How social enterprises are outperforming our broken employment services system

This post by Kylie Flament, CEO of Social Enterprise Council of NSW & ACT (SECNA), highlights the value of work-integrated social enterprises (WISEs) in providing genuine support for people with barriers to employment.

A few years ago, I was running a social enterprise called Green Connect. We employed young people and refugees to do environmental work across five different businesses from organic farming to waste management to ethical labour hire. We trained, supported and employed up to 120 vulnerable people at any given time.

It was hard work. Our staff had multiple barriers to employment, from language barriers to mental or physical health concerns, disability, lack of access to or ability to drive a car, and so much more. They had complex home lives, from violence to caring responsibilities to homelessness. Without Green Connect they might not otherwise have had a job.

But it was good work. These were good people. They wanted to work, wanted to contribute, wanted to earn money to pay for the things they and their families needed. And we helped them to get there, with training and work experience for three mornings at our permaculture farm and then straight into paid work at full award wages in our four highly supported businesses, and then a stepping stone into our ethical labour hire arm. From there, most stepped into mainstream employment.

In the years that I ran this social enterprise, it struck me that we were doing what was needed by doing what worked for each person, and we were getting results. The journeys were rarely linear, with people dropping away to deal with personal matters, or taking a backwards step when something was too challenging, but the progress and the outcomes were real. And we were doing it on the smell of an oily rag. 80% of our expenses were covered by our income from trade from the five businesses we ran, but we were forever scrambling to find grants and donations to cover the remaining 20%.

At the same time, almost all our staff were in the JobActive system (which later became the Workforce Australia system). Given their multiple and complex barriers to employment, most of them were on the highest tier of support. They were required to meet with their employment services provider on a regular basis, required to show that they were applying for jobs, and required to do training courses their Workforce Australia provider chose for them. For any business willing to employ them for 20 hours per week for 6 months, there was a $10,000 wage subsidy available.

Some of our refugee staff reported being forced to do a barista training course three times. It wasn’t something they wanted to do, and it didn’t get them any closer to getting a job, but the Workforce Australia provider insisted on it. When we did some digging, we discovered that the provider would get paid for that ‘outcome’ so were incentivised to keep sending jobseekers to such training despite the lack of alignment with their skills, interests or job prospects.

Some of our young people reported having their welfare payments (already below the poverty line) cut because they missed an appointment with their case worker. On more than one occasion, we intervened to ask that the sanctions be lifted because our staff member had missed their appointment because they were working (surely the whole point of employment services).

The $10,000 wage subsidies interested us. We knew we were offering all of the wrap-around support needed to help our staff to get and keep a job, and we were struggling to cover the cost of it. Surely those wage subsidies were intended for exactly the kind of work we were doing? Unfortunately, none of our staff were ready to work 20 hours per week, and once they started working for us, if we didn’t achieve that level of employment immediately, we were ineligible to apply for a wage subsidy. We had three choices: (a) keep our staff in unpaid work experience until they were ready for that level of employment, (b) push them into 20 hours per week of work, or (c) forego wage subsidies.

The first option didn’t sit well with our values. The second option didn’t work for the cohorts we existed to support and employ. So we were left without access to any of the Workforce Australia funding.

After almost five years leading Green Connect, I left to pursue new opportunities. I am now the CEO of Social Enterprise Council of NSW & ACT (SECNA), where I champion, connect and advocate for the 4,000+ social enterprises across our state and territory. Many of these are Work Integration Social Enterprises (WISEs), employing people who would otherwise be shut out of the workforce, just like Green Connect did.

WISEs consistently offer training and wraparound support to vulnerable groups because a job is more than a job: it is confidence and purpose; it is social connection; it is financial independence; and it is the greatest indicator of future employment. Your ability to get a job is highly dependent on whether you’ve had a job. WISEs offer jobs to people that other companies wouldn’t, and lift their skills, abilities and confidence until that changes.

Almost every WISE I visit is in the same boat though. They are doing all of this incredible work without any of the financial support that the failing employment services system receives.

I don’t use the term ‘failing’ lightly, or without backing. The first parliamentary inquiry into the system released its final report in February 2019, entitled ‘Jobactive: failing those it is intended to serve. The second parliamentary inquiry into the system released its final report in November 2023 and noted ‘The significant and numerous issues identified in this inquiry simply cannot be addressed by mere tweaks to policies and programs. They demand wholesale, large-scale reform in the coming months and years to fundamentally rebuild the Australian system.’

Since then, we have seen very little change. Meanwhile, social enterprises continue to cobble together funds where they can to support people into work, but it is getting harder and harder to do so in the current economy.

Where there has been funding available for employment support within WISEs, the results have been phenomenal. In the recent payment-by-outcomes trial funded by the Department of Social Services, working with White Box Enterprises and 17 WISEs, 82% of jobseekers within the WISEs maintained employment after 6 months, compared to 26% of jobseekers in the disability employment services pool and to just 11% of people supported by Workforce Australia.

Some of the results of this trial and other research shows that it actually costs more than $10,000 to support someone with multiple and complex barriers to employment into long-term work. But the return on investment is there. It is time we provided adequate funding for what we know works: putting patient and kind supports in place to give people who want to work and can work the skills, experience and confidence to maintain long-term employment.

There are many options for recognising the value of WISEs. It could be direct funding of WISEs; it could be by redirecting funds that Workforce Australia agencies are getting to the WISEs; it could be by redesigning wage subsidies to acknowledge that the pathway into long-term employment is neither linear nor likely to start at 20 hours per week for 6 months; or it could be by ensuring that the on-the-job training WISEs provide is recognised as training and therefore eligible for funding through the existing system.

What we can’t afford to do is keep pouring billions of dollars into an employment services system that is broken and breaking people, while leaving WISEs that have 8 times better outcomes to scramble for philanthropic or pilot program funding.

Moderator: Ruth Pitt