example through the use of digital signatures for evidence recording and electronic recording of attendance (by exception). Employers could also be linked directly with providers for vacancy lodgement and servicing > While there is much benefit that can be gained from better use of technology, it is also important to ensure that there is an appropriate balance between face to Employment Services in Australia: Roadmap for the Future (Detailed Proposals)

12 12 Job Seeker Servicing face contact and the use of technology, particularly in the early stages of job seeker engagement with a provider. Greater flexibility could be achieved once a relationship has been established > A quality assurance portal could be established to give providers the same monitoring capacity and notification of red flags as those viewed by the Department. This would allow preemptive self-reporting and create the capacity for pre-emptive quality assurance management at site level, reducing costs to providers and avoiding non-compliance and refunds. 13. Changing the Learn or Earn requirements so that job service providers are able to work with early school leavers and help them transition into employment or further learning > Learn or Earn Policy was implemented in 2010 so that young people under 21 without Year 12 or equivalent are required to be in education, training or working to maintain eligibility for income support > While the policy has merit, the limitation on interactions with employment services can negatively impact on engagement and participation over the longer term. These limitations should be removed to improve the opportunity for disengaged young people to achieve meaningful employment > Those not in employment, education or training (NEET) are particularly vulnerable to economic and social disadvantage. In January 2014, in addition to the high numbers of young people aged who were not in the labour force (655,000), a further 82,800 (or 5.6 per cent of the year old civilian population) 10 were not in employment, education or training. Those not on income support will not be in receipt of employment services and may fall through the cracks. These young people should be eligible to receive support regardless of their income support status. 14. Ensuring a clearer focus on Indigenous job seekers in JSA, including national benchmarking and funding for Aboriginal Liaison Officers. > The majority of Indigenous job seekers are in Job Services Australia, reflecting that the majority of Aboriginal and Torres Strait Islanders live in urban and regional communities. While NESA understands that the outcomes for Indigenous job seekers in JSA are good compared to other programmes, there is little transparency around what is working well > Despite the importance of Job Services Australia in delivering employment services to Indigenous job seekers, there is less of a direct focus on Indigenous job seekers in JSA than in previous contracts > The experience of our members is that employment services work best when individuals needs are front and centre and there are direct linkages to training and other support services. To effectively assist Indigenous job seekers to access sustainable employment and enjoy the same opportunities as others, they must be afforded a level of service that meets their individual needs, takes into account their cultural differences, and allows interventions to be tailored to their specific circumstances > The distribution of Indigenous job seekers in JSA is concentrated in Stream 3 and 4 (70 per cent). This supports the need for Indigenous job seekers to have high levels of individualized support and improved integration of services to assist in their transition to meaningful and sustainable employment. Individual case management is particularly important for the very long term unemployed > Diversity of providers is one of the key strengths of the current system and is critical to job seeker and employer choice, and provides for the creation of specialist expertise to be targeted to individual cohorts. nesa.com.au

13 13 Purchasing and contracting arrangements NESA Recommends: 15. Increasing contract lengths (to a minimum of 5 years) to provide greater industry stability and provide annual indexation to recognise cost of business pressures > The majority of member organisations have highlighted to NESA that the biggest challenge that they face is financial sustainability. Three year contracts make it difficult to negotiate affordable leases. Further, providers have not been compensated for increases in the cost of doing business. Compliance costs have also increased significantly, with additional staff often required to manage the complex administrative requirements. 16. Reducing red tape by moving to an approach to contract management that is focussed on ensuring that providers have accredited quality management systems in place rather than a focus on compliance or catching providers doing the wrong thing. > At the commencement of the Job Services Australia contract, an Employment Services Charter of Contract Management was put in place with the objective of creating a new way for the then Department of Education, Employment and Workplace Relations (DEEWR) to work in a cooperative, collegiate, strategic partnering relationship with providers to achieve our mutual goals. The Charter has fallen out of use during the contract period, and NESA believes it is essential that a refreshed Charter forms a central part of the management of the next contract > The industry notes that the Employment Services Deed (the Deed) between the Australian Government and Providers is predicated on working in partnership to drive performance and continuous improvement in the delivery of quality services to job seekers > The industry understands the need for the Australian Government to ensure that JSA providers comply with the terms and conditions of the Deed and that all claims for payment submitted by providers comply with those terms and conditions and with the spirit of the contract > The Department of Employment is currently conducting a Pilot of its draft Quality Assurance Framework (QAF). This Framework aims to implement a simpler, more efficient means of assessing the quality of services delivered by providers. The QAF requires providers to achieve accreditation against an approved accredited quality management system and also achieve accreditation against the Department s own Quality Principles > The industry supports this move to the implementation of the QAF but recommends that the quality agenda continue to be driven by the industry. The industry also supports the limitation of Quality Standards approved by the Department for the QAF to those that have relevance to the employment services industry. NESA has developed accreditation standards for industry by industry, the Employment Services Industry Standard (ESIS). ESIS is directly relevant to the needs of employment services providers and closely aligned to the Department s QAF. ESIS is internationally recognised, through the endorsement of the Joint Accreditation System of Australia and New Zealand (JAS-ANZ) > Accreditation to a recognised Quality management system requires the provider to have efficient and effective systems in place to manage and continuously improve all aspects of their business > The industry supports a positive approach to contract management that is focussed on ensuring that providers have in place effective and efficient quality management systems rather than an approach to contract management that is focussed on compliance measures Employment Services in Australia: Roadmap for the Future (Detailed Proposals)

14 14 Purchasing and contracting arrangements > The industry believes that a focus on compliance measures as a means of contract management is akin to a focus on catching providers doing the wrong thing and encourages a culture where quality can be inspected in through departmental monitoring activity rather than built in through a systematic and organisational wide approach to quality management. 17. Implementing the following specific red tape reduction measures > There are currently over 130 payment points for Job Services Australia providers. Red tape would be reducing by minimising the overall number of payments > Moving to claiming by exception for service fee payments could reduce the number of transactions required by as much as 90 per cent > Changes to job placement and outcome evidence requirements would not only significantly reduce provider administrative costs, but would also alleviate much of the burden placed on employers related to documentary evidence > By increasing service fees via the recalibration of money currently allocated to and drawn down through the Employment Pathways Fund (EPF), and bringing items such as additional contacts, post placement support and reverse marketing into core servicing requirements, the administration burden of managing the EPF would be greatly reduced > Improving the tools available to manage Employment Pathway Plan requirements would significantly reduce the current time taken to review each individual plan to support service and other fee requirements > Full integration of the Employment Services, Centrelink and Australian Taxation Office systems would provide greater transparency around employment, earnings and outcome achievement, and decrease administrative requirements on job seekers, employers and employment services providers. 18. Maintaining Employment Service Areas to ensure a local focus within contracts > The ESA model has facilitated localised and flexible workforce solutions that meet the needs of local areas, employers and job seekers > Maintaining ESAs would further aid with ensuring stability and continuity of localised services and networks in 2015 contracts > Significantly, considerable data for ESAs has been collected including the number of people in receipt of Centrelink benefits and engaged with Job Services Australia. Consequently, this data highlights employment and economic development issues for individual ESAs > Further, ESA data can be aligned with economic and social indicators from ABS Statistical Local Area data, which can assist providers and government with planning successful outcomes within local employment and economic development parameters. 19. Maintaining the current flexibilities around entity arrangements to maintain provider diversity > The current contracting arrangements allow for a wide variety of entity types to bid for and win employment services business > This includes not only not for profit and for profit providers, but also small, medium and large organisations, consortia and prime contract holder arrangements. Maintaining this flexibility is important as it ensures that there are providers in the market that are able to meet the unique needs of local labour markets and provide the required coverage to meet government and job seeker needs. nesa.com.au

15 Allowing for greater negotiation between the provider and purchaser over the life of the contract to recognise changing labour market conditions and business needs > There is currently very little room for changes to be made within the life of the contracting arrangements for employment services. Business reallocation processes meet government contestability requirements and business sales or closure can be undertaken for those looking to exit the market completely. However it can be difficult for providers to negotiate changes in terms that are based on their business needs > Increasing the opportunities for greater negotiation would lead to provider efficiencies, and ensure greater value for money for government. For example in areas where fulltime sites are no longer viable for operation due to case load numbers, it should be easy for providers to make changes to the status of site presence to ensure they are able to remain viable and are not having to allocate funds to unnecessary staffing to meet contract opening hours requirements. 21. Ensuring any contract variations which add to the terms of trade are adequately compensated > Since the JSA contract began in 2009 there have been (to date) seven General Deed Variations (GDVs). In the majority of cases these changes have resulted in increased contract delivery requirements for providers, but have not included any increase to the fees available to deliver the required tasks or services. In fact the fees available in some instances have been reduced > If additional functions are required to be delivered by providers, it is important that these are costed and compensated to ensure that funding is adequate across the contract. Increased requirements without compensation ultimately affect the job seeker and employer through increased cost of service delivery. 22. Ensuring purchasing arrangements and funding adequately account for regional and rural operating costs > The costs of service delivery are not uniform across the country. Some locations have higher costs, particularly in relation to: training delivery due to limited infrastructure availability; delivery of other services including opportunities for participation in meaningful work experience programs; and increased costs of premises to house JSA providers > Regional and rural providers have indicated that although they may be performing well against Star Ratings, they can be financially challenged due to their particular case loads and localised labour market conditions > NESA recommends implementing an approach similar to that which was utilised under the previous Disability Employment Network, where locational disadvantage payments were made based on ARIA (Accessibility/ Remoteness Index of Australia) definitions for outlets and job seekers. This funding included additional loadings of 10 per cent for those living or operating in regional areas and 20 per cent for those in rural areas > An alternative approach would be the return to a system of locational payments allied to the model used for Employment Services Contract 3 (ESC3) where locational loadings were paid to providers for job seekers who were identified as having a locational disadvantage. Employment Services in Australia: Roadmap for the Future (Detailed Proposals)

16 16 Purchasing and contracting arrangements 23. Immediately reversing changes to Indigenous Employment Programme (IEP) guidelines so that JSA Providers with IEP panel status can apply for and deliver IEP programmes to their JSA clients. > Under the new IEP guidelines, JSA providers are excluded from using IEP funds for services delivered by them to their own clients. This means that Indigenous people are excluded from outcome bearing opportunities because of their selection of JSA provider. While NESA appreciates the need to utilise IEP funds for additional services outside of existing services to clients, there are limitations in locating IEP Panel members that are prepared to undertake projects in isolated communities. In some communities the provider is the one stop shop and this policy change has meant such organisations are now disadvantaged > NESA therefore supports the immediate return to the original guidelines allowing JSA providers with IEP panel status to apply for and deliver IEP programmes to their JSA clients with emphasis being placed on the integrity of complementary services rather than of assistance/funding. 24. Address the issues that have arisen in transitioning non-remote Community Development Employment Projects (CDEP) Programme to JSA > The current non-remote CDEP contract is due to expire on 14 June It is important to review activities that are presently working well in communities so that lessons are learned and implemented > In anticipation of non-remote CDEP transitioning to JSA it is important to address the following: a. Better incentivise JSA Involvement. To increase JSA engagement in projects, there is a need to ensure that JSAs are appropriately incentivised to play an active role. b. Increase participant payments. Participants are classified as employees, with consequential mandatory workers compensation, leave and superannuation requirements. However there is currently no budget allowance for these additional costs to providers, which means that organisations may risk running these programmes at a loss. c. Improve the CDEP Manager Reporting Tool. This tool exclusively caters for wage payment information, with no allowance for refunds (which is a necessary component of the system). This results in significant additional resources being spent to maintain necessary additional information in spreadsheets. This is a costly administrative component for providers which is not allowed for in the Grant Funding Contract. d. Increase relevance of training. There is also an issue around the nature and relevance of training being undertaken as an essential part of the requirements for participation in an employment or training activity. This aspect needs a rigorous review, so that relevant foundation and core skills are built, with an individual approach taken to meet the needs of job seekers. e. Community Development Funding. There is currently no funding for community projects in non-remote locations. While there is a framework for funding of agreed community projects in the RJCP model, there isn t an equivalent resource for non-remote locations, for instance, Walgett. The communities in some non-remote regional locations suffer the same hardships and confront the same barriers as RJCP locations. There is a role for Government to support the empowerment of communities by providing resources to support valid community-selected projects to engender self-respect and pride. nesa.com.au

17 Ensuring that payment and contracting arrangements support the recruitment, retention and development of a skilled employment services workforce > Having a highly skilled and adaptable workforce is something that all industries aspire to, and in a human services industry such as employment services that works with our most vulnerable citizens, it is essential > NESA has been surveying a range of workforce issues and has been heavily engaged in the delivery of organisational and professional development to the employment services industry since inception. Survey results reaffirm that employment services has a skilled and experienced workforce, that there are career paths within the industry and providers are investing in professional development. We note that a large proportion of staff have achieved their highest level of qualification while in employment services > However, a major threat to the skills and stability of the employment services workforce is capacity of providers to meet growing wage demands to successfully compete for and retain skilled staff. This is particularly challenging given the financial challenges of the current contract and the future uncertainty > Providers also need to be able to meet the ongoing training and development needs associated with the delivery of employment services. A number of providers noted the level of resource investment required for training in processes and maintaining currency of knowledge. This is particularly the case given the detailed knowledge required, exemplified by the 3000 pages of guidelines, which until recently were updated very frequently. Providers reflected that this reduced capacity to focus more heavily on practice improvement which would ultimately contribute more to the effectiveness of the framework and quality of services > The Department of Employment provides the industry with learning and development largely through the Learning Centre, webinars and LiveMeets. While these are valuable and effective resources they are primarily targeted at delivering content related to programme requirements. There is a need for a more substantial focus on practice development > NESA has established the Employment Services Professional Recognition Framework (ESPRF) to guide and support professional development and career pathways in the industry. This framework was developed through an industry working group and included analysis of roles aligned to accredited employment services qualifications. One of the aims of ESPRF is to foster the employment services workforce to being more proactive in their career pathways and professional development. Through building the community of practitioner s engaged in this framework we intend to build strong communities of practice to share and promote better practices. 26. Improving access to employment services data by the industry and researchers to support stronger evidence based practice and policy contributions > NESA considers that greater focus on and collaboration on identifying and supporting best practice is needed. We have an IT based employment services system collecting incredible amounts of data however very little of it is available to the industry or the public more broadly to assist in research and development. Increasing data availability will lead to better evidence based research, better practice and ultimately better outcomes. We also consider that improved research partnerships and identification of good practice would assist in fostering innovation and cross sector collaborations. Employment Services in Australia: Roadmap for the Future (Detailed Proposals)