Wednesday, 24 February 2016

Indigenous Parity Initiative: through a glass darkly


The Indigenous employment challenge facing Australia is daunting. Indigenous Affairs Minister Nigel Scullion outlined the magnitude in comments to a CEDA sponsored Aboriginal Employment Summit in South Australia in April 2015:

“Governments have committed to halving the gap in employment outcomes between Indigenous and non-Indigenous Australians by 2018,” Federal Minister for Indigenous Affairs Senator the Hon. Nigel Scullion told a CEDA forum in South Australia (SA).

“We need to get another 188,000 Indigenous Australians into jobs to reach parity with non-Indigenous Australians by 2018,” he said.

“That’s 62,000 a year.”

Mr Scullion said the Commonwealth public sector will increase its own Indigenous workforce to three per cent by 2018.

“That’s around 7500 people,” he said.

Mr Scullion said that through the newly formed Employment Parity Initiative, Australia’s biggest employers will also increase their average Indigenous employment rate to at least three per cent of their workforces by 2020.

“That’s an additional 20,000 Indigenous Australians in work,” he said.

Minister Scullion announced this week the latest milestone in the journey outlined above, the finalisation of an Indigenous Employment Parity agreement with MSS Security, a major supplier of security services to both the private and public sector in Australia with operations in all states and in metropolitan, regional and remote locations.

The agreement provides that MMS will increase its Indigenous employees by 350 over the next three years from 124 staff to 474. As MSS has over 5000 staff Australia wide, this amounts to an increase from 2.3 percent to 6.5 percent of MSS’s workforce.

The PMC website provides a succinct outline of the Indigenous Parity Initiative launched in March 2015. Key extracts describing the program are set out below:

The Employment Parity Initiative aims to increase the number of large Australian companies with a workforce reflective of the size of the working age Indigenous population – expected to reach 3% by 2018. Specifically, the programme aims to get 20,000 more Indigenous job seekers into jobs by 2020.

 

Large national employers will be invited by the Prime Minister to become parity employers by increasing the level of Indigenous employees within their organisation.


The Department of the Prime Minister and Cabinet will administer the Employment Parity Initiative and offer tailored contracts to parity employers with payments linked directly to outcomes. This recognises the additional costs of employing and supporting disadvantaged job seekers. To reduce business red-tape, there will be minimal reporting required.

 

Parity employers are only paid an outcome fee when an eligible employee hired under the programme achieves a minimum term of employment with the organisation. Reporting burden and administration is also minimised through simple, quarterly reports.

 

The Employment Parity Initiative does not reward commitments but real, long-term outcomes. Employers will only receive an outcome fee when an eligible employee hired under the programme achieves a minimum term of employment with the organisation. This approach generates a strong incentive for parity employers to meet contractual obligations.

 

The Forrest Review identified that there are untapped opportunities to leverage the goodwill and capacity of large companies to employ large numbers of Indigenous people. The Review received feedback from business that they would employ more Indigenous workers if they had access to more flexible contracts tailored to their individual circumstances.

 

 

To date, the Government has put in place Parity Agreements with a number of major companies. The PMC website lists agreements with only three companies, Accor, ISS, and Compass. A google search suggests that Parity Agreements may also have been signed with Spotless and Crown Resorts.  And now we have the MSS announcement.

 

The National Congress of Australia’s First Peoples has been critical of the lack of clarity around the scheme. In a post-budget media release in May 2015, Congress noted:

 

Under the initiative, financial assistance will be given to ‘top 200’ companies for temporary job placements of Aboriginal and Torres Strait Islander people for 26 weeks.  The employer apparently receives the bulk amount of funding at the end of the placement period.  Ms Parker and Mr Malezer said it was unclear how many ‘real jobs’ or permanent jobs would be created under the scheme.

“On the face of it, it appears that millions of dollars will be paid to large employers with little or no accountability for outcomes,” they said.

 

So what are we to make of all this?

 

Clearly, the aspiration is a worthy one. The Minister and the Government are to be congratulated for setting out on this journey.

 

If the structural under-representation of Indigenous citizens in employment is to be remedied, then clearly the private sector will need to be centrally involved. To their credit, a significant number of our largest corporations are indicating an awareness of the issues we face in driving towards employment parity, and even more importantly, are prepared to step up and be part of the solution.

 

Nevertheless, this is a hugely challenging area, where many un-employed or under-employed Indigenous citizens face a diverse range of deep-seated barriers to transitioning onto what might be termed an ‘employment trajectory’. Sustained success is an extremely challenging benchmark, and will inevitably require supra–normal support for new employees to achieve. Such support will affect the bottom line of the corporations involved (albeit marginally given the size of their operations), and while the Commonwealth appears to be ready to provide financial assistance to business corporations, this support is time limited.

 

Sustained success will require deeper cultural change within business, and government, and this will be best achieved through greater transparency of the numbers of new employees recruited under the Initiative, the sources of those employees (ie are they formerly unemployed or employed), retention rates, and the cost of the financial support being provided by Government.

 

So while the progress over the past year appears to be positive, the lack of comprehensive, up-to-date and detailed published data from Government (even at an aggregate level) leaves open the possibility that this is merely a fa├žade, aimed merely at persuading the electorate and the Indigenous community that positive change is occurring. More importantly, a huge benefit of greater transparency would be that it would assist in driving the cultural change required within the business and public sectors.

 

At a time when the Government is pushing hard to utilise private sector models across the public sector, when business is the recipient of public sector funding part of the deal should be that they sign up for the sort of rigorous analysis of performance which they apply within their own businesses. And government should commit to cooperatively monitoring the sustained impacts of today’s government investments through the collection and publication of retention rates for the new employees recruited under the Parity Initiative in the period beyond the funding support.

 

This post reflects a few hours research, and allows an interested bystander to get a reasonable appreciation of what the Government is attempting to do in this particular area. Yet that research failed to throw up a definitive list of the corporations involved, the funds allocated to the Indigenous Parity Initiative overall, and the funds spent since its initiation, the progress made to date in terms of new recruits, whether or not retention is an issue, the gender breakdown of the new recruits, and whether the corporations are recruiting from the ranks of the unemployed or the previously employed.

 

It is the case that Indigenous Affairs is challenging, or to use a term that I don’t particularly like, involves ‘wicked problems’. Policy failures abound. However, there is much that might be done to drive better policy outcomes, and better community understanding of the challenges faced by the nation as a whole in this area.

 

Moreover, Indigenous citizens will benefit if they are able to see more clearly what is being attempted and how it is progressing. Transparency is a public good! The Indigenous Parity Initiative, given its centrality to the Government’s policy agenda, would be a good placed to start.