Organisations tasked with helping unemployed Australians find jobs are being "rewarded" with perverse incentives for putting people in ill-suited roles, exacerbating labour shortages.
Despite the tight jobs market, many Australians without qualifications or work experience are struggling to get their foot in the door, a report by not-for-profit Anglicare Australia has revealed.
For every entry-level job across the country, there are 33 people out of work.
In the Northern Territory the situation is even more dire, with 65 job seekers to every starter position.
Barriers to work for the long-term unemployed are being exacerbated by an employment system that incentivises organisations to match job seekers with poorly suited jobs, Anglicare executive director Kasy Chambers said on Wednesday.
Employment service providers receive payments for getting job seekers into their case load, into training or into jobs, but there are no incentives for making sure they stay in their jobs long-term.
That results in a system of churn, where job seekers are run through a gauntlet of interviews, reporting, and training courses that don't lead to fulfilling jobs.
"In many ways you're rewarded, because you'll get that intake money again, you'll have somebody for training courses again, so in some ways it's actually rewarding if they don't stick," Ms Chambers told AAP.
"And of course, that's quite damaging to the individual's mental health."
The result is not just harmful for the individual seeking work, it's damaging for employers too.
Australia's labour market is historically tight, with unemployment at 4.1 per cent, leaving many businesses struggling to fill roles and pushing up wage expenses.
Helping people get back into the workforce would help alleviate that strain.
The Reserve Bank of Australia has pointed to the country's "unusually tight" labour market compared to peer economies as a reason why they are lagging fellow central banks in cutting interest rates.
The report found almost two-thirds of people out of work are long-term unemployed.
People with disabilities, early high school leavers and older workers who lose their jobs later in life are among those who find it hardest to break into the jobs market.
"With such tight numbers, people with barriers to work barely stand a chance," Ms Chambers said.
"It's no wonder that many are long-term unemployed. Each year, we find that the same people are being left behind by the job market."
The government has previously committed to "large-scale reform" of the employment services sector and has implemented changes to mutual obligation rules and improved complaints systems.
Ms Chambers welcomed the government's attempts to fix the system but said much more needed to be done.
"They've taken some of the negative out, but not a lot," she said.
"It's still a pretty miserable place to find yourself."
One Newcastle man she had spoken to had applied for more than 120 jobs this year and not heard back from any of them.
"The employment services tend to be lazy. They tend to know where an industry is that has a big churn and a big demand for employees.
"It's not looking at the person in front of you and thinking, what can they do?"
