Job Network evaluation stage two

The full report

Executive summary

Background

In the 1996-97 Budget, the Federal Government announced a new framework for the delivery of labour market assistance. The new system was introduced on 1 May 1998 and represented a move to a more flexible system of delivering employment assistance. The Government’s four key objectives in reforming employment assistance were to:

  • Deliver a better quality of assistance to unemployed people, leading to better and more sustainable outcomes.
  • Target assistance based on need and capacity to benefit.
  • Address the structural weakness and inefficiencies inherent in previous arrangements for labour market assistance, and to put into effect the lessons learnt from international and Australian experience of labour market assistance.
  • Achieve better value for money.

More than 300 government, community and private organisations were contracted to deliver employment services. Centrelink was established as the gateway to Job Network with responsibility for registering and classifying job seekers for Job Network services. The first contract period for Job Network ended in February 2000, at which time the Government introduced changes to improve services under the second employment services contract (ESC 2) for the period 28 February 2000 to 2 March 2003.

Scope of stage two of the evaluation

The Evaluation Strategy for Job Network, as endorsed by the Government in December 1996, includes three evaluation reports (DEETYA 1998). The first report (which was released in May 2000) covered the first 17 months of Job Network and was aimed primarily at assessing the implementation of Job Network together with early market experiences. The second is a report on progress and covers the operation of Job Network over the whole of the first contract period (May 1998 to end-February 2000) and the early months of the second contract period (generally to September 2000). The third report, on the effectiveness of Job Network in securing sustainable employment for job seekers, was finalised at the end of 2001.

The stage two report focuses on four key areas of interest with respect to the operation of Job Network:

  • The development of Job Network.
  • Access to assistance for different job seeker groups.
  • The performance of Job Network in achieving outcomes for clients.
  • The regional performance of Job Network.

The report should be read in conjunction with Job Network evaluation stage one which included a description of the services available under Job Network and the rationale for the changes to employment services.

Main findings

Stage two of the evaluation found that the overall performance of Job Network is encouraging. Preliminary evidence suggests that Job Network is having a positive impact on the post-assistance employment prospects of those assisted. Job Network is delivering better value for money than the previous labour market assistance arrangements. Specifically:

  • Job Network has made further progress towards a competitive market by expanding the geographic coverage and competitive basis of its services. The number of sites increased by 45% overall, doubling outside capital cities. One hundred and ten sites deliver specialist services, around one-third of them servicing indigenous job seekers. Competition was introduced for the first time for Intensive Assistance tenders, protected by a minimum set price, and explicit bids for specialist services were available to provide greater choice in the provision of Intensive Assistance tailored to particular job seeker groups.
  • Client flows into Job Network services have been significant, with more than one million job seekers referred to Intensive Assistance. Over 670 000 Job Matching placements have been effected over the period of the market examined in the report (May 1998 to September 2000). Participation rates for most job seekers are close to expected, in terms of their share of assistance compared to their share of the Job Network-eligible population, and their participation relative to the rate of participation in Job Network for all job seekers.
  • Post-assistance outcome levels for Job Network services compare well with those of previous labour market programmes. Three months after a Job Matching placement, 73% of job seekers were either employed (70%) or undertaking education and training, while three months after leaving Job Search Training or Intensive Assistance, the outcome rates for job seekers were 47% (38% employed) and 42% (35% employed) respectively. Outcomes for NEIS were 84%, with 81% employed.
  • Preliminary estimates of the contribution that Job Network makes to post-assistance income-support status (its effectiveness) suggest a substantial net impact of about 10 percentage points for Intensive Assistance and a more moderate impact of three percentage points for Job Search Training. These net impact levels are similar to the average net impact levels of those programmes operating in the mid 1990s that were replaced by Job Search Training and Intensive Assistance.
  • Job Network is achieving outcomes and net impact at a substantially lower cost than previous labour market assistance arrangements, thus providing better value for money. Data on efficiency (unit cost and cost-per-outcome) indicate that the cost of assistance under Job Network is well below that of the previous regime and, across all programmes, is less than the unit cost of assistance provided during the 1990s:
    • Job Search Training is delivered at about half the cost-per-job of Job Clubs.
    • The cost-per-job for Intensive Assistance is more than $5000 lower than the average of the programmes which it replaced.

The evaluation, however, identified some areas where Job Network’s operation could be improved. Not all job seekers are benefiting equitably from Job Network assistance and there is considerable variation in employment outcome rates between job seeker groups. Groups with consistently low outcome rates compared to others include older job seekers (aged 55-64), those on unemployment allowances for more than two years, job seekers with less than year 10 education, indigenous job seekers and those with a disability.