Mega trends impacting the social sector

One year on from the start of COVID-19 in Australia, we are seeing signs of economic recovery. At the same time, however, we are also seeing an increase in inequality, growing demand for community services and changes in how this support is being provided. Social sector organisations have an important and critical role to play in rebuilding Australia and ‘building back better’1  post COVID-19.

We see six mega trends that social sector leaders will need to navigate as they plan for the future – these being: (1) Rising inequality and loneliness, (2) Government constraints, (3) The rise of the consumer, (4) Disruptive business models, (5) Digital innovation, and (6) The future of work.

Trend 1 - Rising inequality and loneliness

Whilst we are a ‘lucky country’ for some, we are not a lucky country for all. The stronger than expected economic recovery from the COVID-19 recession2  is not universal across industries and locations. Before COVID-19, 1 in 23 Australians experienced deep and persistent disadvantage3 . With the end of JobKeeper and the post COVID-19 JobSeeker payments4, many more Australians are likely to experience poverty. 

Compounding this growing inequality is the rising levels of loneliness5, which is recognised as a root cause for anxiety, depression, and domestic violence6  across Australia and serves to deepen the sense of division and polarisation in society. 

Social sector leaders will need to anticipate and respond to these increases in demand, whilst also investing in prevention and early intervention activities that help to reduce demand into the future.

Trend 2 - Government constraints and learning to do more with less

Whilst the economy is recovering strongly, it is too early to predict the government’s plans for fiscal repair and medium-to-long-term funding intentions. The adoption of austerity-style policies is likely to be delayed until after the next federal election, however there will be sustained pressure on the social sector to do more with less7. These pressures may lead to two responses:

• Greater sector consolidation - with increasing numbers of smaller organisations reporting consideration of closing or merging with larger organisations, and;
• Greater focus on ‘core business’ - with more organisations focusing their operations on core business and core capabilities, rather than diversification.

Social sector leaders will be faced with tough decisions if government funding tightens, including their role in sector consolidation and having a disciplined focus on core business.

Trend 3 - The rise of the consumer and the need to deliver personalised services

Consumers today have more access to data, information, and knowledge to inform their choices, which is increasing their expectations for goods and services to be personalised to their needs. This is further accelerated by advances in technology, that enable the personalisation to be in their hands. 

Consumer directed care models, such as the National Disability Insurance Scheme (NDIS), are the launch pad for considering more effective models of care, with the recently published Aged Care Royal Commission advocating for a new system with consumers at the centre8. 

Social sector leaders will need to consider what rising consumer expectations and personalisation will mean for their organisation and what their unique value proposition is for consumers.

Trend 4 - Disruptive business models, new models of support and partnerships

There is a growing recognition that the current way of delivering many community services is not effective, as evidenced by the Royal Commissions into Aged Care and Disability, and that we need to act differently. This is forging the way for:

• Innovative business models – platform businesses, like HireUp9, which connect people in need of support with workers through online marketplaces, and harness the network effects of positive staff profile ratings
• New models of support – such as Hilary Cottam’s, Radical Help10, which places relationships at the core of any community support system and pursues the holistic vision of “good lives lived well”
• New cross-sectoral partnerships – such as the #SaveOurSector campaign11, where CBA, HESTA and others, collaborated with the Our Community to give the social sector access to capacity building resources during COVID-19. 

Social sector leaders must continue to ‘think outside the box’ and pursue innovative solutions that tackle systemic issues, at scale.

Trend 5 - Digital innovation

Digital innovation is helping to transform the social sector, both in terms of client experience and back office, such as:

• Virtual care including telehealth, which has accelerated dramatically through COVID-19
• Unassisted living through smart homes, robotics etc
• ‘Best of breed’ cloud-based systems, such as Salesforce, Workday and Microsoft based applications, that meet the sector’s requirements
• A mobile and augmented workforce enabled through smartphones and cloud-based solutions
• Big data and artificial intelligence driving strategic and operational decision making 

Social sector leaders will need to consider how digital innovation can enhance their client experience and improve back office efficiency and strategic and operational decision-making.

Trend 6 - Future of work

The future of work was a hot topic before the pandemic and it now feels that the very nature of work has changed, especially for social sector organisations, as they grapple with and respond to:

• Chronic shortage of care workers and the need to attract more workers into aged care and disability
• Changing worker expectations, with a greater focus on purpose-led work and flexibility
• The rise of the gig economy but with increasing protection for casual workers
• The need for workers to continually re-skill
• Longer careers as we work in an era of longevity12

Social sector leaders will need to recognise that attracting and retaining a qualified, experienced, and motivated workforce will be one of their biggest challenges13. 

The challenges ahead for social sector leaders are complex, yet these trends present tangible transformation opportunities to better support our communities. Contrary to conventional wisdom that being in this state of flux only leads to change fatigue and inaction, the social sector throughout COVID-19 has proven that people and organisations are highly adaptable, and in fact, can be more receptive to change when habits are already disrupted14.

How will you respond to these mega trends and harness the transformation opportunities to have a greater impact?

Need help?

Deloitte Social Impact Consulting

Deloitte Australia’s Social Impact Consulting Practice supports social sector organisations, government agencies and businesses to deliver greater social impact aligned to their vision and mission. Our team is passionate about bringing the latest trends in strategy, technology and innovation from adjacent industries and global players to support social sector organisations to be ‘future fit’ in an increasingly complex, disrupted and competitive market.

Should you require any support, please feel free to reach out to either Tharani Jegatheeswaran (Partner – Social Impact Consulting) or Les Hems (Principal – Social Impact Consulting).

References:
1. OECD Building back better: A sustainable, resilient recovery after COVID-19 – June 2020
2. DAE Business Outlook – January 2021; ABS February 2021 Release
3. Australia Welfare Report 2017
4. ABC News – March 2021
5. Together, Vivek Murthy
6. Women’s Safety NSW – September 2020
7. ProBono Australia – May 2020
8. Department of Health – March 2021
9. HireUp
10. Radical Help, Hilary Cottam
11. #SaveOurSector campaign
12. The 100-year life, Andrew J Scott and Lynda Gratton
13. Hammond Care – March 2021
14. A good time for a (behavioural) change – Deloitte Human Capital Consulting – June 2020