The ripple effect of job creation

Social enterprises can help some of the most marginalised people in our society not only to gain employment but stay in it, but social enterprises also need to be supported, writes Lisa Waldron, who leads Westpac Foundation’s Employment Partnership Program.

Getting a job is not always an easy task for anyone. 

If you look at the unemployment statistics for people within some specific cohorts – like people with disabilities, Indigenous Australians, young people experiencing disadvantage, and refugees or asylum seekers – the struggle often seems insurmountable.

People without a job are missing out on much more than just an income. They don’t enjoy the other benefits employment can provide: a sense of belonging, self-worth and confidence, and the ripple effect through to their families and communities.

It’s finding creative ways to address this challenge that fires up many passionate social entrepreneurs. Today, social enterprises have created jobs for more than an estimated 300,000 people.

A report out by The Centre for Social Impact Swinburne in collaboration with Westpac Foundation, shows about 7,000 of Australia’s estimated 20,000 social enterprises focus on creating employment. 

One example is Vanguard Laundry Services in Queensland’s Toowoomba, which operates a commercial laundry that employs and trains people who have experienced long-term unemployment due to mental illness. Vanguard has psychologists and youth workers to help employees work through issues, and build up their skills and confidence to a point they are ready to join the mainstream workforce.

It’s this sort of flexibility that just isn’t possible in many typical workplaces.

And the change in the employees’ lives is profound. Nearly 80 per cent of workers in Vanguard’s employment services reported their health was either stable or improved within a year, and their median fortnightly income increased by $304. In the 18 months since Vanguard’s launch in December 2016, more than $153,000 was saved in Centrelink payments and more than $231,000 in direct hospital costs.

These results show that the tailored support offered by social enterprises can help some of the most marginalised people in our society not only to gain employment but stay in it, which is good for the individuals, their communities and the economy overall – a timely outcome, given today’s elevated underemployment and heightened debate about the adequacy of the Newstart Allowance.

Yet CSI’s report also finds much more could be done to support social enterprises.

You just need to look at the unique tensions faced by social entrepreneurs like Vanguard’s chief executive Luke Terry.

Accessing the right funding to grow, of course, is always an issue for social enterprises.

By their very nature, employment-based social enterprises invest in their employees to help manage their complex needs with flexible and tailored support, above and beyond the investment made by mainstream businesses. And, given the goal is usually to transition employees into mainstream jobs, recruiting and training of new cohorts is a constant.

All this means it takes longer for social enterprises to reach financial sustainability compared to mainstream enterprises – and why it’s so important for philanthropic organisations such as Westpac Foundation to help bridge the funding gap until they achieve scale.

Between philanthropy at one end of the funding spectrum and traditional commercial finance at the other, we have the “missing middle”. Social enterprises need access to affordable and flexible financing that recognises their unique cashflow challenges.

But they also need a lot more than just funding.

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.

Social enterprises also need a more coherent policy environment, because although there is momentum in some states, a national social enterprise strategy is yet to be realised.

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.

For our part, Westpac Foundation has committed to help social enterprises create 10,000 jobs and employment pathways between now and 2030, through a range of financial and non-financial initiatives.

We would love more people to consider flexible collaborations and work together to help more of the two million underemployed or unemployed Australians find meaningful work and improve their lives.CSI

About the author: Lisa Waldron has worked in corporate philanthropy for 19 years. Today she leads Westpac Foundation’s Employment Partnership Program that provides collaborative funding and support to help social enterprises create jobs and employment pathways for Australians who need it the most.