20/06/2025
By Andrew Hills FIEP, Chairperson of IEP Australia Board
The privatisation of employment services in Australia began in May 1998 when then-Prime Minister John Howard replaced the Commonwealth Employment Services with Job Network. Over the years, this system has evolved through iterations such as Job Services Australia (2009), jobactive (2015), and most recently Workforce Australia Services (2022). Each successive model has been heralded by the government of the time for improving outcomes and facilitating greater workforce participation.
However, while these privatised systems have demonstrated adaptability and results, they have come at a cost. Government investment in employment services has steadily decreased, while adherence to a “work-first” approach has often overshadowed the importance of sustainable employment outcomes. This concern was highlighted in the 2024 Parliamentary report chaired by Julian Hill, which revealed that successive governments have prioritised fiscal savings over the quality and impact of services.
Challenges in the Employment Services Sector
The history of employment services underscores the immense adaptability of the sector, which has continued to perform amidst shrinking budgetary support. However, reduced funding has led to several critical challenges, including:
- Erosion of Professional Standards
- With fewer resources, investment in staff training and professional development has diminished, undermining the professionalisation of the workforce.
- Short-term contracts (typically 3-5 years) contribute to job insecurity and high staff turnover, making it difficult to retain skilled professionals.
- Lower funding often correlates with reduced wages, further discouraging the long-term retention of talent within the sector.
- Inefficient Contracting Processes
- The current full-tender process for employment services creates uncertainty for providers, hindering their ability to innovate and focus on participant outcomes.
- A lack of guaranteed ongoing business ties providers to cyclical performance reviews, limiting their stability and growth.
- Administrative Overload
- Excessive administrative tasks create inefficiencies and detract from the essential goal of achieving the best outcomes for participants.
A Vision for Professionalisation and Sustainability
To overcome these challenges and ensure that employment services remain adaptable, professional, and impactful, the following changes need to be considered:
- Revise the Funding Model
- Introduce funding mechanisms that support competitive and fair remuneration, enabling the sector to attract and retain skilled professionals.
- Allocate resources specifically for ongoing training and professional development to elevate the expertise of the workforce.
- Streamline Tendering Processes
- Move away from a full-tender process to a performance-based model, ensuring that only a portion of the market is tendered at any given time.
- Protect reliable providers by guaranteeing business continuity for organisations maintaining strong performance metrics.
- Foster Collaboration and Innovation
- Unite providers around shared goals to drive better outcomes for participants.
- Provide funding and flexibility for providers to innovate, share best practices, and create participant-centred solutions.
- Reduce Administrative Burden
- Shift the focus from burdensome reporting requirements to genuine partnerships between providers and government.
- Collaboratively develop and implement solutions directly targeting participant needs.
A Call for Collaboration
None of these changes will come easily, and real, impactful reform requires a united effort. It’s vital to emphasise that this is not about increasing provider profitability; it’s about ensuring the professionalisation and long-term sustainability of the employment services sector.
The sector has consistently demonstrated its willingness to collaborate with the government to achieve solutions that prioritise participants’ best interests. With appropriate investments and structural reforms, we can enhance the quality, integrity, and outcomes of employment services while building a stronger foundation for the future.
Now is the time for action, guided by a shared commitment to reforms that benefit participants, providers, and the wider community. This is the opportunity to reimagine the sector—not just for today but for generations to come.
