White Box: A new approach to solving long-term unemployment for people living with a disability

The Macquarie Group Foundation’s commitment to breaking down barriers to employment has seen it become one of three impact investors taking part in the White Box Enterprises Payment By Outcomes (PBO) trial.

The Macquarie Group Foundation (the Foundation) is one of three investors taking part in the White Box Enterprises (White Box) Payment By Outcomes (PBO) trial, a three-year trial measuring the effectiveness of jobs-focused social enterprises in creating long-term employment outcomes for people living with a disability.

“The innovative nature of the trial, with its focus on employment outcomes for those who face barriers, as well as White Box’s reputation and track record in supporting social enterprise meet their goals, align with our social impact investing thesis,” says the Susan Clear, Director of Social Impact Investing at the Foundation.

“The hope is that, if it proves to be a successful model, it can be scaled and further rolled out, to become an alternative model for supporting people back into full-time employment.”

Kaleb, who is featured in the video above, is a young person living with autism and anxiety and is employed as a digital marketing assistant by Yourtown, one of 15 social enterprises taking part in the trial. As Kaleb says, the work he now does provides a level of support and collegiality that hasn’t existed in other roles he has worked.

 

Why people living with a disability find it more difficult to obtain meaningful employment

Despite Australia’s unemployment rate being at record lows, people living with a disability still find it difficult to secure and keep a job. That’s because they face individual and structural barriers during the various stages of employment, including recruitment, retention and re-entering the workforce. These barriers to entry, unrelated to economic conditions, range from an embedded culture of discriminatory attitudes to lack of assistance in finding, securing and maintaining skills training or employment, health issues, low levels of awareness of rights at work, difficulty accessing flexible work arrangements and practicalities such as lack of transport options.1

These factors can also vary depending on an individual’s disability. For instance, Kaleb discusses his ongoing challenge dealing with loud noises, which hampered his ability to work and socialise in many workplace settings.

As a result, people living with a disability are almost three times as likely to be unemployed than someone without, and they’re also likely to be unemployed for longer.2

For people living with a disability, the negative impact of this long-term unemployment extends beyond poverty or welfare dependence. It also leads to poorer emotional, social and health outcomes. People in long-term unemployment are more likely to suffer from mental health issues, including depression, as well as several chronic diseases - the cost of which is usually met through public funds.

In short, a lack of suitable employment options has ramifications beyond the individual, impacting society as a whole.

 

A traditional approach to subsidising long-term unemployed

One way governments have traditionally tended to support the long-term unemployed into the workforce has been through wage subsidies which incentivise employers to employ and retain staff. However, Angharad Lubbock, Head of Programs and Advisory Services at White Box, says that this approach traditionally has a high failure rate, especially when it comes to getting people with a disability into long-term work.

“When you subsidise this way, you’re saying there is a deficit that needs to be addressed,” she explains. “You’re saying to an employer: this person will be a handbrake to the success of your business, so you need to be compensated for employing them.”

Lubbock says that another shortcoming of the traditional approach to subsidies has been that it encourages people with a disability into ‘any’ job, rather than into work that suits their abilities or interests. This means they often tend to end up working repetitive jobs that provide little stimulation or fulfilment, also making them more likely to leave.

 

How Payment By Outcomes (PBO) is different

The White Box PBO trial is different because it centres on jobs-focused social enterprises says Lubbock. Jobs-focused social enterprises are just like any other business - they sell goods or services; however, their primary goal is to create jobs for people experiencing disadvantage. Rather than generating a profit for shareholders or owners, they reinvest their profits back into the programs that help create a more supportive environment for their employees.

Lubbock says that by connecting someone living with a disability to a social enterprise rather than a traditional company, the employer can “develop a role, or even a product or service around the skills and ability someone brings to the organisation,” rather than the other way around. 

“They can be competitive in the market, supported by people who would otherwise be excluded from the workforce.”

This approach, Lubbock says, has already proven to be far more successful in keeping people at work, compared to the existing disability employment services model.3 Within the first eight months of the trial, 81 people have enrolled. During this time, 90.1 per cent remain engaged with their social enterprise giving them the option to build experience and earn award wage income.5

The people participating in the White Box PBO trial include people with a disability. These individuals may also be additionally marginalised due to other factors such as having First Nations, refugee, or justice system backgrounds.

As each person achieves milestones in their employment, the social enterprise employing and supporting them will receive outcomes-based payments at six, 12 and 18 months. They will also receive similar outcome payments if an employee chooses to transition to another employer.

As one of 15 social enterprises participating in the PBO Trial, Yourtown is paid directly for the job outcomes it creates. The payments are designed to help cover the costs associated with the wrap-around supports, which are key to creating a more inclusive work environment for people like Kaleb.


White Box Enterprises PBO Trial: Success to date

How we are tracking

June 2023

83

participants

86%

retention

16

jobs-focused social enterprises 


A synergy with the Foundation’s approach

“Social impact investing applies an impact-focused lens to deploying capital,” Susan Clear explains. “We prioritise looking at what impact will be generated by a given project, with consideration of the long-term financial sustainability of an investee. We are looking for a financial return - even if it isn’t at market rates.”

Social impact investing has the benefit of being flexible and long-term. It also provides a level of risk tolerance that’s often not applicable to other forms of investing, in that impact investors can accept concessionary returns in exchange for knowing their capital will also help address an important issue.

In line with this, Clear says the Foundation continues to review different investments and opportunities, to identify what factors might help an intervention be most effective, both financially and socially.

“Social impact investing is not a replacement for philanthropy, but rather, is a complement that can be applied in different ways. A blended finance approach, where an organisation receives both philanthropic funding and a social impact investment, can often be an effective mechanism to enable the organisation to meet their mission.”

“Ultimately, there will only ever be a limited amount of money earmarked for traditional philanthropy, compared to significant pools of capital available otherwise. One of our goals is to also to connect with and encourage other funders to unlock more capital for social good.”

The result should be more people just like Kaleb finding fulfilment and purpose through meaningful, appropriate employment that allows them to use their skills and talents. 

 

  1. Australian Humans Rights Commission, Our Work, Barrier to Employment 
  2. Australian Institute of Health and Welfare, ‘People with disability in Australia’ 
  3. Department of Social Services Annual Report 2021-22, page 89
  4. National Institute of Health, ‘Health in the Long Term Unemployed’ 
  5. Supplied by White Box Enterprises, verified by Department of Social Services.