Back to Work: Australia

Improving the Re-employment Prospects of Displaced Workers

image of Back to Work: Australia

Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is the fourth in a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that many displaced workers get new jobs relatively quickly in Australia, mostly thanks to a flexible and dynamic labour market. A small minority of displaced workers receive special support via the labour adjustment programmes, but some displaced workers who would need specific assistance, in particular in the older worker and/or low-educated groups, do not get sufficient support or only too late. There is room to improve policies by moving away from the current sectoral approach to special assistance programmes for workers collectively dismissed, towards an approach covering all sectors of the economy, with the intensity of intervention tailored to the circumstances and needs of the displaced workers. Expanding the training component for displaced workers and making use of skills assessment and training to better target the training and enhance its effectiveness would also help displaced workers transition to sustainable jobs of a certain quality.



Mainstream income support and re-employment services for Australian displaced workers

Many displaced workers in Australia who do not quickly find jobs are likely to be ineligible for income assistance for an extended period of time following their redundancy. This is consistent with the Australian social assistance approach which restricts income support to persons most in need. Since access to more intensive re-employment services is conditional on the receipt of income support, this also implies that a majority of displaced workers do not qualify for these services. Even those who qualify mostly receive only basic support during the first year of unemployment. By this time, a number of displaced workers who did not find a new job may have become demotivated or even have exited the labour force, making a return to work more difficult. This approach minimises the inefficient use of resources on displaced workers who do not need help, but can be problematic for those who face more difficulties in finding a new job, notably older displaced workers. Moreover, the incentive structure for employment service providers is tilted more to getting the unemployed quickly back into work than investing in training, which may further reduce the likelihood of low-qualified or long-tenured displaced workers switching to new jobs in sectors and occupations in demand.




This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error