Around 7,000 social enterprises are creating jobs in Australia. A new report outlines how a people-centred approach to employment makes a difference.
The report released by the Centre for Social Impact (CSI) Swinburne in partnership with Westpac Foundation examines how employment-focused social enterprises can produce better employment outcomes than mainstream employment services for people experiencing significant disadvantage. Social Enterprise: A people-centre approach to employment services also outlines what more needs to be done to help grow the sector.
Today there are over 20,000 social enterprises in Australia, with 35% focused primarily on job creation. Social enterprises currently employ more than 300,000 people around the country.
“The ripple effect of a job is powerful. When people work, we leverage all of the talent available to our country. The individual has a sense of belonging and purpose, families and communities are stronger, and so is society,” said Susan Bannigan, Westpac Foundation CEO.
Demand for jobs remains high, with 722,000 unemployed people aged 15 and above, 1.04 million underemployed and 1.08 million marginally attached to the workforce.
Yet mainstream employment solutions, underpinned by policy that prioritises getting the greatest number of people into work quickly and places the onus to participate on individuals, are not helpful for people experiencing systemic disadvantage.
According to the report, employment-focused social enterprises provide many benefits including:
- Offering an alternative people-centred approach to employment services for people with complex needs.
- Improving quality of life for disadvantaged Australians by providing tailored, people-centred employment solutions.
- Being a sustainable business model which can be more productive than its commercial counterparts.
- Producing high social returns and social benefits that outweigh the costs of employment-focused enterprises, in some cases doubling society’s return on investment.
- Billions in GDP gains by improving the labour participation of disadvantaged Australians.
For the individual, the report says the support of employment-centred social enterprises can lead to increased income, relevant and meaningful work experience, changes to identity, enhanced vocational and generalised skills, enhanced self-esteem and self-efficacy, and increased sense of belonging.
For communities, they provide economic regeneration, community hubs and increased community cohesion and equity.
While they have great potential, the report notes that social enterprises face unique challenges.
Accessing the right funding to grow is a major issue. Substantial investment is required for recruiting and training, supporting the complex needs of their employees, and then transitioning them to mainstream jobs. This means it takes longer for social enterprises to reach financial sustainability compared to mainstream enterprises.
In an opinion piece for Westpac Wire, Lisa Waldron, who leads the Westpac Foundation Employment Partnership Program, says this is why it’s important for philanthropic organisations to help bridge the funding gap until social enterprises achieve scale.
“Between philanthropy at one end of the funding spectrum and traditional commercial finance at the other, we have the ‘missing middle’,” says Waldron. “Social enterprises need access to affordable and flexible financing that recognises their unique cashflow challenges.”
Westpac Foundation has committed to help social enterprises create 10,000 jobs and employment pathways between now and 2030. But that support is not just financial – there will also be a range non-financial initiatives.
“A great and simple way for businesses to show support is through their procurement – providing social enterprises with opportunities to provide their services, be it for catering, facilities or asset maintenance, recycling, laundry or the like,” says Waldron.
A more collaborative cross-sector approach and further research is also needed to inform policy support – a national social enterprise strategy is yet to emerge – and develop more adequate investment options for the sector.
“To help manage and promote these unique tensions and support social enterprises in their important work, we need a range of people – including policymakers, researchers, funders, financiers, IT specialists, marketers and consumers – to come together,” says Waldron.
Read Lisa Waldron’s opinion piece, Why social job gains mean so much.
Read the full report here.