Procurement Australia News

Social Enterprises Excel in Payments-by-Outcome Trial: Job Creation and Retention Experts

Written by Joel Mence | Mar 7, 2024 5:26:23 AM

Early data is showing that social enterprise is playing a significant role in addressing employment challenges, particularly for individuals facing barriers such as First nations people, those with disabilities, newly arrived Australians, or individuals with a criminal history.  

As it stands, Australia spends approximately $3 billion annually to assist people in returning to work. However, the success rate for those who have been unemployed for nine months or more to return to work is less than 30%.  

White Box Enterprises, a social enterprise incubator, under the leadership of CEO Luke Terry, has demonstrated a track record of supporting start-ups that contribute to breaking down employment barriers. Terry tells us, “Social enterprises, with success rates exceeding 80%, demonstrate financial resilience and a targeted focus on creating employment for those in utmost need." 

Alongside the federal government’s efforts through Workforce Australia and Disability Employment Services, there’s space for a number of initiatives to provide meaningful work and career pathways for many individuals. Luke Terry says, “We’re not suggesting social enterprise replace DES or Workforce Australia. We see social enterprise sitting alongside these, as an alternative for people who need that extra level of support that open employment doesn’t provide.” 

White Box received a substantial $5 million in funding pumped into the enterprise by the Paul Ramsay Foundation. With these funds, White Box’s successfully launched Australia’s inaugural Payment By Outcomes trail for jobs-focused social enterprises in collaboration with the Department of Social Services, where social enterprises are receiving direct payments from the government for the job outcomes they create. 

The data collected from the Payment By Outcomes scheme reveals individuals earn more and stay employed longer in a social enterprise. People living with a disability are twice as likely to stay in their job and earn 28% more when employed by a jobs-focused social enterprise, compared to a job placement through Disability Employment Services (DES). 

With the data showing great outcomes, it highlights the importance of supporting these ventures. When charitable donations flow into incubators and then into social enterprises which create jobs, it ultimately means more money in the pockets of hard working Australians.  

By increasing resources to social enterprises, they can invest more in buying goods and services locally. Procurement Australia serves as a gateway for social enterprises to tap into negotiated supplier arrangements and preferential pricing. With a wealth of not-for-profit members, Procurement Australia facilitates impactful spending decisions, allowing social enterprises to stretch their resources further and maximise their impact.  

Source: https://www.philanthropy.org.au/news-and-stories/white-box-enterprises-social-enterprises-are-key-to-success-for-people-facing-job-challenges/