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For richer, for poorer? Government’s role in preserving standard of living

Learn about delivering public service for the future by creating high performing labour markets in Australia.

Overview

Accenture’s latest Delivering Public Service for the Future research focuses on the role of labour markets in assuring national well-being. For this research, we analysed the implications of demographic changes in 162 countries. We surveyed jobseekers, employers and public employment service officials in Australia as well as 10 other countries, 12 US states and the Canadian province of Ontario. And we focused on this burning platform: If governments do not respond with urgency and decisiveness to address the fundamental challenges in their labour markets, they will see a decline in productivity growth and a shrinking workforce. That, in turn, may result in a decline in overall standard of living in the future.

Although the public expects its standard of living to continue improving, three factors threaten the fundamental assumption that future generations will be better off than their parents: profound demographic changes resulting in fewer people available to work, a stagnant participation rate, and declining productivity growth leading to lower personal income and a less wealthy society. If participation rates and productivity growth do not increase, Accenture predicts that standard of living in Australia will decline 8 per cent by 2030.

By aligning to the four fundamental shifts necessary to deliver public service for the future, Australian public officials can help create a jobs and skills environment that is more transparent and connected—and that offers greater flexibility and accessibility. In doing so, they can play a pivotal role in achieving a world-class labour market that preserves the standard of living.

Background

Accenture analysed trends related to demography (the share of working-age population in the total population), workforce participation rates (the share of working-age people who are employed) and productivity (workers’ contribution to a country’s gross domestic product, or GDP) in 162 countries. Together, these factors add up to GDP per capita, used as the measure of standard of living.

Although Accenture’s standard of living model provides participation and productivity outcomes required to counter the impact of projected demographic headwinds, it does not offer insight into the most effective way of achieving these outcomes. To obtain a 360-degree view on the jobs and skills environment, Accenture conducted four surveys—the Accenture Citizen Survey, the Accenture Job Seekers Survey, the Accenture Employers Survey and the Accenture Public Employment Services Officials Survey—in Australia as well as 10 other countries, 12 US states and the Canadian province of Ontario.

  • Sixty-three per cent of Australian citizens surveyed have little or no trust in government’s ability to act quickly enough to address employment and skills issues.

  • Only about 15 per cent of Australian employers surveyed identify public employment services as the best source for information on prospective candidates.

  • Nearly one-third (32 per cent) of Australian jobseekers feel they need a fair amount or a great deal of training to acquire the skills and job they are seeking – . jobseekers need to take responsibility of becoming ‘job ready’ and transitioning from education to employment.

  • Finally, 41 per cent of Australian public employment service staff surveyed consider a lack of engagement with the business community to be a key challenge impeding their work.

Analysis

Accenture’s latest Delivering Public Service for the Future research points to a number of factors affecting labour markets and threatening standard of living in Australia:

  • Geographic dislocation of jobs. Dislocation of work for certain industries can make it difficult for people to find gainful employment and the right type of jobs—leading to under-employment and lack of productivity.

  • Barriers to entry. Lack of work experience, overqualification and lengthy commutes create barriers to entering the workforce—particularly among youth (aged 18-24) and women.

  • Mismatch between skills and jobs. While Australia has made headway in addressing the skills gap, jobseekers and employers still experience a mismatch between supply and demand of skills.

  • Volatile business environments. Employers point to rigidities in the labour market, including hiring and firing processes, with half of Australian employers surveyed indicating that there is too much regulation in the labour market.

Though only one of many stakeholders in any labour market, the Australian government has an opportunity to play a pivotal role in orchestrating the jobs and skills environment, and supporting a world-class labour market.

Recommendations

Accenture believes that a new, comprehensive approach is needed to address threats to standard of living and deliver a world-class jobs and skills environment—one that requires a transformation not only of public employment services, but also of education and skills providers, jobseekers and employers.

To deliver public service for the future, Accenture believes high-performing labour markets must be:

  • Transparent and Insight Driven. High-performing governments that embrace greater transparency, intelligent forecasting and data insights will help deliver better outcomes and shift labour markets from reactive to insight driven.

  • Connected and Collaborative. A connected labour market requires open sharing of information and strategies across a complex jobs and skills environment—along with greater engagement among public service officials, employers and educational institutions. Digitally enabled collaboration fosters a greater understanding of each stakeholder’s role and contributions in the labour market.

  • Flexible and Accessible. High-performing labour markets can be defined as those with responsive regulatory environments that allow business to be flexible and adapt to the inherently dynamic nature of business. Governments that shift from a public management to public entrepreneurship mindset will also be better positioned to adjust to new demands.