As we step into 2024, it’s a time of reflection on the past year’s accomplishments and anticipation for what lies ahead. Each year, our Founder and Director, Paul Diviny interviews four of Australia’s leaders in employment services to provide a set of valuable insights for the year ahead. This article highlights Paul’s reflections on those conversations including the challenges and opportunities that await us in the evolving landscape of Workforce Australia and Disability Employment Services (DES). 

Reflections on 2023: Steadying the Ship Amidst Uncertainty 

Looking back at 2023, our employment services sector leaders highlight the industry’s ability to maintain composure amidst turbulence and uncertainty in policy. Despite the deluge of reports and recommendations from various government reviews, employment services providers persisted, focusing on core operations and adapting to the changing environment.  

One CEO commended the sector for being united in its approach to policy reviews: “the sector banded together and worked closely with the government on reforms”. In contrast, another CEO was concerned about the lack of collaboration among providers, saying they’ve noticed a loss of industry cooperation, and providers are “holding their cards very close”. 

A key achievement was the sector’s contribution to maintaining high employment levels, responding well to challenges posed by a tight labour market. One CEO said “We should be proud that we’re achieving KPIs” as well as being particularly proud of efforts to place people with disability in employment. 

Surprises and Challenges: Contract Changes and Long-Term Barriers  

However, unexpected challenges affected many providers during the year. One significant challenge was the impact of sudden decisions, such as mid-contract changes to Parents Next. These decisions affect participants, financials, and operations. Another surprise for the sector was the Government’s handling of the DES star rating error. One provider was quite taken aback by the negative views expressed by certain commentators. 

In addition, one CEO said they were surprised at the sheer proportion of people with long-term barriers, particularly people with disability who were part of the online Workforce Australia caseload. These individuals need a high level of support and instead they’ve been languishing on the online system. It highlights the need for proactive measures to address systemic issues and ensure inclusive participation in the workforce. 

Crystal Balling 2024: Anticipating Government Changes  

Looking ahead to 2024, our leaders express differing views on the pace of changes expected in the sector. Some expect gradual rather than immediate changes in government policies, given the extensive volume of recommendations from various inquiries and reviews. While  adjustments may occur, fundamental changes requiring legislative action will likely take time to materialise.  

Other leaders expect a push for reform in the next six months: “There’s about 18 months to get quick wins on the board for Workforce Australia”. Leaders hope to see more clarity on the role of employment services between the NDIS and DES.  

“We’re going to be rushing up to an election again, with tenders,” says one CEO. There is a fear that the design of DES is probably not as advanced as it should be and if they rush, it may end up not working properly.  

Economic Projections: Navigating Stagflation and Labour Market Dynamics 

On the economic front, our leaders predict a soft landing amid inflationary pressures and geopolitical uncertainties. However, a modest increase in the unemployment rate is expected due to changing immigration policies and economic factors.  Indeed, the latest January unemployment rate has jumped to 4.1%, highlighting the predicted soft landing is now occurring. 

Skills and labour shortages will persist in certain sectors, necessitating tailored solutions and industry collaboration to address workforce needs effectively. One provider has experienced increased job seeker referrals, suggesting employers are letting people go. Another agreed that they are starting to see redundancies across a number of industries.  

Our CEOs commented that many more people are looking for part-time work following the impacts of COVID-19. Unfortunately, employers are still looking for full-time workers, so providers need to engage better with employers to carve jobs and think about roles differently. 

Unemployment for people with disability is staying stubbornly high – our leaders agree there’s still a lot of work to do in changing attitudes. However, if the market stays tight, the more likely historic stigmas are to break down.   Conversely, should unemployment rates continue rising, there is a risk that disadvantaged participants will miss out on sustainable employment opportunities. 

One CEO was frustrated about the high numbers of people on NDIS with employment goals but low rates of participation with DES providers. 

Customer Centric: Putting Customers at the Heart of Services 

Interestingly, one leader commented that participants are starting to move between providers. This highlights the need for a more customer centric approach. It’s a significant change for providers who need to adopt new ways of engaging with participants, ensuring their voices are heard, meeting their expectations, and measuring their service satisfaction.  

Embracing Innovation: Integrating Technology and Driving Efficiency 

Our sector leaders emphasised the importance of embracing technology and innovation to enhance service delivery and stay competitive. While acknowledging the potential of AI and new technologies, there is a need for a balanced approach that integrates technology with human expertise. Government will continue to focus on data security and protecting systems from cyber-attacks. One CEO mentioned they were implementing new policies regarding their employee’s use of AI tools, amid concerns regarding privacy and intellectual property risks. 

Future of the Sector: Localised Solutions and Strategic Partnerships 

Looking ahead, one CEO said there is a shift towards more localised, community-led solutions tailored to specific industry sectors and regional needs. This entails building strong relationships with employers and communities to foster collaboration and drive sustainable change. While new entrants may emerge, the sector’s resilience and capacity for innovation are expected to remain strong. 

Another CEO forecasts consolidation for the sector: “There is no space for small providers”. With margins tightening and uncertainty prevailing, some providers are driven by the need for scale to effectively navigate compliance and technological advancements. Providers also want to reduce reliance on single source government funding to enhance future sustainability.  

Transformational Leadership: A New Way of Leading 

One leader said that the “moving of goal posts was causing fatigue”. These progressive leaders weren’t afraid to share their vulnerabilities: “There’s a lot to running these businesses and they are becoming more complex.” Great leaders are looking to measure social impact, reduce environmental footprint, focus on good governance and sound fiscal management. Staff turnover continues to be a significant issue in the sector. It has a cost impact but also contributes to instability. One CEO commented: “The more we can learn from each other on these challenges … it would be very valuable.” 

Conclusion: Embracing Change and Collaboration 

As we embark on the journey into 2024, our “CEO Outlook” highlights the importance of adaptability, innovation, and collaboration in navigating a complex and evolving landscape. By embracing change, leveraging technology, and fostering strategic partnerships, providers can seize opportunities, address challenges, and drive positive outcomes in the year ahead. We thank these leaders for participating in our interviews and contributing to a more effective sector.  

Prospert knows that the path forward may be uncertain, but with resilience and foresight, we can chart a course towards a brighter future, transforming lives, businesses and communities one sustainable job at a time. Contact us to discuss these insights further.