Client:

Department of Prime Minister and Cabinet

Location:

Australia

Methodology review helps to set fair and consistent regional employment targets for community development providers.

The National Indigenous Australians Agency (NIAA) assesses community development providers against their regional employment targets every six months. A provider achieves an employment outcome when a job seeker remains in employment for 26 weeks. Each community development program region has a different employment target.

In 2017 and 2018, we worked with the Department of Prime Minister and Cabinet (which was then responsible for assessing community development program providers) to develop a methodology to determine fair and consistent regional employment targets across each program.

First model (2017)

We developed the first model based on the estimated supply and demand for labour in each region. Contextual factors which influence remote and very remote labour markets also informed the model’s development, such as the unique characteristics of Indigenous employment. These characteristics include:

  • the impact of cultural requirements
  • high rates of health conditions and disability
  • historic discrimination
  • the propensity for Indigenous people to work locally rather than moving away.

Other factors that informed the development of the first model included general regional barriers to employment, such as:

  • limited employment and education opportunities
  • geographic, telecommunications and transport barriers.

We tested the model against employment outcomes in previous performance periods to ensure it produced challenging yet reasonable targets. In order to mitigate any risks associated with this approach, we proposed checking the targets with community development providers and adjusting them if necessary.

Second model (2018)

In 2018, we again worked with the Department of Prime Minister and Cabinet to review our model. We incorporated past performance against previous regional employment targets, and we included an aspirational element into the new targets. The main differences between the first and second model were:

  • rather than supply and demand, the main variables in the second model were previous RETs and the number of employment outcomes they achieved (past performance), as well as employment growth in each region
  • the updated model contained ‘stretch targets’ to challenge high-performing providers. These targets were balanced by ‘maximum RETs’ to ensure that they were also fair and realistic.

We considered performance outcomes from at least two previous performance periods in order to reduce the risk of one-off events disproportionately influencing the regional employment targets (for example, boosts or reductions in employment caused by floods or construction projects, as well as seasonal work patterns).

The Department’s response

The Department of Prime Minister and Cabinet adopted most of our principles, only adjusting the model to reduce any instances of excessively high or low regional employment targets. The National Indigenous Australians Agency retained the responsibility for setting the targets, giving providers the opportunity to request a review.

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