National Employment Services Australia by mB83oa


									        NATIONAL EMPLOYMENT
Response to the Advisory Panel on Employment Services
  Administration and Accountability Discussion Paper
                      - February 2012 -

            National Employment Services Association Ltd

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Table of Contents

 About National Employment Services Association ................................................................................... 3
 Introduction ..............................................................................................................................................4
 Topic 1 - General: Outcomes-focused administration ...............................................................................6
 Topic 2 - General: Risk-based administration .......................................................................................... 13
 Topic 3 - General: Tailoring, personalisation ........................................................................................... 15
 Topic 4 - System design: Empowering job-seekers..................................................................................20
 Topic 5 - System design: Innovation of practice.......................................................................................22
 Topic 6 - System design: Accreditation and auditing of providers ...........................................................24
 Topic 7 - System design: Professionalising the workforce........................................................................28
 Topic 8 - System design: Length of contracts and predictability of funding ............................................ 32
 Topic 9 - System design: Dual providers .................................................................................................. 34
 Topic 10 - System design: Stream structure............................................................................................. 35
 Topic 11: System design: Red-tape reduction advocate........................................................................... 36
 Topic 12 - System design: Managing changes to the system ................................................................... 38
 Topic 13 - System design: Conflicting DEEWR roles................................................................................. 39
 Topic 14 - Data collection........................................................................................................................42
 Topic 15 - Duration of data management ............................................................................................... 43
 Attachment 1 - Career Advancement Model........................................................................................44

             National Employment Services Association – Response to the APESAA Discussion Paper                                                 2
About National Employment Services Association
The National Employment Services Association (NESA) was established in 1997 to be the inclusive voice of providers
of Australian employment services following the announcement of major reform to Australia’s Commonwealth
employment services. NESA is the only peak body which represents community, private, public and Government
sector providers and delivers representation regarding all the Programs and the overall interactions and functioning
of Australian employment and related services framework.

NESA represents and advocates for the development and continuous improvement of the Australian contracted
employment services industry. Our priority is to ensure that Australia has a vibrant and sustainable industry which
delivers quality services to job seekers and employers. We are particularly concerned to ensure appropriate services
are available to help disadvantaged job seekers overcome barriers and support them to increase their economic and
social participation. To achieve this NESA is focused on ensuring that it facilitates strong partnerships with
stakeholders and supports its members in the development and application of business excellence and better

Our membership includes extensive coverage of providers involved in the delivery of Job Services Australia,
Disability Employment Services - Employment Services Support (ESS) and Disability Management Services (DMS)
which are the largest Programs and which deliver employment assistance to the majority of Australia’s unemployed
citizens. These services are delivered through a network of approximately 350 organisations, delivering services
from some 3500 sites across metropolitan, regional and remote locations.

The employment services industry has a pivotal role in assisting the Australian Government to achieve its policy
objectives in workforce participation, productivity and social inclusion. Central to achieving these objectives is
ensuring that job seekers have assistance to address barriers and develop the skills necessary to effectively meet the
demands of a contemporary workforce and achieve sustained participation.

Employment participation and workforce productivity are critical to the economic and social wellbeing of the
Nation. Investment in employment services should be considered in the context of the critical role these services
play in the achievement of participation and social inclusion objectives.

Australia is now considered to be a world leader in the provision of employment services. Our employment services
has contributed to the achievement of record employment participation levels through generating sustainable
employment placements for Australia. Operating for more than a decade these services have also delivered
significant efficiencies for tax payers.

While there has been recent reform employment services has been operating for a relatively short period of time
and there are strong indications for the need to enhance and recalibrate service models and supporting mechanisms
to enable employment services to achieve the critical economic and social objectives of Government.

The National Employment Services Association welcomes the opportunity to provide feedback to the Advisory
Panel on Employment Services Administration and Accountability Discussion Paper. The industry welcomes the
establishment of APESAA as an independent panel to identify potential improvements to the Job Services Australia
(JSA) program and Disability Employment Services (DES) program with a focus on ‘red tape’ reduction. The industry
also acknowledges the Government’s willingness to review the Programs’ operation and to make changes in
response to new circumstances, new evidence and stakeholder feedback.

           National Employment Services Association – Response to the APESAA Discussion Paper              3
There is general consensus across providers in the employment services industry that finding the right balance in
the levels of controls to ensure accountability for public funds and maximising the achievement of outputs and
outcomes is necessary. Issues related to the administrative and compliance burden associated with the delivery of
employment services have been noted and continually increased since the commencement of the provider
purchaser model. The Independent Review of the Job Network released by the Productivity Commission in March
2002 indicated that the emphasis on detailed monitoring and compliance had become excessive and recommended
the adoption of more risk based approaches. In addition the Productivity Commission also advocated for greater
transparency of the administrative and compliance burden through data collection and reporting.

The reform of employment services that brought about the creation of contracted employment services was
outlined in Reforming Employment Assistance- Helping Australians into Real Jobs, August 1996 (Minister for
Employment, Education Training and Youth Affairs). The principles and philosophies for reform were developed
through various reviews of the strengths and weaknesses of the existing employment services structure and process
and it was considered that if applied they would improve outcomes for unemployed Australians. This was reflected
in DEETYA’s Annual Report of 1996-1997 about the reform principles that “A common thread is a sharper focus on
outcomes rather than processes and a reduction in regulation and prescription of public service activity”. Reforming
Employment Assistance outlined six general principles to be observed in the design of future labour market
assistance which are still relevant today. They were summarized as:
1.    The assistance to job seekers should be based on their individual needs and their capacity to benefit from it in terms
      of achieving a sustainable employment outcome;
2.    Providers should have access to flexible forms of assistance that fit the needs of jobseekers;
3.    The incentive framework should reward providers of labour market assistance primarily for placing job seekers in
      real jobs, with additional incentives for placing those most in need;
4.    A competitive market for employment placement services should separate purchaser from providers and ensure
      that providers operate on the basis of competitive neutrality;
5.    Conditions for payment of income support for unemployed people should be linked closely with active employment
      assistance measures;
6.    Jobseekers and employers should be able to receive high quality and streamlined service from the agency and
      providers with which they interact.
A great deal of success has been achieved in the implementation of contracted employment services with record
levels of employment outcomes and significant reduction in the costs to the Australian taxpayer. Despite the intent
of reform however goals of a streamlined service and reduction in the prescription and regulations have been less
successful. Over the years of operation of employment services there have been numerous attempts to reduce the
administrative and compliance burden. These attempts to reduce red tape have had little impact with ‘compliance
creep’ overshadowing gains achieved. A Review of Developments in the Job Network Research Paper released by
the Department of Parliamentary Services in December 2007 in relation to administrative and compliance demands
concluded in supporting reform that:
      changes made to the Job Network in order to deal with emerging systemic problems have resulted in substantial
     administrative and compliance demands being placed upon Job Network providers
      increased Government monitoring and regulation of Job Network providers have impacted on the ability of these
     providers to furnish the flexible and tailored support necessary to improve the employment outcomes of long-term
     unemployed and difficult-to-place job seekers

The industry acknowledges that there have been more recent efforts targeted at reducing red tape since the reform
of employment services and implementation of the current framework which includes Job Services Australia and
Disability Employment Services Programs. The industry acknowledges efforts for streamlining made through
initiatives such as the Independent Review of the Job Seeker Compliance Framework, the introduction of the
Business Support Officer role, ongoing IT and Centrelink improvement initiatives.

             National Employment Services Association – Response to the APESAA Discussion Paper                   4
The industry agrees that the Job Services Australia and Disability Employment Services models are complex and red
tape can be further reduced. In the reform of the employment services contract in 2009 the creation of JSA,
combining seven Programs into one was intended to achieve a significant reduction in compliance requirements.
The industry contends that while this resulted in simplifying the number of contracts and contract administration
requirements, much of the administration and compliance requirements involved within previous Programs have
been retained under the current framework. In some areas of Job Services Australia the level of administration and
complexity in reformed arrangements has comparatively increased. The New Enterprise Incentive Scheme (NEIS)
for example includes additional complexity and administration through the revised payment structure and access to
training places. The current employment services framework was designed with an improved focus on sustainable
employment particularly for those most disadvantaged and experiencing social exclusion. There are expectations
across Programs for greater levels of collaboration with other Programs and services within the employment
services framework as well as those in the wider community. Quality assurance measures to monitor that these
expectations are being met have also added to administration and compliance in the reformed arrangements. We
also agree that the impact of the complexity of arrangements and administration is shared with providers by the
Government, job seekers, employers and wider community stakeholders.

NESA recognises the Panel has heard a range of views and received many suggestions for change ranging from very
minor and incremental changes, to radical and sweeping reforms. We appreciate the Panel’s focus on strategic
reform that offers substantive improvements for job seekers, employers, providers and taxpayers.

Industry feedback indicates a high degree of support for the adoption of the principles of earned trust;
administrative simplicity and best practice; innovation; and outcomes-focused, risk-based administration
particularly as they relate to improving quality while reducing red tape and ‘micromanagement’. The Discussion
paper appropriately recognises that not all compliance burdens are imposed by the Government, as many providers
use ‘shadow’ systems, to duplicate DEEWR systems, or ‘legacy’ systems, to comply with requirements that have
since been removed. We acknowledge that the reduction of the total administrative burden will not necessarily be
achieved if providers continue to duplicate systems. Feedback from industry members indicates that unnecessary
administration is created by providers’ lack of confidence that evidence requirements will not change and/or be
applied retrospectively as has occurred in the past.

In responding to the Discussion paper NESA recognises APESAA’s focus is long-term and directed at informing the
2015 contract period and beyond within the terms of reference being:

    identify existing employment services administrative processes that are considered, from a whole-of-model
   perspective, as unnecessarily burdensome or complex;
    examine related business processes and practices of Employment Services Providers (ESPs) to identify their
   potential systemic contribution to administrative burden and streamlining;
    identify a cost-neutral forward agenda comprising practical actions to streamline administration in the
   employment services model; and
    provide advice on appropriate mechanisms for the future assessment and measurement of administration and
   accountability processes in the employment services model

           National Employment Services Association – Response to the APESAA Discussion Paper           5
Topic 1 - General: Outcomes-focused administration

 Preliminary findings                                              Possible reform themes

 The key outcome being sought by the Programs is sustainable A stronger focus on measuring and rewarding performance, based on
 employment for job-seekers.                                           outcomes achieved, with more flexibility in how ESPs achieve those
 The level of administrative complexity and controls on Program outcomes. In particular, in the definition of outcomes there would be a
 inputs and outputs is high, but it is not clear that all the controls stronger focus on sustainable outcomes as the basis for rewarding ESPs.
 are contributing to favourable outcomes for job-seekers.
                                                                       Simplification of outcome types.
 The high degree of complexity gives rise to inadvertent and
                                                                       Rebalancing payments, toward outcome fees and away from service
 trivial ‘breaches’ of the program rules.
 Performance measures are more focused on quantity than
 Payments are attached to small milestones that do not
 necessarily lead to sustainable employment.

Comments on Preliminary Findings
The industry agrees that the key outcome being sought by the Programs is sustainable employment for job seekers.
Feedback indicates that there is widespread agreement that the levels of controls on Program inputs and outputs
are excessively high. The level and complexity of controls is evident in the volume of guidelines, supplementary
documentation such as Fact Sheets and Job Aids. We note that the Members Information Guide which contained all
Program information and guidelines to support the Job Network contract contained 133 pages. Job Services
Australia is estimated to have over 3000 pages of guidelines. In addition the ESS IT system programming which is
heavily directed at supporting compliance with the relevant Program DEED has grown far more complex than
predecessor systems. The level and complexity of controls is believed to contribute to the administrative burden
absorbing more time which could be effectively directed to job seekers and employers and increases the risk of
trivial or technical errors in compliance with Program rules.

Importantly in considering the volume of controls in place to ensure compliance, fundamental questions are raised
regarding the level of prescription included within program design. It is acknowledged that program design and
control measures also support efficient and effective program implementation such as managing financial
investment of public funds through for example reducing potential dead weight losses or acting as rationing tools.
Programs are intended to offer a framework of individualised and flexible responses to job seeker needs in order to
assist them to achieve sustainable employment outcomes. Program design is also stated to support the
achievement of broader social inclusion outcomes and as such social outcomes as well as economic should be
considered as valued outputs. Many providers report that current design and controls severely restrict genuine
individual assistance and evidence based practice development.

There is a general consensus that finding the right balance in the levels of controls to ensure accountability for
public funds and maximising the achievement of outputs and outcomes is necessary. A high degree of the current
controls is generally viewed as compliance rather than performance (quantity and quality) oriented. While these
controls indicate that requirements or process have been met, they are not a measure of and nor do many
contribute to the quality or effectiveness of service delivery. In many cases controls are seen to divert resources
which could more productively be invested in outcome focused activities for job seekers. There are also concerns
regarding what the industry has termed compliance creep which is the increase in controls over the life of the DEED.

There is strong feedback that the payment system for both service and outcome fees contributes to the
administrative burden including payments for small milestones which emphasise compliance with the DEED but do
not necessarily lead to sustainable employment.

              National Employment Services Association – Response to the APESAA Discussion Paper                                 6
Response to consultation questions
Should payments be rebalanced toward outcome fees and away from service fees?
In considering revision of the payment structure for employment services it is critical to recognise the importance of
an appropriate balance of resources for the effective implementation of Programs and avoidance of perverse

Service fees should ensure that the Commonwealth assumes financial responsibility for the provision of universal
employment assistance appropriately delivered to job seekers as required and prescribed in the DEED. There is a
need to ensure appropriate resources are available to deliver fundamental program requirements to meet diverse
job seeker and employer needs as well as incentives to maximise employment outcomes. Any adjustments to the
payment structure should be implemented with a focus on protecting or enhancing service quality and assistance.
Consideration to past experiences should be given and we note for example the Review of Developments in the Job
Network Research Paper released by the Department of Parliamentary Services in December 2007. This report
indicated in its conclusions that the Job Network’s capacity to cater to the needs of difficult-to-place job seekers,
the long-term unemployed and achievement of employment outcomes for them were impacted by problems with
the performance-linked payment structure of the Job Network, along with the limited fees paid to Job Network
providers. Job Services Australia has an even stronger focus on outcomes than Job Network including change to the
ratio of payment for 13 compared to 26 week outcomes.

We note that the current level of service and outcome fees do not necessarily reflect the investment of resources
necessary to deliver them with some service elements regularly requiring cross subsidisation. The area of Job
Placement for example is one where the fees payable do not cover cost of delivery. Without the prospect of
downstream outcome fees upfront investment in brokered Job Placement activity would not be viable. As such the
industry feedback indicates concern for service quality if the upfront resource to deliver required assistance is not
available within the service fee structure. A rebalancing of payments with more emphasis to outcomes could
potentially also reduce resources available for investment in innovative solutions and evidence based practice

The balance of service and outcome fees was adjusted in the recent reforms to employment services with a greater
value placed on outcomes through a range of measures including the performance and payment structures.
Amendments to the payment structure in preference to heavier outcome fees may drive the short term volume but
is unlikely to improve the quality of outcomes or performance over time. There is a high risk that such a
modification to the payment structure will put emphasis of focus on those job seekers requiring the least upfront
investment to achieve employment further disadvantaging those with greater disadvantage including within various
funding classifications. It should be noted that within each classification there is a high diversity of job seekers with
wide ranging needs. For example, while Stream 1 in Job Services Australia is for the relatively more job ready there
are job seekers within this stream experiencing significant barriers such as homelessness, mental health issues and
those who are long term unemployed. Ensuring an appropriate balance of service and outcome fees in the payment
structure is critical. The industry has long argued that ensuring the right level of support and resources are available
is critical to continuous improvement in both the volume and quality of sustainable outcomes particularly for those
most disadvantaged.

Amendment to the payment structure that places a greater up front financial burden and risk on providers raises
concerns about the sustainability and stability of the industry. As indicated in the Productivity Commissions
Independent Review of the Job Network there are potential liquidity issues involved in moving to more heavily
focused outcome based payment systems. Increased financial pressures could compromise the quality of physical
and human resources applied in the delivery of employment assistance. This is a particular concern in the light of
the terms of reference which proposes these potential reforms occur within the context of neutral cost. Adjustment
to service fees may threaten the diversity of the industry through requiring more significant financial reserves and
assumption of greater levels of organisational risk by providers. We note that in international models of
employment assistance where greater risk is borne by the provider the potential returns are also far greater. We also
note that the implementation of revised arrangements must consider the unavoidable delay in achieving revenue
from outcomes.

            National Employment Services Association – Response to the APESAA Discussion Paper                7
The payment structure must support the effective implementation of Programs as economic conditions change
such as occurred with the Global Financial Crisis. In responding to such economic events a sufficient level of service
fees must be available to respond to increased numbers of job seekers seeking employment assistance. In such an
economic environment where there is decreased immediate outcome potential program resources must support a
longer term focus. During such periods industry and occupational areas under stress often accelerate their speed of
decline. Workers detached from such industry or occupational areas often need additional levels of investment to
maximise their potential to re-join the labour market and achieve sustainable employment. Ensuring that there are
resources in place to minimise skill atrophy and other negative impacts from labour market detachment on job
seekers during such periods is essential to economic recovery.

The achievement of an appropriately balanced payment structure must also take into account the application of a
single payment structure for Programs implemented nationally with only a minor additional payment for selected
areas defined as remote. Labour market conditions are beyond the control of providers but significantly impact on
the potential level of outcome achievement. This influence of labour market conditions is reflected in the
performance assessment framework however not in the payment structure. The industry notes long held
experiences of providers operating in depressed labour markets (metro, regional, rural and remote) being successful
in relation to performance as measured by the Star Ratings; however they have simultaneously faced financial
sustainability challenges. In addition there are other labour markets where the overall economic indicators are
more positive however local circumstances such as a heavy reliance on seasonal or higher rates of casual
employment make the achievement of full sustainable outcomes more challenging. In addition the payment
structure as a means to maximise sustainable outcomes should be considered in the context of the broader
performance drivers within the framework such as the measures to sanction or remove poor performers from the
market including through business reallocation during contract periods and at renewal points through procurement
processes. The risk of a reduced or terminated contract is significant and considered more influential on providers
than short term incentives within the payment structure.

The service fee structure has become far more complex than previous models and while there is a view that they
should not be reduced there is opportunity to streamline the administrative requirements involved. The
introduction of individual 13 week up front payments and validation requirements have resulted in significantly
more resources being dedicated to managing service fees. In addition other new requirements such as those related
to suspension of job seekers when they are placed into potentially sustainable work and the need to reactivate them
if that work fails to achieve an outcome has increased caseload management complexity.

Providers note that service fees are only available to claim when the necessary actions have been completed in ESS
indicating that all requirements are met. The requirements for individual claim verification processes creates
excessive administration with providers being highly cautious that claims are checked to avoid the repercussion of
error. While this may be favourable for the integrity of the framework on the one hand it requires an excessive use
of resources in a highly transactional environment. In a stronger culture of trust in the provider – purchaser
relationship, claims would be monitored through contract management and simple technical errors would not have
the stigma associated and contribute to providers being overly fearful of being accused of fraud as is currently the
case. Even with this level of monitoring sometimes system issues result in errors which are not detected by the
provider who still remains ultimately responsible for the return of funds. For example a systems issue in ESS was
resulting in job placements defaulting to brokered outcomes even though the appropriate assisted box was ticked.
This resulted in some 13 week and 26 week outcomes being paid at the incorrect rate.

Quality of services to job seekers and employers as well as a reduce administration could be achieved by revising the
payment structure to include six monthly upfront fees rather than quarterly upfront service fees. We would also
recommend that job seekers are not suspended until they achieve their 13 week outcome as was the case in
previous Programs, and that the upfront payment could potentially cover post placement support for the period.
Alternatively there was also a view that adoption of a similar approach as was taken in the Job Network model for
quarterly advanced payments (non acquitted) although with greater transparency would reduce administration

           National Employment Services Association – Response to the APESAA Discussion Paper              8
How can a stronger focus on sustainable employment be built into the Programs?
There has been considerable discussion regarding the current definitions of sustainable employment. Sustainable
employment is generally defined as 13 weeks of employment which meets outcome definition requirements for a
full outcome. This level of employment for activity tested job seekers generally results in the cessation of income
support eligibility. Incentives for 26 week outcomes are more heavily weighted in recognition of the benefit for all
stakeholders (job seeker, employer and Commonwealth) in ensuring the longevity of the current period of
employment and minimisation of further episodes of long term unemployment. Thirteen and twenty-six week
measures have been in place for a significant period and precede the introduction of the current contracted
employment services model.

Evaluation studies, post program monitoring and net benefit analysis reported on by the Department over more
than a decade have repeatedly reinforced that achievement of these milestones, particularly 26 week outcomes, are
significant predictors of job seekers ongoing sustainable employment prospects after the cessation of assistance.
We note that under current full outcome definitions for activity tested job seekers they are required to work
sufficient outcomes to achieve an off benefit outcome for 13 weeks. Given job seekers income support cycle and
employment start dates rarely align and the income support period is managed fortnightly not weekly, it can take
up to 17 weeks of employment to achieve a 13 week outcome and as such the 26 week outcome does not become
claimable until up to 30 weeks of sustained employment.

As discussed in the response to the previous question the payment structure and the performance framework
including those measures to sanction or remove poor performers from the market are drivers which also support the
emphasis on the volume of sustainable outcomes.

There has been long term discussion within the industry about strategies to improve the quality of sustainable
employment outcomes. An issue of consideration for some time has been how the emphasis on the volume and
speed of outcomes may diminish the quality of employment achieved. It is acknowledged that work experience
improves employability and therefore any work is preferable to no work. However, job seekers engaged in entry
level employment can have a tenuous attachment to the labour market and are particularly vulnerable during
economic downturns. Low-skilled workers continue to struggle to find pathways out of low entry and low security
jobs. There are also a sizeable and growing proportion of underemployed workers who want but are unable to find
more hours of employment without assistance.

Within Job Services Australia program rules and outcome requirements could be strengthened to better support
work conditioning and enable graduated increases in employment. Previous program rules enabled a more flexible
approach to re-anchoring of job placements when job seekers reached claimable employment levels than rules for
upgrade of an outcome currently allow. This greater flexibility provided stronger capacity and incentive to focus on
improving the level of participation to full outcomes for job seekers.

For many job seekers in entry level employment the financial benefits of work may be marginal in comparison to
being reliant on welfare particularly when the costs of working such as travel, child care, clothing etc. are
considered. The focus on speed and volume of outcomes can also diminish strategies designed to up or re skill job
seekers in areas of high demand. Such strategies take longer to achieve and do not attract additional incentives in
payment despite their potential to deliver better quality and more sustainable outcomes for job seekers and
employers in areas of skills in demand. The performance framework rewards speed to placement and discourages
longer term strategies. However in contrast, strategies which fast track acquisition of accredited qualifications
often result in the education or training achievement as ineligible for a claimable outcome as minimum duration of
training is not met. This reduces the responsiveness of Programs to meet employer demands and capture better
quality opportunities for job seekers.

While industry members provided feedback on the feasibility of creating additional outcome milestones for longer
term outcome durations such as 52 weeks to support improved sustainable employment there were widespread
concerns about doing this effectively within current investment parameters. Merely spreading current investment

           National Employment Services Association – Response to the APESAA Discussion Paper            9
over a longer period would require additional expenditure on the part of the provider without commensurate
increase in revenue. It is also important to consider the business cycle in determining longer term outcome
durations for example the proportion of claims that are likely to fall due outside the contract period would increase
significantly. In contrast to rebalancing current investment in outcomes to include outcomes of longer duration
additional bonus payments were seen as potentially more favourable incentives.

There was high recognition about the challenges of maintaining contact and verifying employment outcomes with
job seekers who are functioning independently in the labour market. These challenges are experienced with the
current 13 week and 26 week outcomes and are anticipated to be much greater the longer the detachment from the
welfare system. These challenges often result in providers being unable to collect the evidence required to claim
payment for achieved outcomes. Job seekers who are functioning independently often view the need of providers
to validate claim requirements as intrusive and similarly employers also become frustrated with the level of detail
required to satisfy evidence requirements. An inability to obtain appropriate evidence, results in ineligibility to
claim fees even where it is apparent that the job seeker remains off income support and is still working. Inability to
claim outcomes because of evidence requirements would increase with longer duration and is likely to increase
financial viability pressures which could threaten the quality of services.

Improving the provision of post placement support services has potential to improve sustainable employment
outcomes. Unlike Disability Employment Services which has structured ongoing support assistance post placement
Job Services Australia does not. Providers of Job Services Australia are permitted to conduct post placement
support for up to 26 weeks and claim reimbursement where the activity meets requirements through the
Employment Pathway Fund. However many providers report that the requirements are not conducive to
confidently claiming reimbursement and this is considered as a disincentive for investment of adequate resources in
post placement support.     In this case, the lack of a requirement to conduct post placement support results in
administration and compliance activity to justify expenditure.

Providers are of the view that the increased value derived from human capital development strategies to the
sustainable financial independence of job seekers, improvements to meeting skill demands and sustainability
should be considered over speed. Providers would however note that to make a shift to human capital over speed
to placement to better skill our nation could result in initial slower achievement of outcomes over the contract
period which needs to be considered in funding arrangements, performance assessment and business reallocation.
Attempts to offset speed to placement in support of skills initiatives has been implemented through the suspension
system only when a job seeker is undertaking a level of training which is itself, a claimable outcome. This has not
been effective and support of longer term strategies is still an issue as a result of the performance drivers on speed
to placement. Commitment to job seekers and financial objectives are natural drivers to achieve outcomes as
quickly as is possible. The performance framework is a significant driver of practice as it is the greatest predictor of
the employment services longevity and potential business growth. Inclusion of speed to placement increases the
emphasis on those with the shortest pathway to employment by providing higher value to quick outcomes and
decreasing the value of outcomes achieved after longer durations of pre-employment assistance.

The employment services industry has long recognised that a reduction in welfare reliance can only be achieved by
ensuring job seekers can achieve sustainable employment and a wage that supports them and their family. Assisting
job seekers to solidify their return to work and career pathway can reduce returns to welfare reliance. The industry
has long advocated for the implementation of career advancement models in the framework. Career advancement
strategies can provide a solution to this labour market challenge which can support workforce participation and
related labour utilisation and productivity objectives. Importantly such strategies strongly complement a work first
approach by providing targeted and tailored career advancement interventions post placement. A strategy such as
this also contributes to workforce development and can support the development of more inclusive and flexible
workplaces. A career advancement model could be targeted at disadvantaged job seekers who face the greatest
risks of returning to welfare. We note however that such a model would require adequate additional investment.
See Attachment 1 for further discussion about career advancement models.

            National Employment Services Association – Response to the APESAA Discussion Paper               10
Is there a need to reduce the number of outcome types, and/or simplify the definition of outcomes?
There is a widespread opinion that the number of outcome categories and transactions in the funding model
contributes to the administrative and compliance burden. For example, providers estimate there are currently 144
possible outcomes combinations available within Job Services Australia Stream Services Program across the four
streams that must be monitored and managed. While it is recognised that some of the outcome types are intended
as an incentive to drive practices in areas of additional value such as apprenticeships the complexity and rigidity of
the rules undermine the objectives. Providers question whether the intent and spirit of the Program is met through
such factors which limit claims for achieved outcomes as a result of micro issues and administrative technicalities.
This issue does not only affect provider revenue it also diminishes the reportable performance of the industry as this
is measured by claims made. An opportunity to reduce the number of outcome categories, simplify definitions and
review manual processes could result in significant red tape reduction. Within this response a focus on macro areas
for change will be addressed but we note that there a multitude of micro requirements which in isolation are minute
but together create the administrative burden which should also be systemically addressed.

One of the desired outcomes of the reform of employment services was to increase the industry’s engagement with
employers. Australian employment services can provide critical support to business and industry in skills
development and attraction strategies. A number of incentives and drivers were incorporated into the Job Services
Australia program design to facilitate achievement of employer engagement objectives. Primarily the introduction
of differential brokered and assisted outcomes were intended to increase incentives to improve employer
engagement. There has been the view expressed that, why should providers be paid, if they did not get the job
seeker the job? This view suggests that preparation and support work delivered in employment assistance, did not
contribute to the outcome.       There is a fundamental misconception that there is less resources involved in
empowering and supporting job seekers to assist them to find employment than brokering a placement. This is not
the case. A review of employment services practice locally and internationally will confirm the importance of
empowerment models to fully tap into available opportunities through networking and cold canvassing. There are
many organisations who will not lodge vacancies with employment services however providers will still identify the
vacancy assist with applications and coach the job seeker for interview. Providers consider that fundamental
barriers to employer engagement have not been addressed through these new outcome measures but they have
resulted in a significant increase in complexity of arrangements, monitoring and administration. The industry
considers that the differential payment levels for brokered and assisted outcomes should be removed with the
overall outcome funding maintained.

A number of providers called for the rules for lodgement of information and data into the ESS system to become
more flexible. While it is recognised that prompt and accurate recording of information is important, technicalities
should not render placing a job seeker into sustainable employment ineligible for claim. The 28 day rule for lodging
information and processing claims is too rigid. Once a job seeker commences in work they can be difficult to
contact and obtaining accurate information can be challenging. As such, it can take more than 28 days to gather the
information to anchor a placement or to gather the required evidence to claim payment. The Productivity
Commission Report in 2002 recommended “that an automatic system for verifying outcomes be implemented by
DEWR with cooperation from Centrelink and the Australian Tax Office. If this is not feasible, the existing 28 day cut-off
for verification of outcomes should be removed”. There are a myriad of reasons why incorrect information may be
placed in ESS such as incorrect start dates reported by job seeker or employer, or simple administrative error such
as failure to tick an appropriate box. The flexibility of timing to anchor a job that exists in Disability Employment
Services better reflects the needs of job seekers returning to the labour market. Greater flexibility to correct errors
and maintain eligibility for payment should be incorporated into the framework.

A number of providers also commented on the additional complexity that results from claims for outcomes being
linked to the income support cycle which is managed fortnightly. There were observations about the fairness of a
measure which indicates that a job seeker must work each and every week of a thirteen week period sufficient to
satisfy a reduction in fortnightly income support payments. We note that even where the provider can validate
income sufficient for nil income support payments for thirteen weeks the claim will not be paid if the job seeker
receives any income support in the fourteenth week. There have been examples of job seekers in substantial casual
employment when through shift variations or a day sick in the thirteen weeks have received an income support

            National Employment Services Association – Response to the APESAA Discussion Paper                11
payment for as little as $5 and the claim is reduced to a pathway outcome. When the Australian economy contains
such a high proportion of casual and part time work, such sensitivity is out of step. In addition the rules around
anchoring a placement are not conducive to developing job seekers work hours over time. The provider only has 28
days to anchor the placement. Once anchored the provider may only upgrade the employment if it reaches
requirements for a full outcome. This drives providers to capture opportunities for pathway outcomes rather than
work with the job seeker to develop their level of economic participation. It also does not reflect the transitional
employment entry pathways adopted by many workplaces and which meets the needs of job seekers. For example
it is common in many areas of employment opportunity such as in hospitality, retail, aged care and child care for
new employees to commence on lower hours initially while they build their practical skills and experience. If the 28
day window is exceeded prior to the job seeker reaching more sustainable levels of work, an upgrade can only be
claimed if the provider demonstrates through evidence that their actions contributed to the increase of hours.
Natural dynamics of the labour market such as this should be better reflected in employment services program
design and administration requirements.

There has been much discussion in the past about the merits of greater alignment and utilisation of the income
support systems and employment services framework to support claims for outcomes. Jobs seekers are required to
report income and/or hours to Centrelink. While job seekers and employers are not required to disclose earnings,
providers are reliant on them doing so to claim outcome payments. Job seekers and employers often feel uneasy
about reporting earnings to providers and are annoyed if asked to do so by multiple stakeholders in the same
framework. Providers are also less effective in assisting the Government with the prevention of fraud where they
cannot compare reported earnings. Greater transparency in declared earnings and use of this information as
evidence of outcome achievement would reduce the compliance burden and reduce perceived bureaucracy by job
seekers and employers. The need to get earnings evidence from job seekers can also colour their perceptions of
provider motivation and undermine post placement support.

One of the challenges to an integrated approach which supports education and training outcomes is underpinned by
lack of alignment of the definitions of education and training outcomes for employment services with common VET
delivery arrangements. Currently the definition of a Qualifying Education Course requires full time participation in a
single qualification delivered over two semesters within a twelve month period. This definition does not reflect the
variation in education and training across the States with regard to issues such as the number or standard duration
of semesters which results in inequity in the recognition of performance. In the earlier iterations of Job Network a
single qualification was interpreted as the same area of study unlike current arrangements. Previously an eligible
outcome was allowed where a Certificate II was completed in one and III in the next in the same area e.g.
administration; however under current arrangements the outcome must be completed at the same level.
Increasingly the education sector is adopting flexible delivery of training to facilitate pathways to higher
qualifications and rarely offers an individual certificate level over two semesters. For many job seekers a graduated
path to a higher qualification is a more suited option and a more efficient manner in developing their skills to a level
attractive to employers. We note that encouraging job seekers to undertake qualifications above their capacity
contributes to incompletion rates and reinforces negativity about skills. As such the technicality involved in this
definition fails to recognise the achievement of the intended output - skilled and formally qualified job seekers.

Revision of outcome definitions for qualifying education and training outcomes to more effectively support
objectives to increase the proportion of job seekers with a vocational qualification should occur. This should include
a primary emphasis on qualifications achieved rather than duration or structure of delivery such as contact hours.
The recognition of needs of job seekers with partial capacity to work incorporated in employment outcome
definitions should also apply in education outcomes and allow part time study.

In an environment of skills shortages and an ageing population encouraging the acquisition of skills relevant to the
productivity of enterprises is essential. People with a disability have lower rates of education participation and
vocational qualifications. Addressing skills development is a critical element in achieving social inclusion outcomes
as well as employment participation. The lack of eligibility for education outcomes is a barrier to objectives and
such achievements should be recognised in the revenue and performance framework for Disability Employment

            National Employment Services Association – Response to the APESAA Discussion Paper               12
Topic 2 - General: Risk-based administration

Preliminary findings                                          Possible reform themes

The regulatory controls and administrative and compliance Better matching compliance requirements to risk. This could include
requirements are intended to manage various types of risk but establishing less onerous controls for ESPs with a strong track record.
in fact may be poorly matched to the profile of risks.        (This approach could be linked to possible reforms relating to ESP
For example, there is little scope for a more ‘light handed’ accreditation and workforce competencies, which are discussed below.)
regulatory approach for ESPs with a long and positive track
record of performance, compliance and honesty.

Comments on Preliminary Findings
The issue of strengthening the risk based administration measures in employment services has been a topic of
discussion since the release of the Productivity Commissions Report into the Independent Review of the Job
Network in 2002. While the issue has been on the agenda the industry has seen little progress made in this area.
Many providers view that the administration and compliance issues stem from the Department being excessively
risk adverse. While we understand that the Department assesses providers’ relative risk which informs monitoring
and auditing levels, this is not a transparent process.

Response to consultation questions

In the Programs, can administrative and compliance requirements be better matched to the relevant risks they
seek to manage?
A different approach to risk management for administrative and compliance requirements would have the potential
to strengthen the current approach. The approach adopted needs to provide clarity, flexibility and transparency to
instil provider confidence so that additional processes are not overlaid as has been evident in current arrangements.

A more transparent approach to risk assessments would enable providers to have a clearer understanding of the
areas in which DEEWR consider that their practices could be improved. It would also enable providers the
opportunity to respond and offer additional information which may result in a more complete understanding of the
processes and practices undertaken to support compliance, manage organisational risks and operational integrity.

The development of the risk communication framework could be undertaken to offer providers guidance in areas
considered to be of risk. We note that provider organisations do not have a view of practices and behaviours
encountered across the industry and additional information could assist them to elevate internal control measures.

It is recognised that the distribution of information about sharp or fraudulent practices may to some seem like
publishing a ‘how to guide’. However, such a strategy would reinforce that monitoring of practices regularly occurs
and undesirable behaviours are effectively detected. The industry would view such communication as a valued
contribution in their efforts to identify and manage risk to protect their organisation from misdirected practices.
Such communication would also facilitate greater trust and sense of partnership. It is unfortunate that many
providers currently view the risk management framework as more heavily emphasising a find and punish rather than
mutual and proactive development approach to the reduction of compliance breaches (intentional/unintentional).

We consider that a risk reporting framework could be developed in consultation with peak body organisations and
provider representatives with DEEWR and other representatives as needed to ensure all stakeholder needs and
requirements are considered and subject expertise input is available to assist with design, testing and evaluation.

Should ESPs with a strong track record of performance, compliance and honesty be ‘rewarded’ with more
light-handed controls (i.e.: fewer and less onerous compliance requirements)
There were mixed views presented in consultations about this question. Many felt that record of performance
including compliance history could justify a light handed approach. Others felt equity in arrangements were critical
in a competitive market.

             National Employment Services Association – Response to the APESAA Discussion Paper                           13
Providers noted that due to the cost of administration and resources absorbed into compliance activity those
rewarded with a light touch would have a distinct advantage to invest these resources into performance. However,
a major consideration was the lack of transparency of the risk assessment framework and provider assessments.
There was a high degree of concern amongst providers regarding the assessment methodology. Concerns about
providers risk assessment stems from a lack of transparency and perceptions of inconsistency elsewhere in the
Contract Management Framework. It also stems from various evaluations such as Australian National Audit Report
No.51 2004–05 DEWR’s oversight of Job Network services to job seekers which in relation to the substantiation of
risk assessments make the following observations:

3.19 DEWR’s risk assessments are based on judgements about the relative risk of contract failures. As these judgements
determine the investment of monitoring resources, it is important they are adequately substantiated in the risk
assessment systems and documentation. An examination of the substantiation in completed risk assessments showed
that there was little supporting documentation for completed risk assessments in the sample. This means that it was
not possible to ascertain the adequacy and appropriateness of the risk assessments that were examined.

3.20 DEWR has been aware of the issue and has reminded its contract managers of the need to appropriately document
risk assessments. The ANAO considers it would be beneficial to identify and specify in guidance material the minimum
level of evidence that is considered by DEWR to be an appropriate basis for contract managers to make a measured
assessment of the various risks in the risk framework. This would provide further assurance that all of the risks identified
by DEWR receive an appropriate level of consideration, on an appropriate evidentiary basis.

There was a strong view that any assessment used in decisions which may affect provider operations or their future
contracting prospects should be conducted in a transparent, objective and robust manner. A number of providers
noted that the lack of transparency also underpinned issues relating to power imbalance in the relationship between
the purchaser and provider. It was noted that there is a perception that contract managers had the opportunity to
apply significant influence over the providers operation which led to reluctance by some, to challenge them or to ‘go
over their heads’ and escalate issues. It is recognised that such fears may be grounded in potentiality rather than
actuality of consequences, but none the less it presents impacts on the framework.

In order for there to be support for a compliance matched risk framework greater trust through improved
transparency of the risk assessment methodology, improved communication about risk assessment results and
increased procedural fairness by enabling providers a right of response to assessments is required.

Should ESPs be encouraged to pursue innovative ways to manage risk? What implications would this have for
the program systems and for DEEWR?
More broadly, better practices in risk management have been developed through evidence based research over
many years. Those established principles should be applied in the operation of employment services. Development
of risk management practices should occur as a result of continuous improvement. Encouraging ‘innovation’ is not
viewed by providers to be beneficial and could result in increased risk. However, forming a stronger purchaser -
provider partnership in the risk management framework has potential to significantly strengthen practices. In
addition as indicated earlier improved dissemination of information about potential risks will support better
practices across the industry and contribute more strongly to prevention of fraud.

We stress that in a contracted model and within a competitive market providers are very aware of the potential to
be disadvantaged as a result of poor behaviours and practice of competitors. There is also a strong understanding
that the contracted employment services must deliver results and have integrity with the Australia public in order to
be sustained. This underpins providers’ motivation to contribute productively to protect their own interests as well
as the reputation and sustainability of the industry.

            National Employment Services Association – Response to the APESAA Discussion Paper                   14
Topic 3 - General: Tailoring, personalisation

Preliminary findings                                            Possible reform themes

Contracts and tools are generic (‘cookie cutter’) rather than   More tailored and personalised services, to better meet the needs of
tailored or personalised to individual job-seekers’ needs.      individual job-seekers. The design of contracts and tools would reflect
                                                                Efforts to tailor services and tools should be alert to the associated costs,
                                                                including the potential costs of additional complexity.

Comments on Preliminary Findings
The industry considers that contracts and tools are generic and this along with program design and program
administration factors contributes to limited opportunities to genuinely tailor and personalise assistance.

Employment services has evolved considerably since their implementation with Programs being developed from
the experiences of each previous contract. Underpinning the original reform of employment services were six
general principles to be observed in the design of future labour market assistance. These principles are still relevant
today and in relation to the tailoring and personalising of employment services we particularly note the following
design principles:
1. The assistance to job seekers should be based on their individual needs and their capacity to benefit from it in terms
    of achieving a sustainable employment outcome;
2. Providers should have access to flexible forms of assistance that fit the needs of jobseekers;
3. Conditions for payment of income support for unemployed people should be linked closely with active employment
   assistance measures;
4. Jobseekers and employers should be able to receive high quality and streamlined service from the agency and
   providers with which they interact.
The reform of employment services undertaken most recently was intended to address weaknesses in preceding
program design. We note that the Review of Developments in the Job Network Research Paper released by the
Department of Parliamentary Services in December 2007 indicated in its conclusions that:

The Job Network’s capacity to cater to the needs of difficult-to-place job seekers, the long-term unemployed and
achievement of employment outcomes for them were impacted by problems with the performance-linked payment
structure of the Job Network, along with the limited fees paid to Job Network providers.

If the Job Network is to be reconfigured to meet these needs, while also potentially meeting skills in demand and
tackling workforce shortages, then this may first require the reassessment of the work-first focus of this system. A ‘life-
first’ approach to employment assistance for disadvantaged job seekers, one that addresses non-employment-related
barriers alongside the provision of employment assistance, may need to be adopted if the Job Network is to achieve
better and more sustainable employment outcomes.

Improving the delivery of tailored personalised assistance will require review of individual program design within the
broader framework in which they operate and interact. Much of the prescription in the employment services
framework resulted from experiences in the early iterations of the immature contracted market. Both purchasers
and providers are vastly more experienced and the framework has developed significantly. There is a fundamental
need to revisit program arrangements to prioritise the delivery of tailored and streamlined services.

At the core of the pursuit of more tailored and personalised services is the delivery of improved quality, performance
and efficiency of employment assistance in achieving sustainable employment and inclusion objectives. While the
level of prescription in service delivery has reduced somewhat in comparison to earlier iterations, many consider
that essentially program administration continues to drive a generic service regime. While there is some scope to
tailor services this must occur within and additional to a range of the mandatory requirements. The payment,
performance and contract compliance frameworks discourage providers from genuine tailoring and personalizing

              National Employment Services Association – Response to the APESAA Discussion Paper                                15
assistance. Addressing the limitations to tailored service provision will have benefits which have potential to
significantly improve job seekers and employers’ engagement, interaction with and satisfaction of services.

Response to consultation questions
What scope is there for more tailoring and personalising of employment services? What form might this take?
What are the expected benefits and costs?
There are a number of areas within the existing framework that improved scope to tailor services could be achieved.
Genuine tailoring and personalization of services requires the flexibility to respond to the individuals’ circumstance,
aspiration and requirements with activities, interventions and resources in a manner which reflects their capacity for
participation throughout the service duration. In current arrangements tailoring of services is restricted by the
mandatory schedule and nature of activity requirements.

While there are options for mandatory activity requirements to be suspended if it is deemed a job seeker is not in a
position to immediately take up work, however this course of action also suspends their requirement to participate
in employment services. While the nature of circumstance makes the suspension of services appropriate in some
cases in others cessation of support prolongs the duration of those circumstance. It is counterproductive to suspend
assistance to address circumstances and increase opportunities for employment when they are ready to work if they
have a capacity to participate. We recognise that job seekers may volunteer to participate during suspension
periods however the mechanisms within the framework do not encourage the job seeker to do so and involves
significant administrative processes. Increasing providers’ capacity to be flexible and tailor mandatory requirements
such as job search activity for limited time periods would enable improved stability of engagement and tailoring of
services to job seeker circumstance, reduce exemptions (including administrative processes to put them in place)
and potentially the length of time they remain unemployed.

Ensuring that job seekers are engaged with an appropriate level of service assistance and resources according to
their circumstance is essential to enable a tailored and personalised response. We note that in the case of Job
Services Australia differing levels of flexibility is applied to Streams to account for job seekers individual
circumstance. Stream 4 is intended to support those most disadvantaged and has the greatest degree of flexibility.
These arrangements would be adequate support for tailored services if the classification system provided an
absolute rather than relative measure of disadvantage. To illustrate while there are opportunities for broader use of
the Employment Pathway Fund to address barriers such as homelessness for job seekers in Stream 4 they are not
options for the many homeless job seekers attached to Streams 1 – 3. Similarly, a provider is permitted to tailor
assistance more flexibly for Stream 4 job seekers but must apply all mandatory activity requirements in the
prescribed time limits for other Streams despite the fact that they may be affected by similar circumstance.

The success of Stream 4 which has produced higher levels of success for the most disadvantaged job seekers than
all preceding employment assistance Programs offers a strong indicator of the value of more flexible and tailored
assistance in conjunction with appropriate resource allocation.

We acknowledge that the Job Seeker Classification Instrument (JSCI) is a central tool for rationing services and
delivers a relative measure of disadvantage. While the industry has had limited direct involvement or input we
acknowledges that reviews of the JSCI have been conducted. We also recognise that these included extensive
econometric analysis and advice from experts such as Professor Paul Miller and Dr Anh Tram Le of the University of
Western Australia, to ensure that the JSCI is effective as a reliable predictor of a job seeker’s level of labour market
disadvantage. However, providers consider that the tool is too blunt an instrument to properly reflect individual
circumstance and impact of factors.

There is inadequate correlation of JSCI scores, the service needs associated with individual factors and the level of
service provided under the Stream Services and we regularly see job seekers classified and engaged with inadequate
service levels. As an illustration, while Stream 1 program design was intended for those job seekers considered ‘job
ready’ an analysis of the caseload engaged with this minimal service level will indicate job seekers facing significant
issues such as homelessness, refugees including some recently released from detention and long term unemployed
job seekers. With an EPF credit of $11, a minimum service level and low flexibility, opportunities to genuinely tailor

            National Employment Services Association – Response to the APESAA Discussion Paper               16
assistance to these job seekers circumstance is limited. In addition with no financial outcome and minimal
performance recognition for employment in the first 52 weeks of Stream 1 services there are no program incentives
for providers to service above what the program design offers. While providers have the capacity to spend more
from the EPF for example they do so knowing that they are diverting resources from job seekers and performance
from Streams which are more highly recognised. In a competitive market such decisions are underpinned by the
risk of business loss.

There are persisting concerns regarding the methodology for the initial completion of the JSCI at the gateway which
have been compounded by the removal of the ability of employment services providers to trigger a Job Capacity
Assessment (JCA) or Employment Services Assessment (ESAt). The change of circumstance process is not
considered effective with providers noting few ESAts appear to be triggered as a result of updating the JSCI with
additional factors identified or disclosed during assistance. Threshold factors such as homelessness which
previously triggered an assessment no longer appear to do so.

Feedback indicates that the system does not facilitate the effective or efficient review of the change of
circumstance by Centrelink who now have responsibility for determining if an assessment is warranted. We note
advice that the system does not assist Centrelink staff to readily identify what changes have been made to the JSCI
and we are not aware of any monitoring of timeliness to review updated information. In addition the guidelines for
Centrelink staff determining if a review should be triggered do not appear to be supporting a consistent approach.
Furthermore, rules which indicate that no assessment and/or change in Stream above what is indicated by the blunt
JSCI score should be made if the provider has already taken action about newly identified circumstance, is
counterproductive. Providers responding to immediate needs prior to a Change of Circumstance action being
conducted with these rules risk depriving job seekers of more appropriate service classification in the longer term.
Such rules should be revised to support more appropriate classification and tailored service provision. In addition at
present providers are able to record personal factors in the Change of Circumstance but a nil impact is applied to the
JSCI score until an assessment occurs and as part of this, the JSCI is fully reviewed. Our experience is that personal
factors are not consistently reviewed and often a nil impact remains applied to significant barriers in personal
factors. Enabling providers to record a provisional impact which contributes to the JSCI score and triggers an ESAt
where that results in a change of classification has potential to support improved classification and as such tailored

Three months into service provision Stream 1 job seekers undergo a skills audit and intensive activities. Previous
experience and evidence gathered through Net Impact studies evaluations demonstrate that short term intensive
activities can improve the job prospects of the less disadvantaged job seekers. However, this is a generality which in
a Program with greater focus on individual needs would not be applied rigidly across the board. Given the
proportion of funding allocated to Stream 1 the proportion of resources invested in Intensive Activities is significant.
Following feedback to the Government about Intensive Activities particularly in relation to the rigidity of
requirements regarding the nature and timing of activities and the number of hour’s job seekers must complete,
services and resources have been reduced however the other controls remain. This means genuinely tailored
options are not always possible within program design and job seekers are provided with limited choices. As we
have seen in the media, this can result in job seekers being dissatisfied with services and frustrated that they are
asked to do activity they see as having low relevance to their needs. Greater capacity for providers to exercise
flexibility in determining the nature and timing of Intensive Activities has potential to result in improved tailoring,
effectiveness and efficiency. In addition gains could be achieved by reducing the evidentiary requirements which
discourage tailoring intensive activities as the resources involved in monitoring participation in a variety of activities
and with third parties such as educational institutions, community services and the like is highly challenging and
administratively burdensome.

The industry notes that attempts to codify identified better practices into the framework result in these initiatives
being standardized and bound by rules and administration. To illustrate this the concept of the Job Seeker Account,
the predecessor of the current Employment Pathway Fund, was based on observations that high performing
providers in contract 1 regularly invested in job seekers from service fees. In contract 2 providers were asked to
record commitments of expenditure in the IT system. In contract 3, 20% of service fees were quarantined into the

            National Employment Services Association – Response to the APESAA Discussion Paper                 17
Job Seeker Account and rules of expenditure and significant administration and compliance measures were
introduced which reduced the scope of assistance.

As a further example, we note the introduction of the Employment Pathway Plan (EPP) as an attempt to codify the
good practice of developing an individual action plan to supplement the Activity Agreements which was previously
used to record mandatory activity associated with social security requirements. While the attempt to integrate
good practices into the framework is positive it must be recognised that applying a range of control measures
reduces their effectiveness to support tailored service provision. Contrary to the intent, in the case of the EPP,
quality assurance measures discouraged providers from straying too far from a standardized formula of activities to
meet the purchasers’ expectations rather than maintaining a primary emphasis on the job seeker’s objectives and

Current Program design affords inadequate time to assess job seekers with the range of activities which must be
completed in the first interview being quite substantial. Without a quality assessment strategies to tailor services
will fall short. The focus on process and ‘form filling’ as an introduction to employment assistance does not
underpin engagement, empowerment of job seekers or tailored service provision. The framework would be
strengthened with the provision of additional resources to enable the provider to undertake a comprehensive
assessment, not bound by regulation.

Many providers also noted that increasing recognition for achievements on the path to employment not just the
outcome would provide incentive for greater tailoring and personalization of services. Such an approach would also
provide additional recognition for work with job seekers most disadvantaged and distant from the labour market.
Measuring social outcomes has been a topic of discussion for many years and has been recently incorporated into
JSA however only a proxy measure (extension of service period) is used selectively for Stream 4.

Adopting a more robust approach to recognising and reward progression towards employment and social outcomes
requires new measures which reflect a distance travelled model. Methodologies and use of tools such as the Rickter
Scale® have been adopted to support measurement of job seekers progression by some providers to support more
effective tailored services. They report that if such strategies are applied in conjunction with a more flexible and
responsive framework they have great potential to improve service quality and outcomes. We stress however that
while we advocate for greater recognition of social outcomes providers adopt various service strategies and
mandating a particular approach would not be supported.

To enable greater capacity to tailor services a reduction in the level of prescription including the nature and timing
of activities and removal of excessive evidentiary requirements particularly in relation to confirmation of job seeker
participation is required across Programs. The guidelines for The JSA Work Experience Phase outline a range of
approved activity options, for example, however the control measures make utilization of many of the options
unsustainable without a high risk of compliance issues. Devoting sufficient resources to accurately track
participation and satisfactorily confirm evidence of time involved in a range of activities such as counseling or
housing assistance, is not feasible and therefore avoided. Such issues along with resource consideration drive
providers to consider more standardized options for which evidentiary requirements can be better managed. The
issues with tailoring activities in Work Experience are also compounded by resource issues and are expected to be
heightened with the introduction of more full time Work Experience requirements.

In a similar vein, another example of where requirements limit a tailored approach is Early School Leavers (ESL).
Option to tailor services to the individuals’ needs and goals are limited with them having a choice to participate in
education, training or other approved activity or cease receiving income support. If they choose to participate in
education, training or approved activity their choices are limited by what is available at that point in time to meet
time requirements. If for example the course that most suits their interests and goals is not commencing within the
time frame the push is to get them into something rather than wait even a short period outside the time frame. The
consequences of this are poor engagement and service satisfaction from a job seeker perspective and compliance
risks for those providers attempting to tailor services or whom poor engagement has resulted in delay. There are
inefficiencies through connecting ESL’s to courses other than those most suited with providers noting wasted

           National Employment Services Association – Response to the APESAA Discussion Paper              18
resources placing them into less suitable courses results in a high dropout rate. Providers also note a high rate of
transfers by ESL’s trying to avoid activities they do not want to do.

The ESS system does not support easy tracking of groups of job seekers such as ESL’s. Clarifying compliance
requirements have been met requires considerable navigating through the system to individual files and across a
number of screens. Improvements in the design of the support to support improved management of compliance
requirements more easily would require significant investment but would better support reduction in administration
and tailored service provision. Likewise, a reduction in the rigidity of rules would enable a more individually tailored
response that potentially could deliver superior benefits.

As the industry peak body we also recognise that in relation to achieving improvements to tailored service provision
there is scope for improved workforce development. We note that the level and complexity of current arrangements
requires intensive resources to be invested in training staff in process and rules rather than development of practice.
We observe that the emphasis on process to ensure compliance and the focus on economic outcome performance
has led to a more limited view of the applicability of a broader case management approach in employment services.

            National Employment Services Association – Response to the APESAA Discussion Paper               19
Topic 4 - System design: Empowering job-seekers

Preliminary findings                                      Possible reform themes

Job-seekers are often vulnerable when they receive Program Empowering job-seekers, including with regard to the design of the
services, and may feel disempowered by the Programs and Programs, and arrangements for receiving and acting on job-seekers’
their design.                                              complaints.

Comments on Preliminary Findings
The employment services industry acknowledges that many job seekers are often vulnerable and feel
disempowered. Engaging job seekers in the development and implementation of their Employment Pathway Plan
is essential to the achievement of sustainable employment outcome. Genuine engagement is based on the
individual feeling they are empowered participants who have a say in the decisions that affect them. Providers
understand the need to work with job seekers to understand their individual needs and aspirations and design
assistance that helps them to meet their goals. However, in essence job seekers have limited options as much of
the employment services framework is based on requirements which both provider and job seeker must meet.
Response to consultation questions
Are there sufficient arrangements in place for receiving and acting upon job-seeker complaints? How could
these arrangements be improved? Are there other system changes that would empower job-seekers?
The current arrangements for receiving and acting upon job seeker complaints are generally considered adequate.
Providers have requirements to provide job seekers with information relating to the Service Guarantees, Code of
Practice and inform them of complaints management process including the DEEWR Customer Service Line and
Complaints Resolution Management Services in DES. Providers are required to maintain a register of all complaints
received and demonstrate that they have been resolved in a timely and appropriate manner. The framework is also
supported by the work of the Commonwealth Ombudsman who can investigate services through complaint
handling, own motion investigations and reporting delivered by most private contractors for the Australian
Government, including employment services. The Ombudsman office is active and meets with a variety of
stakeholders including service users, welfare and peak bodies such as NESA to gain insight into program
administration a number of times per year and is always open to feedback.

Employment services providers have indicated that the framework would be enhanced by the dissemination of
reports on complaints received to enable them to more actively benchmark their organisations customer service
performance. Providers understand that many complaints directed to the Customer Service Line reflect
dissatisfaction with Program design and policy rather than service delivery. There is little understanding of how this
information is used to inform development of the framework.

Genuine empowerment is based on sound knowledge of rights, responsibilities and options.                   There was
considerable feedback that job seekers often arrive for their initial appointment with little understanding of what to
expect, generally noting that Centrelink said they had to come. Most job seekers are referred following a telephone
interview as part of their income support application. From all accounts the level of information provided to job
seekers is minimal. The key message job seekers hear is that it is compulsory to attend if they are seeking income
support. Strengthening communication with job seekers at the point of referral would support empowerment and
facilitate the engagement process. The industry believes that sound expectations management is required to
ensure that job seekers understand the benefits and also limitations of services. We note for example, that many
Early School Leavers attend employment services for assistance to achieve their goal of finding employment, often
without any understanding of their requirements to be engaged in education or training or other approved activity.
When advised these young people perceive that the provider is making this determination rather than following
contractual and legislative requirements.

Providers understand that the intent of the Service Guarantees is designed to empower job seekers and inform
them of what they can expect in the way of assistance. However many consider that they are written in a manner
which is ‘promotional’ and leads to unrealistic expectations. This is an issue which has been particularly evident in

             National Employment Services Association – Response to the APESAA Discussion Paper                   20
job seekers referred to Stream 1 and Stream 1 Limited Services and regarding guidelines for use of the Employment
Pathway Fund.

We note that many providers implement strategies to actively gather client feedback and monitor their customer
service. Providers note caution in interpreting a high level of complaints as a negative feature of an organisation.
Many commented that developing a culture of empowerment and responsiveness to job seekers facilitates the
complaints process as an active contribution to continuous improvement. As most quality management systems
support it is not the number of complaints but repetition of the same issues and lack of corrective and preventative
actions that is problematic.

DEEWR conducts post program monitoring, surveying job seekers and employers regarding their interactions with
providers. Providers are advised of overall results of the monitoring and any issues regarding compliance with the
DEED are individually followed up through contract management. Unfortunately, the complexity of arrangements
and jargon used in employment services can create confusion for job seekers and employers who may report issues
that suggest a compliance issue but which in fact reflects an issue of understanding. There is considerable
administration involved in responding to requests for evidence to verify compliance.

Providers understand that there are confidentiality considerations however more detailed information about survey
responses could provide a significant source of information for continuous improvement to service provision.
Providers are not given sufficient information to be able to identify the job seekers surveyed or which sites they
were serviced at and therefore cannot effectively review practices. For example they cannot identify whether a
particular consultant is receiving superior satisfaction results and therefore cannot take advantage of that to
disseminate better practice. We understand that job seekers and employers are advised that their response will be
confidential to facilitate a higher participation rate. An alternative approach is to ask the job seeker or employer if
they have objections to the provider being given a summary of their feedback i.e.: your response will be confidential
unless you agree otherwise. A critical element to being empowered is the knowledge that concerns will be acted
upon. Without more specific information the provider is unable to address dissatisfaction in a strategic manner.

           National Employment Services Association – Response to the APESAA Discussion Paper               21
Topic 5 - System design: Innovation of practice

Preliminary findings                                           Possible reform themes

Benefits are expected to flow from encouraging an innovative Encouraging greater innovation among providers. This would include
approach to practice. The scope of innovation by ESPs could be encouraging ESPs to innovate in the design and administration of services,
expanded, and the drivers of innovation could be strengthened. and to identify smart ways to comply with Program requirements.

Comments on Preliminary Findings
The industry agrees that current arrangements have continued to limit the level of innovation exercised by
employment services providers. The concerns of compliance risk, the competitive environment and short contract
term have reduced innovation as well as the levels of collaboration and sharing of better practices. The
achievement of evidence based practices in service delivery and administration require opportunities to trial and
measure the outcomes of different initiatives. In this sense to be more conducive to innovation the framework must
develop a higher degree of tolerance for risk.
Response to consultation questions
How can ESP innovation be further encouraged? Is there sufficient latitude in the Programs for ESPs to
innovate in how they comply with system requirements and how they administer services? Are there sufficient
drivers to encourage this type of innovation?

In the current environment innovation is seen by many as a compliance risk. Providers are aware that contract
managers are charged with identifying better practices and will share this information more broadly. As such it
should be noted that providers may also be selective in the practices that they make known to protect their
intellectual property and relative market advantage.

We also note when asked about capacity to innovate a common theme in the responses was providers’ experience
that innovation is not always initially considered good practice and may draw unwanted attention from contract
managers, before effectiveness of initiatives are assessed. Some providers noted that to get around this they
embarked on trials of innovative practices quietly and only when they had evidence to demonstrate employment
outcomes shared this information with contract managers. It is noted that many report that they fully fund such
initiatives and delivery outside standard contact arrangements. As such the appetite for investment in innovation is
restricted with the safer option to stick to what is known to work and is affordable. This is particularly the case in
relation to compliance with system requirements and how services are administered. There have been many
examples over the years where an innovative approach to meeting requirements has led to downstream recovery
action, not because services were not delivered but an inability to demonstrate compliance with evidence
satisfactory to the purchaser. This has contributed to the current climate where many providers collect excessive
documentation and duplicate systems.

Reducing the volume of rules, simplification and clarity of evidentiary requirements and improved automation of
systems such as interactivity with Centrelink systems for declared earnings would achieve improved administration.
In addition longer contract periods and improving the level of trust between provider and purchaser would also
assist. This could be supported by initiatives such as the establishment of a standing committee as discussed
Is there sufficient scope for ‘healthy collaboration’ between ESPs?
The competitive framework restricts the appetite for collaboration. While generally providers are generous with
information and support of each other at a macro level this does not commonly flow on to the service delivery
environment. There are networks of providers who share better practice information and engage in mentorship
type networks to support other providers. This largely occurs between providers who are believed not to share
competitive interest in the same labour markets.

The competitive tendering requirements, ongoing viability challenges and other concerns such as potential
interpretation of collaboration as collusive trade practice, limit in some instances collaborative practice but there are
also providers and locations where there is healthy collaboration. Unfortunately, Program design does not make it

              National Employment Services Association – Response to the APESAA Discussion Paper                             22
possible to share recognition for outcomes achieved by collaboration. For example if one provider places another
providers’ job seeker into work they will receive the job placement recognition. However, this is outweighed by the
13 and/or 26 outcome recognition which are attributed to the provider with whom the job seeker is attached. In
essence the provider will be disadvantaging themselves on a comparative performance basis if they assist another
provider’s job seeker to find work. Concerns about such issues often results in limits to providers being jointly
engaged in local initiatives.

We note that the provision of local leadership through for example the Local Employment Coordinators can
positively affect this dynamic with providers feeling more secure in the equity of arrangements. NESA has
advocated for the inclusion of an industry led Labour Market Intermediary role to enhance cooperative service
delivery, better and more coordinated services to meet the needs of medium to large employers and deliver more
outcomes for job seekers.

           National Employment Services Association – Response to the APESAA Discussion Paper           23
Topic 6 - System design: Accreditation and auditing of providers

Preliminary findings                                            Possible reform themes

Compliance requirements in the Programs are relied upon to Assuring the performance and capability of ESPs through a new
do much of the regulatory ‘heavy lifting’, unlike in other sectors accreditation scheme, linked to new industry standards for the delivery
where there are multiple sources of assurance about providers’ of employment services. It is noted that:
conduct, such as accreditation schemes.                                analogous accreditation arrangements exist in the education, health
                                                                       and aged care sectors; and
                                                                    accreditation works best when providers are mature and have the
                                                                    organisational capacity to invest the time and resources that
                                                                    accreditation systems require.
                                                                Assurance could also be obtained through more frequent auditing of ESPs.

Comments on Preliminary Findings
The industry generally agrees with the view that compliance requirements in the Programs are relied upon to do
much of the regulatory ‘heavy lifting’, unlike in other sectors where there are multiple sources of assurance about
providers’ conduct, such as accreditation schemes. This reinforces a culture of compliance rather than one of
quality, performance and innovation on which the industry can develop.
Response to consultation questions
What are the potential benefits and costs of establishing a new accreditation scheme for ESPs? Could such a
scheme enable a reduction in compliance requirements for accredited ESPs?
The introduction of accreditation schemes has the potential to support continuous improvement in employment
services through the development of organisational structures, processes, procedures and resources within
organisations to support the delivery of compliant, quality and high performing services. Accreditation schemes for
employment services should reflect the capability and capacity that underpin effective employment services

The benefits of adopting an accreditation scheme have been recognised by NESA for some time. A number of
studies have identified significant operational performance and financial benefits for organizations certified to
industry standards and quality management systems. This experience has been shared by some employment
services organisations who have already adopted quality management systems and standards and report marked
improvement in their operational performance as a consequence. Early experiences in employment services
indicated that generic quality management systems were not necessarily well aligned to employment services with
language such as ‘non conforming product’ being inappropriate in a human services setting.

NESA has initiated an industry driven effort to develop the Employment Services Industry Standards. ESIS was
developed with significant industry participation and consultation with external stakeholders. This consultation
included the aged care and health sectors about their experiences in the adoption of standards. These standards are
currently being assessed for accreditation by the Joint Accreditation Services for Australia and New Zealand
(JASANZ) who also manage accreditation for the Disability Service Standards and other quality systems such as
ISO. The purchaser can have reassurance that third party certification bodies provide independent confirmation
that organizations meet and maintain the requirements of the standard. JASANZ audits certification bodies to
ensure that audits are conducted and certification are issued appropriately.

Employment Services Industry Standard (ESIS) consists of seven overall principles which contain a number of
elements. The seven principles are:

1.       Leadership and Management                                       5.       Human Resources
2.       Strategic Planning                                              6.       Data, Information and Knowledge
3.       Markets and Customers                                           7.       Organisational and Operational Outcomes
4.       Products and Services

              National Employment Services Association – Response to the APESAA Discussion Paper                              24
Providers recognise the benefits and in principle support the implementation of ESIS. Our extensive consultations
indicated that there were two central concerns about the adoption of industry standards. The first of these was
adding regulation to an already heavily burden framework of contract management and compliance requirements.
While the standards are seen as more conducive to developing quality and performance the industry identified that
the risk of duplication with additional costs and administration would minimise the benefits. Feedback is that
providers support a move to an accreditation system if there is a significant rationalisation and reduction of the
regulation and compliance controls which may be duplicative. For example an accreditation framework should
supersede many of the KPI3 measures of quality currently in place. Such a rationalisation would reduce burdens on
both provider and purchaser and potentially allow those monitoring costs to be redirected to support quality
services and better practices.

The second central issue is the opportunity to recoup investment through productivity and performance gains is
unlikely to be achieved in a single three year contract. The implementation of standards and quality management
systems can be resource intensive however feedback indicates while not immediate the return on investment is
potentially worthwhile. Longer contract terms as well as additional financial assistance to support adoption of
accreditation as is available to Disability Employment Services would address these concerns. In this regard it is
important to note the level of support for implementation required from all stakeholders to realise the potential
Should ESPs be subject to more frequent auditing? Could more frequent auditing enable a reduction in other
compliance requirements? Should the auditors be independent of DEEWR?
There are two areas of audits, those associated with contract management and those with accreditation systems
such as the Disability Service Standards. With regard to auditing of accreditation systems the current arrangements
for annual surveillance audits are considered satisfactory. We note that this is more frequent in comparison to a
number of other industry standards and quality management systems where the duration between surveillance
audits is allowed to lengthen where the organisation has a positive assessment history. More frequent audits will
result in substantial additional costs that are considered unlikely to deliver commensurate improvements to quality,
compliance or red tape reduction.

Major strengths of independent auditors in accreditation schemes is that the certification bodies are specifically
qualified to undertake the task and themselves are subject to audit to ensure the consistency and quality of their
processes in issuing accreditation. While stakeholders such as DEEWR may contribute to the development of
standards and auditing processes through scheme management processes such as technical reference groups the
auditors should remain independent of DEEWR.

It is the understanding of the industry particularly in relation to Job Services Australia, that the level of ‘auditing’
currently undertaken through contract management is intensive. While face to face audits may occur only a few
times per year desk top monitoring and auditing is believed to be regular and ongoing. This includes monitoring
and auditing conducted regularly in specific areas such as KPI3 or where identified issues or risk present the need for
further investigation such as implementation of the early school leaver policy. Feedback from the industry
indicates that the frequency of auditing in itself is not the issue and an increase in frequency is unlikely to contribute
to improved arrangements.

Provider feedback indicates that the introduction of the Charter of Contract Management and the new approach
adopted has strengthened the purchaser provider relationship. However, scope to strengthen the auditing
framework was identified, particularly through robust adoption of continuous improvement principles which could
assist with reduction in compliance activity (Government required and provider initiated) through building improved
communication and confidence. This theme was apparent throughout the consultation process in preparing this
response with comments such as “a transformational rather than transactional model should be adopted”, “we need
a more solutions focused contract management framework” and “auditing is still all about the “Big Stick.” Providers
noted while they recognised compliance as critical the complexities intrinsic in employment services should demand
more emphasis on better practice and development of innovative solutions.

            National Employment Services Association – Response to the APESAA Discussion Paper                 25
As part of the on-site audits, providers are given both verbal and written feedback regarding positive observations
and areas for improvement. However while desk top monitoring and auditing is occurring regularly communication
regarding observations most often only occurs when issues are encountered. This may be intended to reduce
perceptions of micromanagement and intrusive contract management. However, the lack of feedback has
contributed to provider insecurity and perceptions that auditing is solely focused on finding fault. In the absence of
feedback providers are unsure about the level of monitoring that is occurring behind the scene and the Departments
satisfaction with their processes. More frequent feedback about desk top audit results would offer greater
reassurance to providers.

It is critical for continuous improvement that providers are given sufficient information to effectively and efficiently
take corrective actions. Providers’ report that more transparent feedback about issues identified with possible
solutions would assist to strengthen practice and understanding of guidelines. Feedback should provide specific
information about the scope of the audit, files reviewed and issues identified (positive and negative) to enable the
provider to efficiently take action including easily being able to identify if issues are systemic or related to practices
adopted by individual consultants or sites. To illustrate, in the initial implementation of KPI3 measures many
providers were advised of how many Employment Pathway plans were assessed as failing to meet requirements but
not any supporting details such as job seeker details which made identifying files which required remediation
arduous. The improvements to feedback processes allow providers to efficiently and promptly take action, or as has
been the case, to present further information for a review of the assessment. Providers also regularly noted that the
lack of broader feedback also reduces opportunity to promote good practices and recognise staff whose work was
reviewed which would support a more positive perception of monitoring and audit processes.

The industry acknowledges that the complexity of arrangements and the number of variables which may result in a
different determination from one case to another contributes to the perception of inconsistency. While the
consistency of information is generally considered to have improved there are continuing reports that further efforts
are required in this area.

Providers’ report where they have multiple contract managers or when contract managers are changed they often
receive different interpretations on guidelines and feedback about processes used by their organisation. A number
of providers also noted the frequency in which delays in receiving responses to requests for clarification occurred
when contract managers escalated issues to national office. This was seen as further demonstration of the
excessive complexity of arrangements and the challenge in being confident of interpretations given. From
experience providers recognise the high risk of major recovery action if systems and processes previously
considered effective are later placed in question particularly given there is no limitation on how long or often files
may be subject to audit. This contributes to a lack of confidence and drives many providers to excessive
administration and duplication of systems, just in case.

There were mixed views and a range of questions raised regarding the adoption of independent auditors to conduct
contract compliance audits. It should be noted while there were issues raised as to the manner in which current
auditing occurs providers generally conveyed a positive perception of contract managers, and particularly of those
very experienced. Comments regarding the workload of contract managers and the breadth of expertise and
knowledge required to do their role were common. A further common theme was the lack of transparency in the
measures used to monitor and assess the consistency or effectiveness of the contract management framework.

The value of independent compliance audits was questioned with many commenting that it would depend on how
this function was separated in order to achieve a reduction in administration and improved consistency. There were
further concerns that the dynamic nature of the policy environment and frequency of changes to guidelines and
introduction of new initiatives could make effective separation difficult and result in increased administration if
there was inconsistency between the purchaser and auditor. There were some views expressed that review of the
contract management role may be more effective. In contrast there were many views expressed which supported
the separation of the compliance audit role from DEEWR to an appropriate independent body. A common theme
was that such a framework would offer a more transparent process and should enable a more equitable balance of
power in the audit process.
            National Employment Services Association – Response to the APESAA Discussion Paper                 26
While there are provisions for providers to do so, a number of providers discussed their reluctance to challenge the
purchaser about their determinations. The feedback indicates that while many providers use processes available to
them, and escalate issues as required, others do not have the confidence or trust to do so. Many considered that
removing audits from DEEWR and contract management had potential to enable a stronger focus on better and
innovative practices as well as greater transparency, accountability and other support functions.

In giving feedback a number of providers raised the framework used in the United Kingdom which utilises
independent assessment as well as that introduced in Job Capacity Assessments for quality. It was recommended
that DEEWR maintain a dispute resolution role in the audit process. Providers stressed that if audits were
conducted by an independent body that there was a need for transparent auditor - provider communication to be
prioritised in protocols in order to achieve a fair and streamlined system.

Many providers considered that without the auditor-provider relationship being central that an independent system
would be unlikely to contribute significant benefit. There was a view that an escalation of administration would
occur if structures required communication through DEEWR. Submissions of audit reports were offered as example
of how the system could be counterproductive to reducing administration. Providers indicated that there would be
an absence of due process if audit reports for example were forwarded to DEEWR prior to providers having
adequate time to clarify any issues or present further information. Such a process was seen to be potentially
inefficient and administratively burdensome if it became necessary for further evidence to be passed between the
stakeholders to resolve any matters.

           National Employment Services Association – Response to the APESAA Discussion Paper            27
Topic 7 - System design: Professionalising the workforce
Preliminary findings                                        Possible reform themes

The providers’ workforce is facing significant pressures.   Professionalising the employment services workforce, with agreed
                                                            knowledge, skills and competencies.
                                                            As with accreditation, professionalising the workforce requires that there
                                                            be sufficient resources and capability in providers so they can make the
                                                            necessary investment in training in an acceptable timeframe.

Comments on Preliminary Findings
Providers agree that the employment services workforce is facing significant pressures. There is little question that
in a human services industry that staff are the most critical factor influencing performance and service quality of the
industry. Evaluations and research conducted by DEEWR into better practices within the employment services
Programs have also acknowledged the influence of staff on performance.

NESA believes that there are a range of issues impacting on the employment services workforce one of which is the
need to raise the professional profile of the industry. However in order to achieve professionalization consideration
of the broader issues impacting on the workforce must also be addressed.

NESA members have held long standing concerns about the attraction and retention of appropriately skilled and
experienced staff. The loss of skilled staff from the industry and high levels of staff turnover has been a continuing
issue of attention since early in the implementation of contracted employment services. NESA in conjunction with
Jobs Australia have conducted Remuneration Surveys in 2002, 2004 and 2008. In 2010 NESA also conducted a
Workforce Development Survey which included remuneration analysis. These surveys and feedback from the
industry provide insight into the challenges of recruiting and retaining staff.

The average rate of turnover (voluntary and involuntary) for all organisations in 2012 was 28.3% which was
marginally less than the average rate of 30% in 2008. 80% of all staff turnover was voluntary i.e. resignations. 71%
of participating organisations indicated that the rate of staff turnover was either the same or higher than for the
previous year. All surveys indicate no evidence that the size of the organisation was a predictor of either higher or
lower turnover.

The survey series indicates that employment services organisations are improving their staff retention with the
proportion achieving turnover of less than 15% growing from 6% in 2004 to 15% in 2008 and most recently 20% in
2010. The average length of service of key personnel working in direct client services with their current organisation
is quite brief, between 2-4 years. In contrast senior managers have on average a service period span of 4-12 years
with their current employer. The surveys indicate that there are a variety of factors affecting the stability and
development of the workforce.

Purchasing arrangements for employment services result in job insecurity for the employment services workforce.
There is strong evidence that the short term nature of employment services contracts as well as added pressures in
the transition, business reallocation and concluding phases of contracts contributes particularly to frontline staff
turnover. The contractual environment in which employment and related services operates does not offer
guaranteed business levels. The volume of staff required to meet contractual requirements is linked to economic
conditions and the level of unemployment in local labour markets. As such a change in conditions may result in the
need for organisations to adjust staff levels and profiles accordingly through strategies such as recruitment,
redeployment or redundancy within the contract period.

There is a high degree of movement of staff between provider organisations during contracts and as a result of
purchasing. An observation is that the tight time frames applied to transition and contract renewal points create
additional competition for staff. In addition to workers displaced the industry observes higher levels of mobility as
existing workers also seek improved conditions and career advancement opportunities.

               National Employment Services Association – Response to the APESAA Discussion Paper                         28
The industry would support development and implementation of initiatives such as those applied in the
transition to Job Services Australia to facilitate staff movement between incoming and exiting providers to
minimise a loss of skills from the industry.

The loss of skilled staff was particularly evident in the first two contract cycles of Job Network which were subject to
full competitive tender and resulted in significant reduction in the number of providers contracted. It should be
noted that while provider organisations may win repeated contracts that their geographic footprint and business
levels can change significantly at purchasing points. This can result in displacement of staff including from high
performing sites, which further reinforces job insecurity.

Procurement arrangements which include longer contracts and options for contract extension or ‘Invitation to
Treat’ are supported as means of supporting workforce development and skill retention.
Developing an employment services workforce requires significant investment. As with any business organisations
face challenges in determining the level of investment in their workforce that will yield a productivity return with the
length of the contract being a consideration. Work in employment and related services, involves complex guidelines
and customised operating systems. Every person who is newly employed in the industry takes time to become fully
productive regardless of their skills and qualifications. The 2010 survey indicated that the time-lapse to ‘full
productivity’ was approximately 6 months. This period is generally absorbed with training in the system and
requirements of the Program. Many in the industry describe the induction phase of staff development as focused
on process. There is considerable investment made in learning and development of employment services staff
however the complexity and dynamic nature of arrangements requires resources be directed at keeping staff
current with program rules, procedures and policies. NESA believes that the level of resources and attention applied
to procedural training reduces that available for professional and practice development.

In the 2008 Remuneration Survey 22% of voluntary exits were as a result of decisions to change career or being
dissatisfied with the work environment. In 2010 NESA surveyed these factors independently and found 12% exited
due to decisions to change career and 12% as a result of being unhappy with the work environment and level of job
satisfaction. The emphasis on procedure and requirements in employment services has been cited as a driver of
dissatisfaction. Staff report that the lack of opportunity to fully apply their skills to genuinely tailor individual
assistance rather than meet requirements and the amount of ‘administrivia’ involved in roles were significant issues.
In addition performance pressures keep the focus on volume of outcomes with insufficient recognition placed on
social outcomes achieved in the job seekers preparation and development towards work.

A reduction in the level of service prescription, complexity of guidelines and levels of administration will assist
to strengthen job satisfaction and the utilisation and retention of skills within employment services.
The work of the Australian employment service industry involves providing employment assistance to people
including many who may be experiencing complex and challenging circumstance and highly dysfunctional and/or
crisis situations. As is the case with any endeavour in human services fulfilling such roles has potential to result in a
deleterious impact on the staff empowered to help those people. An average of 4.7 working days per employee was
lost over the relevant period on account of illness or injury. 11% of the average employee working days lost due to
illness or injury was work related. 64% of work related absences were due to stress related illness, workplace
conflict and client violence.

Employment services organisations are very aware of their obligations to support and protect the wellbeing of staff.
63.8% of participant organisations in the 2010 Survey offered an employee assistance program (EAP) which offered
professional counselling services to staff members to deal with work and non work related matters affecting
employees’ wellbeing. The industry invests in building staff capacity to deal with these circumstance and we note
that NESA through its professional development program offers training to manage difficult and violent clients
which are highly subscribed. However, there are unresolved issues relating the management of clients who pose a
high risk of poor behaviour including for example violence or stalking. Over the life of employment services there
have been many efforts to develop strategies to better manage the participation of job seekers who are an
identified risk to the occupational health and safety of staff.

            National Employment Services Association – Response to the APESAA Discussion Paper                29
Stronger elements in the employment services framework are required to respond to this issue. It is particularly of
concern where job seekers have a known history of violence or predatory behaviour such as in their interactions with
Centrelink that they are referred to employment services without adequate warning. Incident reporting processes
continue to be applied inconsistently. Furthermore even in cases where there is no identified history but such
behaviours occur there are insufficient alternatives within the framework for managing those clients safely. Options
to verify the job seeker is attached to the most appropriate service where issues such as mental health are
suspected to be present and contributing to such behaviours have been reduced as a result of removal of the
capacity to request a job seeker assessment. Providers’ report that exits of job seekers from the caseload is difficult
to negotiate and transfer of job seekers moves the risk to other organisations and their staff. Incidents have direct
impacts on those involved with ripple effects experienced by the broader workforce and also often family members
continued support of the employees’ work in the industry. A stronger recognition and partnership approach should
be adopted by the purchaser, provider and other relevant stakeholders such as Centrelink in their responsibilities for
the occupational health and safety of employees in employment and related services.

The industry would highly recommend a review of strategies to manage the participation and delivery of
assistance to job seekers who pose a high risk to health and safety of staff.
A major issue for employment services organisation in attracting and retaining their workforce is the opportunities
and competition for skilled staff from other sectors that are able to offer greater staff incentives particularly the
health and social services sectors. Wage competition continues to drive skills loss with voluntary exits in 2010 18%
reported to be to move to a higher paying position including within the sector. The average wage increases over
2009-2010 for employees across all key positions was 2.9% excluding bonuses. This was marginally less than the
increase in the Wage Price Index through the year to June quarter 2010 for all employee jobs in Australia which was
3.0%. The highest increases were recorded in the public sector industries from which we face the greatest
competition for staff-health, education and public administration.

This competition is anticipated to increase substantially following the success of the future Pay Equity
Remuneration Case for Social and Community Services and is considered to be a major issue regarding the stability
of the employment services workforce. While there is a need to continue to develop the professionalism of the
workforce it is clear that an inability to offer comparative conditions to professions with equitable skill requirements
efforts will threaten retention. In addition the capacity of the industry to be responsive to changing conditions such
as occurred with the onset of the Global Financial Crisis requires providers to be able to attract skilled staff. Fixed
price contracts with no provision for indexation, extension of contracts with no review of fee levels and inadequate
transition arrangements all compound to limit the industry’s capacity to keep remuneration levels competitive.

The industry urges the Government to consider future funding arrangements which better enable
remuneration which supports the attraction and retention of a suitably qualified and skilled workforce.
Response to consultation questions
What are the potential benefits and costs of establishing new competency and qualification requirements for
ESP staff? Could this be done in a cost-neutral way?
NESA has been an active contributor to the professional development of the employment services workforce. We
have had a professional development special interest group established since 2001 whose work includes significant
contributions to the development and review of employment services qualifications managed by the Community
Services and Health Industry Skills Council (CSHISC). We note that there are relevant employment services
qualification ranging from Certificate II through to Masters level higher education qualifications relevant to the
industry which encompass generalist and specialist roles such as in disability. We also conduct an extensive
professional development program offering a range of accredited and non accredited training options tailored to
industry needs. Our program includes an annual conference targeted to the needs of the industry leadership as well
as an annual practitioner’s conference designed to support the development of frontline staff. In addition we
conduct a bi-annual international congress in which we have been supported by the OECD to offer insights into
international better practices and support industry development.

            National Employment Services Association – Response to the APESAA Discussion Paper               30
NESA recognises that practitioners in Australian Employment Services undertake a complex and challenging
vocation. Australia’s employment services framework is highly dynamic, often cited as being at the leading edge
internationally and incorporating sophisticated systems and processes. There is a breadth of research, evidence
based practice and experience locally and internationally which make up the relevant body of knowledge for the
employment services industry. There are also many related areas of specialist knowledge that can assist the
delivery of professional practice for specific client cohorts, social issues, physical and/or psychological conditions.
Employment Services has all the characteristics generally prescribed to a profession.

Our recognition and understanding of the issues affecting the employment services workforce led NESA to develop
the Employment Services Professional Recognition Framework (ESPRF). This industry led initiative has involved a
high degree of consultation and participation from members and stakeholders. ESPRF was designed to support
workforce development, strengthen career pathways and build greater recognition of the professionalism of the
industry. NESA work on the professional development framework commenced in 2002 with a project using an
external consultancy which produced a report titled “Towards a Professional Development Framework for the
Employment Services Industry” the recommendations of which have been the foundation of our efforts. The
framework which had been developed is comparable to others in similar sectors such as community services and
allied health.

The process of development included extensive survey of providers regarding typical role structures and
requirements. Analyses of all roles against units of competency from employment services qualifications were
completed. Through this process foundational skills were identified which are included in ESPRF and have since
been formally adopted within the employment services qualifications as core skills sets. In developing ESPRF
appropriate consultations occurred with a range of external stakeholders including the Australian Competition and
Consumer Commission, CSH Skills Council, DEEWR, other professional bodies including Australian Social Workers
Association, Australian Psychological Association and the Australian Career Development Association in addition to
various representatives with relevant legal, insurance and industrial relations expertise.

The Employment Services Professional Recognition Framework contains the following elements:
     A Code of Professional Practice and Ethics
    A professional framework which is primarily based on AQTF competency based requirements from
    employment services accredited qualifications or their equivalent
    Five levels of registration to meet the breadth of workforce needs from potential and new entrants through to
    experienced personnel across entry level and management roles
    Each level is mapped to AQTF competencies, duration of work experience in the industry and incorporates key
    capacity units available through the DEEWR Learning Centre
    Includes requirements for Continuing Professional Development achieved across a variety of areas relevant to
    practice and knowledge to support better practices
     A complaints process to address allegations of breaches of the Code of Professional Practice and Ethic

The costs associated with developing the framework have been considerable and met through NESA resources.
Participation in ESPRF like many other professional recognition frameworks is designed to enable and encourage
practitioners in employment services to be more active in their career development. Registration provides
practitioners access to additional support and resources to develop their skills such as access to reports and articles
as well as networking events including various communities of practice. The costs of participation were considered
in the development process. The importance of the capability of the employment services workforce is evident in
the purchasing and implementation of Programs. However a greater support for workforce retention and
development is required in funding arrangements.

In line with industry recommendations ESPRF will be initially introduced as a voluntary framework. The industry
believes that this will better encourage uptake as a professional rather than compliance driven initiative.

           National Employment Services Association – Response to the APESAA Discussion Paper               31
Topic 8 - System design: Length of contracts and predictability of funding

Preliminary findings                                          Possible reform themes

There is a concern among some ESPs that employment services Longer contracts and/or greater predictability of funding, as a reward
contracts are too short and funding too unpredictable for for providers with a strong track record.
providers to plan and invest adequately.

Comments on Preliminary Findings
There has been a long standing concern among some ESPs that employment services contracts are too short. In a
three year contract cycle the first six months is dominated by transition, there is a mid- term business reallocation
process (JSA) and purchasing generally occurs in the concluding nine to twelve months of a contract. In addition
there are program changes are throughout the contract period some of which are quite significant. Within such a
tight timeframe the constant change and activity impacts on the potential performance of the industry. The
predictability of funding levels has been a constant cause of concern for the industry and the ebbs and flows in
revenue have detrimental impacts on providers and limits their investment in strategies and resources.

Response to consultation questions
Are employment services contracts too short? What are the potential benefits and costs of making funding
more predictable for providers? Should contract length and/or predictability of funding be linked to providers’
record of performance?
NESA has represented the views of the industry in relation to contract duration on numerous occasions, and we
reiterate that the industry is of the view that the terms of the contract are too short and should be extended to at
least 5 years. This time frame is particularly important to progress social inclusion outcomes as well as sustainable
employment participation for those facing the most disadvantage in the labour market. The current employment
services framework requires providers to build effective linkages with a range of business and community groups.
Building effective networks and collaborative service models takes mature relationships. The frequency of
purchasing processes reinforces a short term approach to service delivery and innovation. The industry has
recommended the adoption of 5 year contracts with a mid-term business reallocation process to support
performance and quality objectives.

The business cycle over the life of the program can produce significant variation in revenue despite performance,
which presents major financial, human and resource management challenges. Such variations can destabilise the
performance of the industry and quality of services and has particular impacts on workforce development.
Variations result from a range of factors in addition to changes to the local economy. Providers require the financial
and resource capability to respond rapidly to changes in circumstance through economic and/or policy decisions.
Making funding more predictable has potential for sizeable potential benefits. There is greater support for a
minimum threshold model which offer providers a guaranteed level of funds based on market share for example,
rather than a predetermined absolute model which involves fixing a limit on revenue potential which would reduce
incentives for efficiency and high performance. However, there are also other measures that can be taken to
support more predictable funding.

Ensuring that elements within the broader framework which impact on the effectiveness and efficiency of services
and therefore revenue are operating appropriately is critical in a competitive market. There is a strong case that
providers should not bear the financial brunt of issues created elsewhere in the framework. The experiences of
Stream Service Reviews (which are being removed from JSA) serve as an illustration of the financial implications of
disruption to service delivery and revenue. In some cases providers had financial impacts which amounted to
hundreds of thousands of dollars in lost revenue which cannot be recovered as a result of delays in completion of
reviews. Providers enter into contracts understanding that there is no guarantee of the level of business but should
be assured they will operate within market share tolerances and the independent gateway is facilitating referrals
effectively and fairly. There are some program design areas such as the fluctuation in DES job seeker funding levels
which also result in significant unpredictable changes to revenue levels.

             National Employment Services Association – Response to the APESAA Discussion Paper                         32
There would be clear benefits if providers had more information on which to accurately project revenue. The
performance of the industry can only be enhanced by financial sustainability. Greater capacity to predict and
manage the financial health of an organisation offers a sound foundation for investment in innovation and
development. There are considerable risks to the reputation of the sector and disruption to job seekers and
employers if providers become unviable during the term of the contract. The complexity of DEED arrangements
makes projecting and modelling revenue and expenditure involved in the delivery of employment services Programs
challenging for existing and potential providers. If new entrants are to be attracted into employment services it is
important that they can accurately assess the potential financial benefits and risk for their organisation.

NESA has contracted KPMG on previous occasions to develop a financial modelling tool for providers. The
construction of a reliable tool requires considerable input from DEEWR regarding data and the assumptions
underpinning the proposed employment services program. Without the provision of such information a reliable tool
is not achievable. The tool can also be used during the term of the contract if updated information is provided
particularly on new initiatives for incorporation in the tool. For example policy initiatives such as the announced
changes to income support taper rates can also result in variations to potential revenue not anticipated when
entering into the DEED. Having a financial modelling tool which is updated throughout the life of the contract
would enable providers to more readily project revenue and act accordingly.

Feedback indicated that the change to purchasing arrangements for Job Services Australia compared to Job
Network in relation to market share have had a negative impact. In Job Network providers bid for an ESA market
share with a nominated breakdown at site level. Job Services Australia providers bid ESA market share and
nominated sites. In bidding for Job Services Australia providers had no idea of how many other providers were
intending to establish sites in the same location. As a result there have been considerable inefficiencies with local
areas over or under catered for and sites established with poor alignment to local flow with a higher proportion of
sites not individually viable and requiring cross subsidisation which impacts on the organisations financial health
more broadly. Providers feedback indicates that they consider there should be a return to ESA contracts with
breakdown of indicative site share. There was also a common view that tolerance for market share should be
reduced back to 20% as the proportion of sites operating at the bottom of tolerances (and some below) is

           National Employment Services Association – Response to the APESAA Discussion Paper             33
Topic 9 - System design: Dual providers

Preliminary findings                                        Possible reform themes

Some organisations are providers under both the JSA Program Considering the merit of greater alignment in contracts across the two
and the DES Program. Such organisations must enter into two Programs.
employment services contracts.

Comments on Preliminary Findings
While there is a need for providers delivering both Programs to enter into two employment services contracts and
this does result in additional administration and complexity of arrangements for such organisations there were
mixed views about the potential benefits and implications of greater alignment of the two contracts.
Response to consultation questions
What are the potential benefits and costs of greater alignment in contracts across the two Programs?
A central theme in the feedback was for greater clarification on what ‘greater alignment’ may mean. Such detail is
likely to produce significantly different interpretation and views on the benefits or perceived implications.

Feedback from some providers offering both services indicates that there has been increased alignment in the
format and nature of DEEDS and market share arrangements. They also report that in relation to contract
management streamlining of DEEWR processes is already happening with their contract manager working with
them across contracts DMS/ESS/JSA and incorporating all Programs in performance milestone meetings. These
providers reported that systems development had improved ability to work across the two Program caseloads on an
operational level.

One perspective from providers was that further alignment of JSA and DES is desirable provided the funding and
service delivery models support it and there is not further complexity for either Program.

There was a high degree of feedback, particularly from DES providers that, alignment did not just result in a
modified JSA Program with additional Streams to support job seekers with specialist disability employment support
needs. There was a high degree of concern about the potential for disability services to become too generalized. It
was noted that policy and program development would need to continue to reflect the legislative intent for DES and
the needs of job seekers assessed as requiring specialist assistance. Many were concerned that greater alignment
could result in changes to the eligibility and classifications systems resulting in fewer job seekers being able to
access specialist services in favour of cheaper, but less appropriate services.

There was also a counter view that greater alignment of the two Programs would be beneficial with some
suggesting that a generalist Stream and Specialist Stream within the same program would deliver efficiencies,
greater cross skilling of the workforce and more integrated strategies such as in the area of employer engagement.
In suggesting greater alignment providers noted that purchasing arrangements could still enable organisations to
bid for specialist only, generalist only or both Programs. However a consistent theme within feedback was that to
enable the ongoing quality and level of services the investment in each Program must not be reduced.

The Programs (JSA, DES-ESS and DES - DMS) each have different service models, performance frameworks,
administrative processes, job seeker compliance regimes and different fee structures. As such aligning Programs
will be a highly complex process and damaging if not well conceived, planned and managed.

NESA believes that in order to take an informed position on this issue there needs to be a substantial research and
consultation process undertaken with the industry. Ensuring that there is a transparent process with a high degree
of involvement from the purchaser and industry will be paramount if change is to be pursued and implemented
effectively. Further exploration of greater alignment of contracts should maintain a central theme on how to best
meet the needs of job seekers and particularly of those who already face high levels of disadvantage and social

             National Employment Services Association – Response to the APESAA Discussion Paper                        34
Topic 10 - System design: Stream structure
Preliminary findings                                         Possible reform themes
                                                               Simplifying the JSA stream structure, such as by combining streams 2
There may be merit in revisiting the JSA streams to reduce the
complexity of the Program architecture as a whole, and and 3, or removing stream 1.
establish clearer boundaries between the streams.

Comments on Preliminary Findings
Providers agree that there is merit in reviewing JSA Program architecture to ensure that the design is properly
supporting the objectives for which it was developed. The industry notes that JSA was designed to address a range
of short comings identified its predecessor Programs. There are differing views as to whether simply combining
streams or creating more distinct boundaries between the streams will effectively address the issues being
experienced, particularly if this is to be done in a cost neutral manner.
Response to consultation questions
What are the potential benefits (including reduced complexity) and costs of simplifying the JSA stream structure, such as
by combining streams 2 and 3, or removing stream 1? Could this be done in a cost-neutral way?
In isolation the benefits in the reduction of complexity which can be derived from simplifying the JSA Stream
structure are minimal. Strategies which strip back the administrative complexity within individual requirements and
activities will be more effective in reducing complexity and administration. In considering simplification provider
responses indicated two main themes; any simplification of the JSA Stream Structure should not result in any
disadvantage to job seekers through a reduction in service provision and there should be no reduction in the level of

As has been discussed elsewhere the classification system is based on relative disadvantage and its emphasis is on
supporting the rationing of services in line with modelling for the Program. The industry considers that there are a
substantial proportion of job seekers receiving less than adequate levels of service provision to meet their
circumstance. There is a high degree of concern that simplification could result in more job seekers being
underserviced, providers expected to deliver more, to more job seekers with less resources in real terms.

The industry would support for example the removal of Stream 1 if all job seekers were afforded service provision as
currently in place for Stream 2. On face value, we would not however want to see a higher proportion of job seekers
under serviced by diluting or averaging Stream 1 and Stream 2. We cannot see how such combining would occur
without significant reduction in Stream 2 resources per job seeker. There may be a stronger case for combining
Streams 2 and 3 which are more similar in nature. However more detailed consultation and modelling would be
needed to enable an informed position.

An option which a number of providers considered could have merit but would have to be carefully and
transparently modelled is the reduction in the duration of Stream 1. Durations of 3 - 6 months were noted with
many providers expressing the view the job seeker should then move immediately to Stream 2. Others felt that 6
months was appropriate and the moving into either work experience or Stream 2.

Any simplification of Streams through combining or removing levels should also be accompanied by a
commensurate increase in the period of service prior to movement into Work Experience for the remaining Streams.
This upfront service period, unlike Work Experience, is time restricted and removing a Stream will mean that job
seekers are afforded less time overall engaged in individual case management.

An area that was strongly raised in feedback was the need to significantly review the Work Experience Phase.
Providers’ stress that given there is no maximum duration of participation and requirements for full time activities
are being introduced this element of the Program should be more robust and better resourced to support tailored
services and outcomes for job seekers. There were some suggestions that Work Experience becomes a concurrent
rather than consecutive part of the Stream. We note that Work Experience is inadequately resourced and
addressing this should occur through additional investment and not redistribution of fees.

             National Employment Services Association – Response to the APESAA Discussion Paper                         35
Topic 11: System design: Red-tape reduction advocate

Preliminary findings                                            Possible reform themes

In the administration of the Programs there is no strong internal Establishing within the Programs an explicit and powerful advocate for
advocate with the power to champion administrative streamlining, simplification and red-tape reduction. The red-tape
improvements, simplification and reduced red tape.                reduction advocate or champion would adopt the perspective of job-
                                                                  seekers and providers.
                                                                The advocate or champion would help achieve whole-government
                                                                coordination, including by building linkages between DEEWR, Centrelink
                                                                and other agencies.
                                                                The advocate or champion could be supported and informed by a standing
                                                                committee featuring representatives of job-seekers, providers and
                                                                The performance framework for the advocate or champion could include
                                                                reform targets, eg. administrative burden reduction targets.

Comments on Preliminary Findings
Employment Service Providers agree that currently in the administration of the Programs there is no strong internal
advocate with the power to champion administrative improvements, simplification and reduced red tape. However
there is a general view that such an advocate should be independent.

Response to consultation questions
What are the potential benefits and costs of establishing within government an employment services advocate or
champion with the power to identify and pursue administrative improvements, simplification and red-tape reduction?
There have been numerous attempts to achieve streamlining and red tape reduction with minimal net benefit.
Issues regarding the administrative burden in employment services have been long standing and noted in a range of
consultations and evaluations, including the 2002 Productivity Commission Report of the Independent Review of
the Job Network. The industry is of the view that an advocate with appropriate authority and responsibility would
be an asset in developing solutions to this issue. As a peak body representing the industry we can see much benefit
is having an identified advocate to work with. DEEWR is a significant organisation with many branches and work
units responsible for various aspects of the employment services framework. While each subject matter area has a
view on the necessity and level of administrative requirements having a designated advocated who examines
requirements in the macro context would provide a valued perspective. Communicating with the identified
advocate across all areas would be an efficient way to raise and monitor progression of issues in relation to

The industry acknowledges that the achievement of red tape reduction is not likely to be accomplished without a
focused effort. There was a view that the advocate should be independent even though working within DEEWR to
achieve the task. A champion was not seen as being robust enough with many providers commenting that if the
champion or advocate is a co worker it could be challenging to achieve the change management required.

Is there merit in establishing a standing committee of job-seekers, providers and government representatives, to identify
administrative improvements and opportunities to reduce red tape and compliance costs?
A standing committee could be a valuable forum in which to generate solutions to reduce red tape and compliance
costs. A committee could support the work of the advocate to achieve streamlining and red tape reduction. The
role and terms of reference of such a committee to ensure expectations of participants are clear would be critical. In
addition clear principles which the committee should refer in identifying potential solutions would assist to ensure
that participants stay on topic. We would recommend that a broader range of potential participants be considered
including employers and community stakeholders. To support the participation of job seekers we would
recommend that organisations such as Welfare Rights who assist job seekers to navigate the social security
framework and the Commonwealth Ombudsman who handle complaints about administration of public Programs
              National Employment Services Association – Response to the APESAA Discussion Paper                             36
also be included as potential participants. As the peak body for employment services we would also expect that we
would have an opportunity to participate along with a representative group of providers.

Should Program reform targets, including administrative burden reduction targets, be established?
The industry believes that it is essential to define the extent of the problem through sound measurement of the
current administrative activity and its costs and to establish targets and milestones. The industry considers that the
work needs to be incremental and there should be regular milestones rather than reduction at the end of a lengthy

We also note that there should be a system to classify administrative activity. While administration and compliance
are discussed generically there are those requirements which relate to administration of the DEED in a macro sense
and those which are more closely related to the practice of service delivery. For example while it is a requirement of
the DEED and a compliance issue the need to maintain file notes as in other human services is central to effective
case management. File notes underpin a purposeful approach and quality of services particularly continuity if there
is a change in staff. Administration activity which is more related to service provision should be measured
separately to enable it to be adequately reflected in program design and allocation of resources.

            National Employment Services Association – Response to the APESAA Discussion Paper             37
Topic 12 - System design: Managing changes to the system
Preliminary findings                                          Possible reform themes

A goal of the advocate or champion (above) would be to keep   Establishing new arrangements for managing changes to the Program
driving change in administrative practices as the system      requirements and design. This could involve a staged annual process of
matures and the environment changes. At the same time,        changes which incorporate all the new procedures, so that stakeholders
constant and poorly coordinated change is itself costly.      can anticipate these changes and make plans accordingly in a scheduled

Comments on Preliminary Findings
Employment services providers agree that constant and poorly coordinated change is costly and efforts to achieve
streamlining should be well coordinated and communicated to avoid disruption or unintended consequence.
Response to consultation questions
How should changes to the Programs be managed and implemented?
We note that providers have individual business models and have developed processes and resources to maintain
systems and demonstrate compliance including third party IT systems. It is critical that there is robust consultation
and providers have opportunity to have informed input into decisions and adequate notice of change as partners in
this process. Proposed changes need to be carefully considered in relation to the risk management model, existing
requirements for processes and systems and balanced against capacity for innovation and impact on resources.
Over prescription or lack of clarity in requirements undermines confidence and leads to additional processes and
systems ‘just in case’. A well coordinated approach has potential to increase the trust relationship and improve
provider confidence which could reduce provider initiated unnecessary administration and red tape.

Any major change to the Program architecture should be conducted with transparent modelling of cost and revenue
implications. It is also essential that any changes to services ensure that job seekers are not disadvantaged and
there is minimal impact to those within the framework with established commitments and expectations of the
services and assistance they will receive.

             National Employment Services Association – Response to the APESAA Discussion Paper                         38
Topic 13 - System design: Conflicting DEEWR roles

Preliminary findings                                               Possible reform themes

In the current model, DEEWR plays the roles of ‘regulator’ of      Considering the merits of separating DEEWR’s ‘regulator’ and
ESPs as well as ‘purchaser’ of employment services. In             ‘purchaser’ roles with respect to ESPs, possibly by assigning the regulator
principle, these roles can clash: for example, the regulator and   role to a different agency (new or existing).
purchaser may face different imperatives about the degree of
                                                                   Any major changes to the ‘regulator’ role would sensibly be made in
choice and competition, the level of regulation and the degree     concert with the possible introduction of a provider ‘accreditation’ scheme
of innovation.                                                     as outlined above.

Comments on Preliminary Findings
As the architect, sole purchaser and regulator of Programs and the broader framework in which they operate
DEEWR has a position of immense power in the provider/purchaser relationship. There has been a long standing
view amongst employment services providers that the significant imbalance of power between purchaser/regulator
and provider undermines genuine partnership, trust and due process in contractual administration. This issue was
cited in the Productivity Commissions Report into the Independent Review of the Job Network, 2002 which
reported; “Given DEWR’s position as the exclusive purchaser of Job Network services, with its responsibility for renewal
or awarding of business in each round, many providers could be understandably reluctant to ‘cause a fuss’, especially if
they lack confidence in DEWR’s contract probity arrangements”.

Response to consultation questions
Should DEEWR perform the role of both regulator and purchaser in the Programs?
This consultation question sparked considerable discussion amongst employment services providers. A range of
issues, potentialities and possible structures were raised as providers attempted to assess the advantages and
disadvantages of such development to the employment services framework. A consistent theme of consensus was
the need for an independent umpire to support the actual and perceived fairness in current arrangements. This was
seen as essential not only to address the power imbalance between purchaser and provider but also to ensure that
the Australian public were assured of the best possible services, accountability and transparency.

The Productivity Commission’s observations from 2002 and while clearly referring to the Job Network are relevant
to the current considerations about whether there is potential to strengthen the framework through the
introduction of an Independent Regulator to employment services and mirror the contemporary discussion amongst

As indicated in the Commission’s report the position of DEWR as a monopsony placed them in a position of
substantial bargaining power. However, this was not seen to be an issue at that time as DEWR operated with the
intent of maximising outcomes for a given budget rather than the pursuit of profit. It did however also point to the
deficiencies arising from the use of that power which resulted in issues such as compliance burdens and unilaterally
imposed contractual change which it recommended were addressed.

The Productivity Commission also explored the concept of an independent regulator commenting that it was a
sound principle to separate the regulator from the funding agency. In its comments the Commission noted that
vested interest in success could result in potential problems and in particular worked against maximum
transparency as a result of the joint role of purchaser/regulator. The Commission observed that there were
potential advantages as well as disadvantages to the Independent Regulator. While an independent regulator was
“more likely to bring a more balanced view to monitoring, reporting and transparency than the funding agency” as well
as “increased public confidence” the main disadvantage was potential cost.

The Commission indicated that the establishment of an independent agency could increase compliance costs as
providers would have an additional government to interact with and may increase overall administrative cost
because there would be some inescapable additions to overheads. It however also observed that the net additional

              National Employment Services Association – Response to the APESAA Discussion Paper                                  39
could be minimised by such mechanisms as keeping the body small, avoiding the duplication of responsibility by the
independent body or heading the agency with a part-time chairperson to minimise costs and reinforce

The Commission indicated that alternatively adopting the recommendations outlined in the 2002 report particularly
those in relating to transparency and accountability, and those of chapter 12 relating to compliance and monitoring,
would ameliorate the existing problems perceived by some participants. Another or additional potential approach
put forward was to increase the role of existing monitoring bodies such as the ANAO or the Ombudsman.

The Commission outlined that if an Independent Regulator was pursued:

“Desirably, it should be completely independent of DEWR and report directly to the responsible Minister, as well as
publicly. Appointing as its chairperson someone completely independent of past and present stakeholders in the Job
Network would be of considerable value. The Commission considers such a body should not include representatives of
specific interests such as job seekers or Job Network providers — this would inhibit independence and the use of the
executive power such a body would need.

The body, if established, should be given clear, unambiguous responsibilities and powers. For example, its functions and
powers could relate to ensuring quality of service provision, acting as an ‘ombudsman’ for complaints from job seekers
and providers, evaluating program outcomes and examining potential improvements. It could also take responsibility for
ensuring that the Commission’s recommendations about transparency, accountability, monitoring and compliance
(chapters 5 and 12) were implemented, if these were accepted by the Government”.

In concluding the Commission indicated that assessing the balance of advantages and disadvantages was difficult.
It also anticipated “that the justification for the agency should diminish over the medium term as the framework of the
Job Network settles down and its substantial reliance on tender and contract arrangements declines”.

Given the anticipated development of the framework the Commission considered at that time a better approach
than an Independent Regulator was to firstly adopt the Commission’s recommendations relating to transparency,
accountability, monitoring and compliance. The Commission went on to say however, “if significant problems do
continue into ESC3, the Government should give consideration to the establishment of a body independent of DEWR
with the following range of functions related to the Job Network: monitoring the quality of service provision; evaluating
program outcomes; examining and recommending on potential improvements; and protecting the interests of job
seekers and providers in relation to DEWR and Centrelink”.

A decade after the Report many of the recommendations put forward in by the Commissions have not been
adequately addressed and the same underlying issues in the administration of the framework are the subject of this
current discussion paper. In its conclusion that issues could be addressed without the need for an Independent
Regulator the Productivity made assumptions about the anticipated development of the framework as services
matured, but these have not been realised.

In discussions providers highlighted what they perceived to be a major source of vested interest in the current
administration arrangements. Many commented that it was not only an issue that DEEWR are the purchaser and
regulator, but this is compounded by DEEWR also being the architects of policy and Programs within the
framework. A number of providers expressed the strong view that they considered there was a huge reluctance on
the part of the Department to accept responsibilities for weaknesses in the framework. Providers noted many
instances where there were issues as a result of policy or program design and considered that the Department too
often deflected causation on provider behaviour.

Many considered that a conflict of interest for the Department in the fair management of contracts arises from the
desire to meet its key performance indicators and responsibilities to Government. As indicated in the Productivity
Commission’s report the Department is expected to achieve efficiencies by gaining more outcomes for less
expenditure. Providers view that desire for achievement has encouraged practices in the administration of
            National Employment Services Association – Response to the APESAA Discussion Paper                40
contracts which are unfair. For example the industry notes continued poor practice in consultation, negotiation and
notice of contract variations, significant cost shifting and increases in requirements without compensation with
options limited to accept decisions or hand back the contract. There are significant risks for the quality of
employment services if there is a relentless push on more outcomes for the same investment. Over the operating
period there have been significant cuts in real terms to investment, particularly at the individual job seeker level.
We note that in the past the industry has called for service level agreements that ensure those deliverables required
for providers to achieve their objectives are in place when they should be operating as intended. Support for such
principles was supported by the Commission who recommended that “a target maximum delay associated with
special needs re-assessment, subject to automatic penalty payments to Job Network providers if this period is
exceeded”. Service level agreements have never been achieved and as indicated elsewhere in this response;
providers are given no option other than to continue to absorb the impact of issues arising from broader areas of the

There have been repeated calls for DEEWR to be more transparent in its management of contracts such as releasing
data about average time periods to respond to issues or to conduct processes such as special claims. While
benchmarks have been introduced within the Charter of Contract Management there is still little reciprocal
accountability being demonstrated to employment service providers. We note that some providers (who did not
want specific details recorded for fear of identification) indicated that some of the weaknesses in the framework had
contributed to reduced performance, including, the impact of which had been completely ignored in business

As indicated earlier a fundamental issue for providers is that they have no one with authority that they can address
issues with if they are in dispute with DEEWR. A number of providers commented as they did in consultation with
the Productivity Commission in 2002 that they were reluctant given the imbalance of power and the lack of
transparency of the contract management framework to challenge issues strongly. Whether or not such reluctance
is warranted in reality, or perception it impacts on the effectiveness of the framework.

The feedback from industry indicates that in order to achieve the adoption of the principles of earned trust;
administrative simplicity and best practice; innovation; and outcomes-focused, risk-based administration
particularly as they relate to improving quality while reducing red tape and ‘micromanagement’ this is most likely to
be achieved with the introduction of an Independent Regulator. Many providers commented that an opportunity to
dedicate more emphasis and resources on program and policy design by DEEWR rather than on micro process, will
also contribute to better services. As was indicated in the Productivity Commission’s report the structure, authority
and responsibility of such a body will have significant influence on cost and effectiveness.

The industry recommends that in pursuing such a model there is strong genuine consultation led by an independent
person with significant input from all stakeholders.

           National Employment Services Association – Response to the APESAA Discussion Paper             41
Topic 14 - Data collection

Preliminary findings                                               Possible reform themes

There are opportunities to improve data collection, particularly   Better data collection, which would underpin a stronger focus on Program
with respect to data about performance and outcomes.               outcomes, innovation and administrative improvement.

Comments on Preliminary Findings
Employment Services providers agree that there are opportunities to improve the availability of data particularly
with respect to supporting performance and outcomes. A vast amount of data is collected through the IT system
however most of the data is not directly accessible to providers to support performance or quality objectives. As a
consequence many providers have initiated duplicate systems so they can have the data to inform evidence based
practice development and monitor their service delivery objectives.
Response to consultation questions
What are the key opportunities to improve data collection in the Programs? Is there scope to simplify or
consolidate data collection?
There is a vast array of data entered into the system about the activity of providers as well as characteristics of the
job seekers and employers they service. A key theme heard in consultations was the need to transform compliance
focused data into performance focused data. Essential to this is that the data collected becomes more accessible to
providers in a form that can assist them to perform and continuously improve their service models. Many providers
commented that the perceived level of ‘administrivia’ was reinforced by the fact that most of what was recorded did
not seem to be used and was impossible for providers to extract.

Providers report that while the volume of reports and access to data is increasing, they are still limited. Providers
report that with the data currently available through Bulk Data Formats (BDF) the data is difficult to extract and that
data fields generally need to be ‘cleaned’ before they can effectively be used. This is both a time consuming and
costly exercise however if providers want to track underpinning performance indicators and trends such as with
particular cohorts of job seekers, the available standard reports are not sufficiently comprehensive.

Comparative data is essential and this needs to be designed so matches all areas of contract compliance assessment
and service delivery requirements. The framework should ensure that contract managers and providers have access
to the same data from the same source.

There needs to be stronger alignment between policy implementation and ESS development to minimise gaps from
when new policy is introduced and reports, tools or systems support becomes available. There was comment that
greater flexibility and resources to the DEEWR reports team to enable more timely responses to policy changes and
resultant impacts on service delivery and management would be beneficial. The industry acknowledges the
extensive work that DEEWR IT branch undertake and enormity of the forward work schedule. We anticipate that a
reduction in complexity of arrangements will alleviate the burden of investment and resources deployed for

              National Employment Services Association – Response to the APESAA Discussion Paper                                42
Topic 15 - Duration of data management

Preliminary findings                                                   Possible reform themes

The duration of data retention and management was raised as a          Considering improved arrangements for the retention and
concern by several consultees. It was suggested that, because          management of data. This could include considering a system whereby
the system did not retain job-seekers’ personal data, there were       providers can dispose of data after a certain time has elapsed unless they
unnecessary administrative costs when job-seekers returned to          are explicitly notified that the data must be retained for a specified longer
the system after a period of work or study.                            period.
There are competing imperatives here: it is important that data is
available when it is needed, but it is also important that providers
and other system participants are not required to maintain
records for an excessive amount of time. Privacy considerations
are also relevant to the use and retention of data.

Comments on Preliminary Findings
The information and data retention requirements currently in place create significant administration and costs. We
also acknowledge that the personal nature of information and privacy and confidentiality considerations are well
understood by the industry who invest heavily in secured storage.
Response to consultation questions
Is there a need to reform data retention arrangements? If so, what form might this take?
In the early period of implementation employment services providers were required to return inactive files to
Centrelink one year after the last transaction. In the current settings providers must maintain files with any
information relating to claims for payment of service and outcome fees for seven years after the final transaction.
Given the level of evidentiary requirements which relate to claimable fees an enormous volume of files need to be
maintained post activity. We note reports from providers who have exited employment services through the
procurement process of the immense financial hardship this has caused in some cases.

A major issue for providers is the quantum of hard files that need to be stored. All documents such as Employment
Pathway Plans with a job seekers signature must be kept in paper form. The recommendations from the industry
are that these documents should be able to be retained in electronic form. Alternatively providers should be able to
return the paper form to Centrelink in an appropriate time period after the last transaction.

An additional issue raised by providers in relation to data retention is the period of time which files are subject to
auditing. Providers have noted experiences in the past where they have been asked for evidence about cases from
previous contract periods. Such experiences also lead providers to retain more information than may be necessary.
It should be noted the time and cost of retrieving files from secure storage can be significant. It is recommended
that a reasonable time limit be placed on standard contract compliance auditing.

               National Employment Services Association – Response to the APESAA Discussion Paper                                      43
Attachment 1 - Career Advancement Model

Employers consistently rank recruiting and retaining skilled workers as two of their top human resources priorities.
However the level of employer supported training (structured and informal) is quite low. There are an increasing
number of workers now employed through private recruitment and labour hire firms who are particularly
disadvantaged in the provision of work supported training. Low-skilled workers continue to struggle to find
pathways out of low entry and low security jobs.

Career advancement of low skilled workers or those with particular disadvantage requires a conscious and planned
intervention at a level beyond basic post placement support. Career advancement Programs can offer an organised
and strategic approach to satisfy labour market challenges particularly in the area of skills shortages.

In looking at career advancement models a number of versions can be identified. Career laddering is the popular
term in the United States and refers to progressing job seekers through a set of occupations that are linked together
by common or complementary skills. These linkages provide workers with opportunities to advance, while
providing workforce development to meet employer labour needs.

Within a career advancement strategy job seeker skills are developed using a range of accredited or unaccredited
training, education or on the job training post placement. A career advancement model also encompasses the
continued development of an individual’s hard and soft skills to progress their capacity to achieve sustainable
employment, elevating the level of workforce participation and addressing underemployment or advance in their
position. Such a model could assist in turning the tide in the high level of long term underemployment, particularly
amongst mature and working age men.

Similar models used overseas deliver strategic planned support and assistance which enable career progression.
While such models have adopted different durations, evaluations indicate that for optimal effectiveness
approximately one to two years after placement is required for disadvantaged job seekers. Such a model could
incorporate eligibility based on job seeker profile and/or area of vocational placement which provides a career
pathway to areas of skills shortage.

The Workforce Innovation Network (US Jobs for the Future) found that career laddering models delivered through
intermediaries, added considerable value to the local labour market and all its stakeholders. Career advancement
models may operate in partnership, solely with the job seeker or dual partnerships with business and job seekers.
Using the proposed model providers could develop initiatives under a career advancement model with a single firm,
group of similar firms or across a diversity of business to address workforce challenges and provide pathways for
eligible job seekers. A number of evaluation studies reviewed by Jobs for the Future in the US have noted that
career advancement models can strengthen recruitment into hard to fill positions and improve the attractiveness of

The relationship with employers in career advancement models can also assist in developing human resource
practice and achieve greater workforce retention, income and broaden opportunity for disadvantaged job seekers.

The Private Industry Partnership (PIP) program in United States has demonstrated impressive results. The Citigroup
Partnership under this model found workers achieved better career progression than other workers and than the
control group used to evaluate programme effectiveness. In addition participants earned an average of $5000 per
annum better than they had ever previously obtained.

This partnership predominantly assisted women on public assistance with a high percentage being sole parents.
Salomon Smith Barney reported that organisationally 25% of new recruits left within the first year and their overall
staff turn over rate was approximately 18%. In comparison recruits supported through the PIP program achieved a
94% retention rate for participants at the three year period. (Win – Win Corporate Community Partnerships for
Workforce Development, Jobs for the Future)

           National Employment Services Association – Response to the APESAA Discussion Paper             44
The PIP programme initially focused on partnerships with business offering white collar vacancies and therefore
recruited welfare recipients with reasonable skill levels i.e. capable of obtaining a high school diploma or equivalent.
This successful programme has now been replicated and broadened to less skilled industry sectors such as freight
companies and is indicating similar success with less skilled job seekers.

The PIP programme utilised a framework similar to the New Apprenticeship Access Programme at the entry point
and then continued to work with the employer and employee. The programme achieved its remarkable success by
maintaining a close dual focus on the employer and employee needs and providing the necessary support and
development assistance delivered over 32 weeks. It was noted that resources for post placement support could
have been stronger.

The Boston Skills Council commenced a significant career advancement strategy in 2003 to support its low skilled
job seekers. The initiative is a job-growth plan that moves entry-level workers up the skills ladder, gives employers
the trained staff they need, and offers opportunity for low-income workers to achieve family-supporting wages.
Initially the project framework included a nine month post placement programme. However targeting the “hardest
to serve” job seekers it has found that two year post placement case management support is required to ensure
retention and advancement in the workforce. Both the PIP and Boston projects utilise workplace mentoring and
coaching with job seekers. Support is also provided to supervisors and the progress of the job seeker is monitored
to ensure early intervention.

Whether working in partnership with the job seeker or a dual partnership which includes the employer a career
advancement model focuses on the opportunities and demands within the local labour market. The identified
characteristics of most successful career advancement Programs reviewed in the United States are:

Identify avenues of advancement for workers within local labour markets by matching the skills acquired at one
level of employment or education and training with the skills required by higher levels of employment;

Clarify the skill needs of employers to exert an employer-driven influence on the training efforts of workforce
development systems;

Assist workers to develop and initiate an advancement plan through various linked job roles to progress substantive
and sustainable employment;

Address the workers skill development needs pre and post-employment training by utilizing a range of educational
options, from on-the-job training to contracted training to meet local skill needs and employment opportunities;

Support workers engagement and attachment in the workforce through coaching and mentoring to achieve early
intervention and identification of employment vulnerability, addressing employability skills deficits as they manifest
in a real work context, support employers address issues in other ways than terminating employment, identification
of alternative placements if employment is likely to cease to create a seamless transition to other employment
rather than to welfare.

            National Employment Services Association – Response to the APESAA Discussion Paper               45

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