Workforce Australia – Provider Snapshot

This briefing explains the changes to employment services providers that will accompany the transition to Workforce Australia from July 2022.

In October 2021 the Government engaged in a procurement process for the New Employment Services (NESM) including for a for panel of providers for Workforce Australia (which replaces jobactive in July 2022). As a result of the process the government has announced the providers of Workforce Australia services.

This snapshot provides preliminary high-level analysis of the outcomes of the process and the organisations who have been successful in obtaining a license to provide Workforce Australia services. This analysis is based on our comparison of the published list of successful license-holders in each region with the list of jobactive providers who held contracts in the last Department of Employment ‘Star Ratings’ publication (see note 1 below for more information on this).

Key findings

The total number of licenses/contracts has reduced from 182  in jobactive to 129 in Workforce Australia, reflecting  the fact there will only be half the number of people using these face-to-face services in the New Employment Services model (see note 2 below).  There has been growth and losses in the number of licenses for some existing jobactive providers. There has been a shift of licenses from some of the larger for-profit organisations to some of the other for-profit providers of jobactive and Disability Employment Services.  The ratio of not-for-profit to for-profit providers has remained at around two thirds – so there there is a split of 51 licenses to for-profit versus 78 licenses for not-for-profit organisations. There has also been a significant reshuffle of local providers in some employment regions.

The first chart shows the number of providers secured more licences/contracts for Workforce Australia and how this has changed from jobactive.

 

The next chart shows how some jobactive providers secured less licenses in Workforce Australia. It shows how some of the large providers of jobactive have shrunk significantly.

The are 13 new entrants and providers that have expanded appear to have increased the footprint of Disability Employment Service, apprenticeship and training providers in Workforce Australia services.

There has been some significant change in providers across the 51 employment regions in which jobactive and Workforce Australia provide employment services. The following chart shows how the numbers of providers have shifted between these employment regions.

Workforce Australia has involved the introduction of providers who are specialists in some locations which was not the case in jobactive.  The following chart shows how many providers have specialist licenses.

Not-for-profit vs for-profit providers

The following chart shows the number of licenses that were lost and gained by whether the organisations are not-for-profit or for-profit providers.

Conclusion

Our analysis suggests the new system has not resulted in further consolidation of the number of providers. This means there has not been an increase in the size of large providers and the elimination of smaller providers. However, there has been some significant change of licenses and regions for all providers regardless of size.

More data on the actual allocation of numbers of participants and sites is needed to assess whether or not the tender meets our objectives for the new model. ACOSS’s view is that providers offering employment services should as far as possible:
• be grounded in local communities and have local level labour market knowledge and connections; and/or;
• specialised expertise in assisting a particular group (such as new migrants); and
• demonstrated capacity to assist people who are long term unemployed and otherwise disadvantaged in the labour market to secure decent jobs; and
• be motivated by a desire to reduce unemployment and social and economic disadvantage rather than profits.

How the tenders were assessed

A slimmed down version of the tender application process involved a much shorter than previous tender application form. This meant there was less reliance on examining the extensive written accounts of what providers claimed to be able to offer in the NESM, than on other aspects of the evaluation. The evaluation proceeded in the stages as per below.
Staged approach to evaluation:
• Stage 1 – Initial screening
• Stage 2 – Assessment of responses against selection criteria
• Stage 3 – Financial viability assessment
• Stage 4 – Value for money assessment
• Stage 5 – Negotiations and final decisions
From the DESE presentation on the RFP here.

The selection criteria were:
1 – Organisational capability (20% weighting)
2 – Tailored services capability (40% weighting)
3 – Local Knowledge and Connections capability (40% weighting)

Related information

Mutual obligations and the New Employment Services model
More information on the New Employment Services Purchasing process

Notes

  1. While every care has been taken in compiling this analysis there may be some minor date discrepancies due full data not being available to us. We note there may be some limitations in our analysis because the published license data is not reliable as an estimate of the total number of locations and numbers of participants compared to jobactive. For example, some licencees may have more than one site in a region and some sites may assist more people. The best measure of the overall market change would the share of people in each region assisted by each provider.Secondly, some Workforce Australia providers will have specialist licenses in employment regions, where caseloads might be smaller or just for specific locations than might be the caseload for the other licenses.
  2.  It should be noted that the overall number of people assisted by Workforce Australia providers in the new system is lower than in jobactive, since around 50% of people in the system are expected to use online services.

Further background on the New Employment Services Model

I Want to Work report

ACOSS Submission: Point-Based Activation in the New Employment Services

201208 ACOSS submission – new employment service payment model

ACOSS submission employment service licensing

ACOSS submission on the NESM Exposure Draft

ACOSS Submission on the SPROM Bill

ACOSS Submission on Future Employment Services