Australia’s unemployment rate is at its lowest in 50 years. At close to full employment, what is the next battlefield for employment services?

The Federal Government’s recently released Jobs + Skills Summit issues paper thankfully took a moment to acknowledge just how good things are in terms of the macro employment market at this moment in 2022. With all the efforts that go into reducing unemployment – and that employment services providers themselves put in to ensure their caseloads can achieve meaningful workforce opportunity - it was worth celebrating a state of almost full employment.

“Maintaining full employment is a central objective of government,” the Job + Skills Summit issues paper reads. “Full employment allows our economy to achieve its potential and ensures that our economic prosperity and growth is shared more equitably among Australians. The Australian labour market is currently operating at close to full employment, with the unemployment rate at its lowest level in almost 50 years," it says.

However, as the Government pointed out, “while low unemployment underpins greater prosperity it also brings its own challenges and disguises others”. Indeed, full employment brings its own problems. They include businesses having difficulty with widespread and acute skills shortages, with only one unemployed person per job vacancy. However they also include upside opportunities, like taking advantage of jobs growth expected in renewable energy and climate change, digitalisation, the care economy and advanced manufacturing.

The new employment services challenge?

The employment services industry has only just begun to operate under the new Workforce Australia contract. Even so, the issues paper did not hold back from painting a daunting picture of some of the challenges we face, even in a full employment environment. The biggest issue of the day, according to the Jobs + Skills Summit issues paper, is all about making the full use of the diverse skills and talents available to employers in the Australian workforce.

“Diverse teams perform better, and diverse Australian businesses have been found to outperform others financially. For individuals, access to work can be a gateway to financial independence, social connection and personal achievement. To the extent we can address barriers to employment, we can help individuals gain work-relevant skills when they enter the workforce for the first time or after an extended period of under-or unemployment.”

Despite unemployment being historically low, the issues paper says that barriers to employment remain for many Australians wanting work. As employment services providers in Workforce Australia and DES would be well aware, it singles out younger and older people, First Nations people, women, people with a disability, unpaid carers, culturally and linguistically diverse people, and those living in certain regional and remote areas as concerns.

“For example, the unemployment rate of working-age people with a disability remains twice as high as that for people without disability and survey evidence indicates around half of Australian managers and HR professionals have never hired or worked with a person with disability,” the Job + Skills Summit issues paper says.

Breaking down barriers to work

What is the challenge for employment services? The Government was not particularly complementary to the employment services sector. While clearly stating it has a role to play, it was also quick to say that the incentives of the sector are not always aligned to the long-term needs in employment. “Employment Services providers can help, but sometimes focus on the most readily available job rather than on long-term, secure employment opportunities."

The Government suggests dismantling these barriers will require action from all of us. “For employers to benefit from the full diversity of talent available, improvements to foundational education, recruitment and training practices, employment services, policy incentives and community attitudes all need to be explored.” Is asks: “Across the employment services framework, where should effort be targeted? How do we measure progress and get results?"

It seems the challenge continues for employment services providers. In a market of full employment, perhaps the time is now for providers to double down on their employer engagement, and begin to break down the barriers to employment that exist in some of the areas the government has singled out through better communicating job seeker value. For example, the continued disinterest in hiring DES participants is something to work on.

Interested in learning more about how we help Workforce Australia providers activate, support, place and retain job seekers? Learn more here.