If you've read about the Payment By Outcomes Trial for social enterprise and would like to better understand its significance, White Box COO Mark Daniels breaks it down for us with this brilliant explainer.
When you run a jobs-focused social enterprise you are not in it to make money. Yes, you need to make a profit to keep the business going, but it’s not your primary focus. Your fundamental goal is to create jobs for people who face barriers to accessing work, by creating a workplace where they can develop, grow and thrive.
When you choose to do this, and if you operate in markets alongside profit-motivated business, you inevitably face higher costs, because the people you’re assisting into employment need extra support. These supports come in various forms and could include additional staff (counsellors, trainers, translators, technical and subject matter experts, case workers, career pathways coordinators), increased rostering flexibility, modified work environments and additional support programs.
These extra costs are critical to the success of the job-seeker and represent a fraction of the money that government saves/earns by people moving off long-term welfare and into tax paying employment, not to mention all of the associated health and happiness benefits for the individual and their friends/family.
Interestingly, federally contracted Workforce Australia (WA) and Disability Employment Service (DES) providers get paid when jobseekers register with them, when they do training courses and when they start working. The more complex the persons needs and circumstances, the higher the payment. They are often unsuccessful in creating employment for these cohorts because they’re job readiness training is not tailored and they often place job-seekers in ‘hard-to-fill’ jobs which they don’t stay with, leading to a self-fulfilling downward unemployment spiral.
It is an eternal bug-bear for those of us championing social enterprise that DES and WA providers get paid handsomely when social enterprises do the heavy lifting in providing employment and support to their customers/participants. At present, the social enterprise receives none of the recognition or funding for support, despite taking on all the ongoing costs of work-readiness and success. Up until now social enterprises, who are arguably the employers most committed to the most marginalised individuals, have received no direct government support for job outcomes.
White Box Enterprises has been working in partnership with the Federal Department of Social Services on a pilot known as the Payment By Outcomes (PBO) Trial, that pays jobs-focused social enterprises for employing and retaining DES eligible jobseekers with similar payment triggers to those received by DES and Workforce Australia providers.
The Trial is getting incredible retention outcomes that exceed those being achieved through DES and Workforce Australia, which is no surprise given social enterprises have been tailor-built to provide employment and support for these individuals.
Since the Trial commenced in July 2022, 75 people living with a disability, who had previously been out of work for at least nine months during the past year, are now employed and earning a full award wage at one of 15 participating social enterprises. Despite the challenges that present when entering work after lengthy breaks, employment retention is above 90 per cent.
This is the most exciting policy innovation in the social enterprise space since the introduction of the Social Procurement Framework in Victoria in 2018. It has the potential to radically change the employment experience for long-term unemployed jobseekers.
It also increases the financial sustainability of jobs-focused social enterprises. In-turn this will lead to jobs-focused social enterprises being more sustainable and sound investments for the founders, for impact organisations and for investors, which will accelerate their growth and social impact. In the way that hundreds of millions of dollars are being spent with social enterprises annually as a result of social procurement policies, payments to social enterprises for employment outcomes will have a transformational impact on the social enterprise movement.
Our next step is to expand the Trial and reach more people in need of a break from the cycle of unemployment. The step after that is to update the employment system, so that someone can walk into a Centrelink office and be offered work in a jobs-focused social enterprise in their community. This means social enterprise sits alongside DES and Workforce Australia as a choice for disadvantaged jobseekers. It sounds simple, we know it’s not. But today it feels like we’re a lot closer than we’ve been before.