Employment services providers face a changing landscape due to evolving government policies, technological advancements, and shifting economic conditions. Our Founder and Director, Paul Diviny, has the inside scoop on the trends and challenges shaping the sector.

Through his annual interviews with leading CEOs and executives, Paul has identified some common themes and six opportunities that will set up employment service providers for success in 2023.

1. Change is constant

Providers reflected on the enormous changes in the sector, especially the transition to new Workforce Australia contracts. One CEO commented: “I can tell you, we’ve never worked so hard as we’ve worked in the past three years”. And with the impacts of the COVID-19 pandemic still being felt, many providers are adjusting to the market, while others have taken on new regions.

During this transition period, employment services providers have had to remain adaptable and responsive to changes to ensure they can effectively support job seekers and employers while maintaining their businesses’ financial viability.

While the past six months have been difficult, one provider commented that the department had been extremely supportive. Most importantly, there’s been lessons learned in building teams quickly and exiting regions with respect.

Opportunity: Good leadership is essential to navigating change. Our interviewees said that creating stability was a challenge, but it was critical to ensuring that their people could do their best work. Our tips? Check-in with the team often, equip local leaders to embrace change, recognise progress and share a vision for the future.

2. Staff retention strategies

Staff turnover is a common issue in the employment services sector. The main reasons for high staff turnover are the competitive job market and increasing salaries. Unfortunately, staff shortages are most acutely felt when there is a shortage of workers, such as in regional and remote regions. One CEO said that a job in employment services could be challenging and demanding, and some employees decide that ‘it’s just not for me’.

We know that the consequences of high staff turnover can be significant and expensive, as recruitment and onboarding take time. In addition, it impacts staff morale, and sometimes we see unmanageable caseloads leading to low job satisfaction. It’s a self-perpetuating cycle.

Opportunity: Our interviewees highlighted the importance of prioritising staff retention strategies to minimise turnover and ensure consistent service delivery. By investing in employee development, offering flexible work arrangements, and providing employee benefits, providers can create a stable and supportive workplace that benefits all stakeholders. Our tips? Selectively use professional development to lure new recruits and retain those at risk.

3. Sector advocacy

Employment has been a major priority for the Albanese Government since it came to power in May 2022. The House Select Committee for Workforce Australia Employment Services is top of mind for many providers seeking to ensure their voices are heard as part of this extensive review. At this stage, there are more questions than answers, with some concerns that a government agency service provider (like the former CES) could enter the market.

But there’s also optimism and support for the ‘sensible approach’ to developing the potential new model for the Disability Employment Service (DES). Providers are keen to increase their impact and welcome opportunities for people with disabilities to lead and design this program.

Opportunity: Employment services providers are mobilising to advocate for the sector, providing useful feedback to the Government with the aim to create a thriving and inclusive job market for everyone. If you’re not already undertaking advocacy, a simple way to start is to invite your local MP for a site visit. Our tips? Ensure you have an evidence-based approach to advocate for what’s working and could be done differently.

4. Labour shortages

Australia’s labour shortages are predicted to continue, with employment service providers not expecting a significant shift in available workers this year.

However, it’s pleasing to see more migrants and international students fill job vacancies after the impacts of COVID-19. Many job seekers are feeling the pinch of rising rents and inflation. Every employment service provider we spoke to said that job seekers were struggling with the cost of living and that secure housing was often a key barrier to employment.

“The housing market issues will become a real problem this year, even just housing availability for migrants coming in. It has the potential to slow the numbers of people coming to Australia,” said one CEO.

While some providers expected a small caseload growth, others commented that job seeker modelling was incorrect and had impacted their bottom line.

Opportunity: Providers are gearing up for growth, while at the same time undertaking frequent reviews of financial modelling and resources. Many are looking to diversify their revenue streams. In addition, they are considering opportunities to support job seekers with additional barriers to employment such as housing. Our tips? Ensure your strategic plans are at least considering revenue diversification as a long term goal – it’s good risk mitigation for an uncertain future.

5. Technology and risk compliance

Technology was a key theme across providers with substantial investments in systems to improve risk compliance and service outcomes. One provider spoke about the benefits of using technology to reach remote areas, even post-COVID, making their business more efficient.

Providers were still assessing the effectiveness of the Workforce Australia digital platform. They agreed that it works for some people while others need face-to-face support. Pleasingly, providers noted that the PBAS offered some flexibility to job seekers. However, it could be improved further by broadening it to all jobseeker’s activities to prepare for employment.

Opportunity: While we’re seeing the sector make significant progress with its technology capabilities, much work still needs to be done. The power of technology to support employment service providers to make informed decisions about their operations, service delivery, and performance is not yet fully realised. Providers can improve accreditation, compliance, and quality by investing in data analytics tools and capabilities. Our tips? Benchmark your business intelligence capability against best practice and ask yourself if your front line teams are being adequately catered for.

6. Innovation

With the year off to a fast start, most providers are embedding their business-as-usual activities. What’s interesting to see is that some of the more innovative providers are starting to think about how they can create outstanding outcomes for job seekers and employers alike. Some ideas included new ways to incentivise employers to work with long-term unemployed, providing more intensive one-on-one workplace support, thinking critically about problems and resolving them faster than ever, and developing a more localised approach to employer engagement. We love this thinking!

Opportunity: Employment service providers must embrace a culture of continuous improvement to stay ahead of the curve. This means being open to feedback, learning from mistakes, and constantly looking for ways to improve their services and operations. Providers committed to continuous improvement and innovation will be well-positioned to succeed in a rapidly evolving market. Our tips? Think broadly about innovation and look to other service industries for ideas.

While employment service providers face many changes and challenges, these six opportunities can set you up for success in 2023. It’s a golden opportunity to embrace change and be at the forefront of shaping the future of employment services. It’s time to take action.

We’re passionate about helping employment services providers to improve their quality and achieve great outcomes for job seekers and employers. Contact our team for strategic advice and planning to maximise your leadership capability, sector advocacy, revenue diversification, business intelligence, innovation, and more!