Workforce Australia Fails to Meet Key Employment Target for Second Consecutive Year
The Department of Employment and Workplace Relations (DEWR) has taken decisive action against underperforming employment service providers, cancelling ten licences and placing another seventeen on strict performance improvement plans. This shake-up follows the release of the department's 2024-25 annual report, which revealed that the cost of placing a single jobseeker into sustained employment has exceeded government benchmarks.
Licence Terminations and Performance Review
DEWR conducted a comprehensive review of all 176 Workforce Australia Services licences, resulting in the termination of ten licences effective 30 June 2025. A departmental spokesperson confirmed that these ten terminated licences were held by seven providers operating across nine employment regions. Major providers affected include Max Solutions, AMES Australia, and Job Statewide Employment Solutions, with the latter losing three separate licences.
Participants in regions where licences were cancelled have been transferred to existing or new providers to ensure continuity of support. The remaining seventeen providers placed on conditional performance improvement plans face increased scrutiny and must demonstrate measurable improvements to retain their operating authority.
Declining Performance Metrics Despite Low Unemployment
Performance data reveals concerning trends for the Workforce Australia program. Despite a national unemployment rate of just 4.3 per cent, the program achieved a 26-week employment outcome for only 11.7 per cent of participants during the 2024-25 financial year. This represents a decline from the 13.2 per cent achieved the previous year and falls significantly short of the government's 15 per cent target.
A 26-week employment outcome is defined as a participant occupying a job placement long enough to either move completely off income support or reduce their reliance on it by an average of 60 per cent. The declining success rate suggests systemic challenges in transitioning jobseekers into sustainable employment.
Rising Costs and Financial Implications
Compounding the performance issues is a notable increase in program costs. The "investment per employment outcome" has climbed to $3,575, exceeding the government's $3,500 efficiency benchmark. DEWR attributes these rising costs to changing market conditions, noting that while general unemployment remains low, the proportion of Workforce Australia participants facing complex disadvantages has increased.
These disadvantaged cohorts include individuals experiencing homelessness, refugees, and First Nations Australians. The department spokesperson explained that "it became more costly for providers to find jobs for participants" from these backgrounds, though providers receive bonus payments when they successfully place disadvantaged jobseekers into sustained employment.
Lucrative Contracts and Market Concentration
Despite the licence cancellations, the employment services sector remains highly lucrative for top-performing providers. An analysis of AusTender data shows that DEWR has awarded more than $2 billion in employment services contracts since 2022-23, with approximately $1.9 billion (over 95 per cent) related specifically to Workforce Australia programs.
Serendipity emerged as the biggest beneficiary, securing employment services contracts worth more than $622 million. AtWork Australia followed with approximately $413 million in contracts, while Max Solutions, despite losing one licence, maintained contracts exceeding $255 million. Together, these three providers represent 54 per cent of all workforce-related employment services contracts.
Union Criticism and Calls for Systemic Reform
The Community and Public Sector Union (CPSU) has strongly criticised the current employment services model, arguing that the annual report demonstrates the failure of privatisation. CPSU National Secretary Melissa Donnelly stated that the numbers confirm the system is moving in the wrong direction.
"Privatisation has turned employment services into a profit-driven tick-a-box industry that rewards providers for keeping people on a treadmill of unemployment," Ms Donnelly said. "The current system works well if you're a multinational corporation looking for easy profits. If you're a jobseeker or an employer looking to hire staff, not so much."
The union has called for the reinstatement of a modern Commonwealth Employment Service (CES), arguing that "it's time to end this expensive and ineffective privatisation experiment."
Departmental Response and Future Adjustments
DEWR has defended the program's performance, citing scheduled indexation adjustments that increased payments to providers by 6.8 per cent in 2024-25, the first adjustment since 2022. The department maintains that while outcomes have declined and costs have risen, these reflect the increasing complexity of jobseeker cohorts rather than systemic program failure.
Deputy Secretary Greg Manning oversees the department's continued monitoring of provider performance, with further adjustments anticipated as market conditions evolve. The conditional performance improvement plans imposed on seventeen providers represent part of this ongoing quality assurance process.
