Making Indigenous employment everyone’s business: Indigenous employment and retention in non-Indigenous-owned businesses

Abstract

Indigenous employment has attracted an increasing focus in recent decades from policy-makers, in the context of the gap between national rates of Indigenous and non-Indigenous employment. Non-Indigenous businesses are implementing a series of workplace and recruitment policies to enhance their rates of Indigenous employment, yet there is limited research demonstrating the impact of these policies. This paper uses primary survey data from a representative sample of Australian-based non-Indigenous-owned businesses to detail how Indigenous-focused workplace and recruitment practices are associated with Indigenous employment and retention. Descriptive analysis reveals that businesses with a workforce with 3.8% or more Indigenous employees (3.8% being the most recent Indigenous population proportion estimate) are more likely to maintain a series of Indigenous-specific workplace and recruitment practices, including celebrating NAIDOC, having a Reconciliation Action Plan (RAP), and cultural competency training, compared to businesses with fewer than 3.8% Indigenous employees. Businesses with higher Indigenous employee retention rates similarly demonstrate a higher likelihood to maintain these policies; however, the clearest delineation for businesses with 3.8% or more Indigenous employment and high Indigenous staff retention, is the presence of Indigenous management within these businesses. Revealingly, probit regression models demonstrate that Indigenous manager/s in a business are associated with a 50–60% higher probability of maintaining an Indigenous employment rate of 3.8% or above and an 11–16% lower probability of having poor Indigenous staff retention. Therefore, this paper reveals the importance of having Indigenous people in positions of organisational influence within non-Indigenous organisations, more so than implementing isolated workplace strategies.

Background

A feature of Australian policy-making in recent decades has been a recognition of the need to enhance Indigenous ¹ employment outcomes. Indigenous labour market outcomes are improving over time; however, progress is sporadic and not in keeping with the ambitions of Indigenous people. Indigenous economic outcomes have been devastated by the ongoing impacts of colonisation, including massacres, expropriation of land and resources, and disruption or eradication of traditional laws, customs, practices, and culture. This significant disruption of Indigenous economies has meant that Indigenous people have been denied the ability to achieve genuine self-determination within the confines of the Australian state. The only available means to exercise one’s economic will is through the mainstream Australian economy, which is governed by a set of regulatory and social laws, customs, practices, cultures, and values that have traditionally marginalised Indigenous people, resulting in substantial exclusion and discrimination in the Australian labour market and in business (Leroy-Dyer 2021; Shirodkar and Hunter 2021).

An increase in the national rate of Indigenous employment is one of the outcomes that forms part of the National Agreement on Closing the Gap, the centralised policy framework that aims to address significant disadvantages in multiple socio-economic and socio-cultural outcomes for Indigenous peoples in Australia (Australian Government 2020). The national rate of Indigenous employment was recorded at 55.7% in 2021, below the non-Indigenous rate of employment (77.7%), but notionally on track to meet the 62% target in the National Agreement by 2031 (Productivity Commission 2021). However, subsequent research casts some doubt on this forecast (Monem & McDonald 2023), and a multitude of research continues to identify the limitations of Australian institutions to create workplaces that are safe and successful employers of Indigenous peoples (e.g. Biddle and Lahn 2016; Faulkner and Lahn 2019; Brown et al 2020; Leon 2022; Minderoo Foundation et al 2022; Leroy-Dyer and Menzel 2024; Eva et al 2024a). Whilst Indigenous-owned businesses consistently demonstrate they maintain strong Indigenous employment outcomes (Hunter and Gray 2017; Evans et al 2021; Eva et al 2023b), it remains a continuing focus for the majority of Australian institutions that are non-Indigenous-owned.

Whilst Australian governments have maintained a longer focus on Indigenous employment both as a targeted policy area and as an employer, Australian businesses have relatively recently undertaken formalised approaches to Indigenous employment. The current most common strategy appears to be the implementation of a Reconciliation Action Plan (RAP), which Reconciliation Australia (2024) notes are undertaken by over 2,700 Australian employers. Whilst RAPs do not have a sole focus on increasing or sustaining Indigenous employment, it is often a feature of what is a broad range of initiatives and strategies that institutions are undertaking (e.g. The Australian National University’s 2021 RAP contains a goal to increase employment annually at least until parity is reached). Recognising that non-Indigenous staff may not have requisite education on Indigenous cultures, histories, and perspectives, organisations also undertake various Indigenous-focused education and training programmes that aim to ensure their workplace is safe and supportive of Aboriginal and Torres Strait Islander staff. This can take the form of cultural competency training (Fredericks and Bargallie 2020), unconscious bias training (Leon 2022), or targeted anti-racism training (Pearson et al 2023). Specific recruitment policies that aim to enhance businesses’ rates of Indigenous employment are also an increasingly present strategy, such as Indigenous-identified positions, Indigenous employment targets, and tailored recruitment and training programmes. Inherently, these recognise the under-representation of Indigenous peoples within a business’s workforce, and recruitment and development processes that have been exclusionary of Indigenous peoples.

Whilst these approaches can be viewed as a recognition that (non-Indigenous) Australian employers and their majority non-Indigenous staff have historically and continue to maintain limitations in their capacities to work with Indigenous peoples, there are still significant criticisms of their efficacy and the extent to which they are being undertaken earnestly (Eva et al 2024a; Jones et al 2024). Inherent in this, is the risk of the prevailing narrative of deficit that it is Indigenous peoples that are a ‘problem to be resolved’ with such strategies, rather than the responsibility of non-Indigenous institutions (Shirodkar 2021; Pearson et al 2023). Moreover, there is significant scepticism in businesses’ genuine commitment to creating organisations that are inclusionary of Indigenous people, where there are suspicions that Indigenous-focused initiatives undertaken by non-Indigenous businesses are based mostly on the company’s external image rather than its internal processes. It is Indigenous businesses’ consistent commitment to Indigenous employment that differentiates Indigenous-led institutions from the vast majority of Australian institutions (which are non-Indigenous-owned). (Eva et al 2024a). Indigenous organisations are more likely to maintain the requisite knowledge, but also commitment to creating strong Indigenous employment outcomes (Eva et al 2024a).

This article reports on findings from a primary survey of 680 non-Indigenous-owned Australian businesses. The focus of this article relates to the uptake of Indigenous-focused workplace and recruitment policies and practices, and their potential association with at least proportional representation of Indigenous employees and Indigenous employee retention rates. Specifically, this paper investigates the characteristics of businesses that are associated with a rate of Indigenous employment of below and above 3.8% of a business’s total workforce. While 3% remains a common target for non-Indigenous businesses, the 3.8% threshold is chosen as it is the proportion of the overall Indigenous population as a share of Australia’s population, as identified in the Australian Census of Population and Housing 2021. Similarly, this paper investigates the characteristics of businesses that are associated with Indigenous employee retention, relative to the retention rates of non-Indigenous staff. This paper therefore contributes an important exploration of the characteristics that may be identified as supportive of an Indigenous workforce.

Indigenous employment targets

In response to the proportional under-representation of Indigenous people in the labour market, individual public Australian institutions are increasingly adopting their own Indigenous employment targets. These are largely aimed at ensuring that Indigenous peoples are proportionally represented within Australian institutions, where this has either historically been or currently not the case. As of the 2021 Census, 3.8% of the Australian population identified as Indigenous, with many institutions basing their employment targets broadly off the national benchmark. The Commonwealth Government has adopted two targets for Indigenous representation within the Australian Public Service. A target was set for 5% Indigenous representation between APS levels 4–6 (2022) and Executive Levels 1 and 2 (2024), and 3% in Senior Executive roles by 2024 (Commonwealth Government 2020). Similarly, State and Territory Governments also maintain their own Indigenous employment targets. The NSW public service exceeded its 3% employment target before the 2025 target year and has subsequently shifted focus to ensuring that Indigenous employees are better represented across seniority levels (NSW Public Service Commission 2022). Western Australia has adopted a 3.7% target for 2025 to reflect the proportional Indigenous population within the state (West Australian Public Service Commission 2020). In the Northern Territory, Indigenous people make up a third of the population, with the public service maintaining a 16% Indigenous employment target (10% in senior positions), noting that the target is still significantly below the Indigenous population rate (Northern Territory Government 2021). Within Commonwealth and State/Territory Public Sectors, individual departments maintain more tailored or ambitious employment targets, often reflecting a need for a strong Indigenous workforce in certain policy areas (e.g. The Department of Health and Department of Families, Fairness and Housing in Victoria (2021)).

Employment targets within public institutions are crucial in ensuring there is equitable representation of the diversity of the population in designing and delivering policy and services for the broader population. However, private businesses have also adopted their own targets, frequently as part of reconciliation commitments. This is undertaken often in reference to the current or pre-existing under-representation of Indigenous staff within their institutions. As is the case for both public and private institutions, the targets are also underpinned with specific policy frameworks that aim to help meet these targets. As such, these formalised targets are more often adopted by larger private firms that are willing to invest resources into developing higher rates of Indigenous employment. For example, Australia’s two largest nationwide supermarket chains maintain targets of 3.2% by 2025 (Woolworths Group 2023) and Coles 3% across all management and senior leadership roles, having reached 3.5% Indigenous employment across the organisation (Coles Group 2024). These are aimed to be largely on par with the proportional Indigenous population rate. For other organisations, broader factors influence the design of their employment targets – for example, for some mining operations, high targets of Indigenous employment are specifically required in the terms of a land-use agreement with Indigenous landowners (National Native Title Tribunal 2015), or as a method to gain a social licence to operate. It is in this context that it is important to note that a rate of Indigenous employment at or above population parity may simply be an indication of the extent to which a workplace draws on Indigenous labour, rather than a sole metric of success. For example, some organisations maintain Indigenous employment outcomes as a mandatory requirement of their operation (i.e. through Indigenous Land Use Agreements) and have committed significant harm to Indigenous communities. One of the more recent high-profile examples of this was Rio Tinto’s destruction of the Juukan Gorge, which is a sacred site for the Puutu Kunti Kurama and Pinikura peoples. This destruction of Indigenous heritage came despite the company having the highest level of RAP and maintaining strong rates of Indigenous employment (Reconciliation Australia 2020; Parmenter & Barnes 2021). This event was emblematic of the scepticism of the commitment of organisations to Indigenous outcomes as more of an external focus to build social capital, rather than to genuinely become an organisation that values Indigenous peoples (Pearson et al 2023; Eva et al 2024a).

Retention and attrition

Even for institutions with high rates of Indigenous employment, high turnover of Indigenous staff may be evidence of an institutional environment that is pushing Indigenous staff out of the organisation (i.e. Biddle and Lahn 2016). In a detailed study of Australia’s largest employers, The Minderoo Foundation et al (2022) found that for almost two-thirds of businesses that maintained data on retention, Indigenous retention was lower than non-Indigenous retention. In trying to determine the reasons why Indigenous peoples were more likely to undertake voluntary separation from the Australian Public Service, Biddle and Lahn (2016) noted oversold expectations of the public service (such as scope for impact), the politics and values of the public service not aligning with staff, lack of career progression and mentorship, racism and follow up response, and Indigenous staff being undervalued. Foley (2005) described how such experiences contributed to Indigenous entrepreneurs leaving the public service to start their own businesses. Similarly, when describing why they left previous roles within non-Indigenous organisations for a role in an Indigenous-owned business, Indigenous participants in a study by Eva et al (2024a) cited experiences of racism, of being undervalued, of having their values compromised, and not being able to pursue work that aligns with their own aspirations. This was seen as a contrast to Indigenous-led institutions that were absent of these characteristics. For non-Indigenous institutions, studies by Deroy and Schütze (2019) and Brown et al (2020) detail the necessity of creating a culturally safe workplace, providing professional development opportunities, embedding racism-compliant procedures, maintaining Indigenous mentorship opportunities, and celebrating Indigenous dates of significance as all having a positive impact in Indigenous staff retention. However, when the workload of facilitating these initiatives is solely and unduly placed on Indigenous staff, especially without requisite remuneration, this has the opposite effect (Menzel 2022; Brown et al 2020).

What the existing research demonstrates is that whilst the implementation of certain workplace and recruitment strategies can be impactful in the recruitment and retention of Indigenous staff, their impacts may be limited where the underlying purpose and commitment to these are not genuine. This is one explanation as to why there are significantly divergent rates of Indigenous employment within Indigenous and non-Indigenous institutions, given the Indigenous-led approaches facilitated within Indigenous businesses (Eva et al 2024a). There is still limited evidence empirically demonstrating the association of Indigenous workplace and recruitment policies within non-Indigenous businesses. Therefore, it is important to try and test these associations to determine what policies and practices are most successful in meeting Indigenous employment and retention goals.

Research questions

1. 1. Are there differences in the uptake of Indigenous-focused workplace policies between businesses with higher rates of Indigenous employment and retention, compared to those with lower rates?

2. 2. How do non-Indigenous perspectives on workplace conditions relate to Indigenous employment and retention rates?

3. 3. What workplace practices/characteristics maintain a correlation with 3.8% or higher rates of Indigenous employment, and enhanced Indigenous staff retention?

Method

The data used in this article are drawn from a primary survey of 680 non-Indigenous-owned businesses in Australia. The survey was undertaken as part of a wider research project that explored and compared Indigenous employment and Indigenous employment practices between Indigenous-owned and non-Indigenous-owned businesses in Australia. The survey was therefore designed with multiple focuses and considerations in mind, and as such different analyses on other variables in the survey are reported on in other research articles (Eva et al. 2024b; 2024c). As discussed in the literature review, there have been quantitative studies that explore Indigenous employment in non-Indigenous organisations (such as the Woort Koorliny Report; Brown et al 2022); however, that study focuses on Australia’s largest employers and as such is not a reflection of the majority of Australian businesses. The survey used in this paper was designed to be comparable to the dynamics of the Indigenous business sector and reflective of the characteristics of the business sector in Australia, such as through industry profiles. ²

The survey questions were designed based on the existing research environment, such as described in the literature review, and sought to gain information about the presence of select workplace practices highlighted in previous literature as potentially associated with Indigenous employment and retention. These include the adoption of Indigenous-specific recruitment policies (i.e. employment targets), the adoption of Indigenous-focused workplace initiatives (such as the celebration of NAIDOC), and workplace practices that were highlighted as potentially influencing Indigenous employment & retention (Indigenous management, career development, etc.). Questions also included in the survey related to broad characteristics of the businesses, such as industry, geography, business size, and profit status to determine if these characteristics moderated Indigenous employment rates or Indigenous workplace practice. The design of the survey then allowed for:

• comparison in the characteristics of the Indigenous and non-Indigenous business sectors in relation to rates of Indigenous employment (Eva et al 2024b)

• the interrogation of what factors are associated with a higher number of Indigenous employees (Eva et al 2024c), and

• an analysis of the characteristics of non-Indigenous businesses in relation to their capacity to maintain proportional rates of Indigenous employment and equitable Indigenous employee retention (as reported in this paper).

The survey was distributed through the research platform Qualtrics, to three of their four research panels in the early months of 2023. The survey was sent to those identified in the panels as ‘business owners, directors, and senior decision-makers’. This cohort of respondents was sought as they were affiliated with a business in Australia and would maintain the requisite knowledge about their businesses to be able to answer the survey questions. Several screening questions were developed to ensure that the survey reached the desired cohort of respondents. Respondents were asked to confirm their position as a ‘business owner, director, or senior decision-maker’, that the business was not Indigenous-owned, and that their business maintained at least 2 employees. Businesses with fewer than 2 employees were excluded as they were less likely to have specific recruitment or workplace policies. Whilst the majority of Australian businesses have fewer than 20 employees, businesses with 20 or more employees were deliberately oversampled as it was hypothesised that larger businesses might more likely maintain greater capacity and resources to implement Indigenous-specific workplace policies. As such, it was important that the sample maintained a strong representation of larger businesses to ensure reliable comparisons and analysis could be made across businesses of different sizes. Of the 1,500 respondents that partially or fully completed the survey, the final sample was reduced to 680 with those outside of the parameters above screened out and those of poor data quality excluded.

While the final sample provided by Qualtrics was 680, the initial sample size sought was 500, which would be sufficient to make inferences about the population of non-Indigenous-owned Australian businesses (de Vaus 2013). The larger sample allowed for the adoption of smaller standard errors when estimating confidence intervals. Using the 2018–2019 Business Longitudinal Analysis Data Environment (BLADE) from the ABS (2020), we can provide an estimate of the population of which this study sought to investigate. Excluding businesses with 0 employees, there were 717,396 businesses. Noting the size of this population, using a confidence interval of 99% (Z-Score of 2.576), a margin of error +/− 5%, and a standard deviation of .5, the minimum sample required is N = 664, calculated via (2.576² × 0.5 × (1 − 0.5))/0.05², as per (Smith 2023).

Measures

This paper presents descriptive statistics on the number of employees and Indigenous employees, the uptake of various Indigenous-focused workplace policies, and the attitudes of respondents to several questions about their workplace that may be indicative of whether or not the business maintains a workplace supportive of Indigenous employees. These responses are conditioned in Table 1 on both the size of businesses in terms of number of employees (2–19, 20–199, 200+), and whether these businesses maintained less than 3.8% Indigenous employment, or 3.8% or more. As identified in the earlier sections of this paper, Indigenous employment targets are notionally tied to the proportional Indigenous population rate, which as of 2021 was 3.8% (ABS 2023). The mean rate of Indigenous employment in the survey sample was 2.8%, lower than the representative share but higher than the 2.2% estimate from Estimate Resident Population data (ABS 2020). There are 248 businesses in the sample that maintain Indigenous employment rates of 3.8% or more, providing a large enough sample for multivariate analysis. Table 2 also presents descriptive statistics based on survey responses, this time conditioned on businesses who indicated that their retention of Indigenous staff was lower than their retention of non-Indigenous staff, the same, and those that indicated Indigenous retention was higher than that of non-Indigenous staff. Tables 1 and 2 then answer RQ1.

To answer RQ2, Table 3 presents descriptive statistics on the rate at which participants agreed with a series of attitudinal-based questions within the survey. These questions were designed through the qualitative findings of (Eva et al 2023a, Eva et al 2024a) regarding workplace characteristics that Indigenous business owners and employees saw as impactful on the Indigenous business sector’s high rates of Indigenous employment. Survey questions were designed as a series of statements, with participants asked to indicate whether they agreed, disagreed, or were neutral regarding each statement. These statements related to the extent to which cultural competency is demonstrated within the workplace, the processes towards addressing racism within the workplace, workplace characteristics that supported Indigenous employees, and commitments to corporate social responsibility. The responses to the statements presented in Table 3 are conditioned on rates of Indigenous employment and retention.

To answer RQ3, a probit regression model (Hoffman 2016a) was undertaken to determine potential correlations with Indigenous employment, and an ordered probit model (Hoffmann 2016b) to determine potential correlations with Indigenous retention rates. For the ‘employment’, probit regression is used to predict a binary (dummy) dependent variable (Table A2), signifying whether businesses maintained a proportional Indigenous employment rate of 3.8% or more (with a value of ‘1’), or below 3.8% (with a value of ‘0’). The probit regressions show the correlation of the dependent variable with other variables such as the presence of Indigenous managers, policies, geography, and business size.

We also apply the ordered probit model (Table A3) to measure Indigenous staff retention relative to the retention of other staff. This variable is constructed by assigning businesses who note Indigenous staff retention is lower in their business than for non-Indigenous staff as ‘0’, those with the same level as ‘1’, and those with higher rates of Indigenous staff retention as ‘2’. All models tested the association with the respective dependent variables with the following explanatory variables:

• • The presence of Indigenous manager/s

• • Indigenous workplace policies (i.e. inclusion of RAPs, Cultural Competency Training and celebration of NAIDOC and Reconciliation Week)

• • The size of businesses (i.e. no. of employees)

• • Descriptive variables (Profit Status, Location)

The explanatory variables were also constructed as dummy variables. Policy variables were included within the regression models individually but could not demonstrate statistical significance. As such, the policy variables were bundled into a single binary variable combining businesses who have:

• • a RAP,

• • delivered cultural competency training, and

• • who celebrate NAIDOC/Reconciliation Weeks.

as equal to 1, and businesses without all 3 of these in place as equal to 0.

The Indigenous employment variable utilised in the probit model was constructed so that it does not include Indigenous employees in management positions as employees, to avoid conflation with the explanatory variable of Indigenous manager/s. This then excluded n = 19 businesses in which all of their Indigenous employees also occupy management positions. To answer RQ3, Tables 4 and 5 are generated using the regression models’ outputs (viewable in the Appendix, Tables A2 and A3, respectively). Tables 4, 5, and 6 produce estimates of the probabilities of businesses maintaining 3.8% Indigenous employment and relative Indigenous retention rates. These are conditioned on the presence of Indigenous management, whether businesses had a bundle of policies, and the size of businesses. Logit regression models were also undertaken for both dependent variables and confirmed the associations found in the probit models. The attitudinal variables that are presented in Table 2 to answer RQ2 were also transformed through multi-factor analysis to test their potential significance in regression analyses. These were not found to be significant and were excluded from the models.

Ethics

Ethics approval was granted to undertake the survey in December 2022 by the Australian National University’s HREC. Survey participation was anonymous. The survey was part of a larger research project funded by the National Indigenous Australians Agency, receiving stakeholder support from Supply Nation and Indigenous Business Australia. Processes and guidelines relevant to the research outlined by AIATSIS (2020) and the NHMRC (2018a, 2018b) were followed. The authors of this article consist of non-Indigenous and Indigenous academics and practitioners, who work in areas of Indigenous business, Indigenous labour economics, Indigenous entrepreneurship, and Indigenous employment disciplines. The authors perceive no conflicts of interest.

Findings

Table 1 provides select descriptive statistics from key variables drawn from the survey of non-Indigenous businesses. Table 1 is conditioned on the size of the business in terms of the number of employees (2–19, 20–199, and 200+) and whether they sit below 3.8% Indigenous employment, or at 3.8% and above Indigenous employment. Perhaps unsurprisingly, larger businesses are more likely to implement Indigenous-specific workplace practices. This may be due to several factors such as a heightened financial capacity to do so, and a heightened requirement to do so with the potential for a larger number of Indigenous people in their workforce.

Further, Table 1 shows that businesses that had 3.8% or more Indigenous employees are consistently more likely to have a RAP, run Cultural Competency Training, celebrate NAIDOC/Reconciliation Weeks, maintain funding for Indigenous employment, and have a formal Indigenous employment strategy. The table does not immediately indicate a causal relationship that the presence of these policies results in improved Indigenous employment, but indicative of an association between the presence of these workplace policies and having 3.8% or more Indigenous employment. Whilst these businesses are more likely to undertake certain policies, for the most part, this still represents a minority in each cohort, indicating limited uptake of these policies. What is most striking from Table 1 is the contrast between businesses of +/− 3.8% Indigenous employment in relation to the presence of an Indigenous person in a position of management within the business. Non-Indigenous employers with Indigenous management are much more likely to have 3.8% or more Indigenous employment than businesses without, with the starkest result in Table 1. Note that Indigenous managers are not included in the calculation of the 3.8% Indigenous employment rate. Table 1 also shows a variation in the size of the standard errors as the survey sample has been split into cohorts. For example, there are 277 small businesses with less than 3.8% Indigenous employment, likely contributing to the small range of standard errors between 0 and 2%. Conversely, there are only 35 large businesses with a 3.8% Indigenous employment rate or higher, which likely contributes to the higher range of standard errors between 6 and 8%.

Table 1. Policies and employment practices implemented by non-Indigenous businesses, conditioned on no. employees, 3.8% +/− proportional Indigenous employment, 2022

Note: 3.8% employment rate is not inclusive of Indigenous people in management positions. The questions relating to Indigenous employment strategies and funding were only asked of businesses with Indigenous employees.

The survey also provides an opportunity to understand Indigenous retention, which has rarely been explored in the literature. Survey participants who indicated they had Indigenous employees (307 of 680) were asked whether Indigenous staff had lower, higher, or the same rate of retention as their non-Indigenous colleagues. Table 2 presents a cross-tabulation of these cohorts and their uptake of various Indigenous-focused workplace policies. N = 30 businesses are excluded from the table as they were unable to estimate Indigenous staff retention.

Table 2. Policies implemented by non-Indigenous businesses, conditioned on Indigenous staff retention rates (relative to the retention of other staff), 2022

Note: This table only includes businesses with Indigenous employees, hence why the percentages of Indigenous employment are higher than reported in previous tables – there are no 0 Indigenous employee businesses influencing these totals.

Table 2 demonstrates that businesses that implement Indigenous-focused workplace policies are likely to have higher rates of Indigenous employee retention. As is the case with Table 1, there also appears to be a clear delineation between businesses with and without Indigenous people in management positions, indicating a potential relationship between Indigenous management and higher rates of Indigenous staff retention. Table 2 only includes 277 businesses in the sample and these businesses are split into 3 cohorts, and as such the standard errors are larger than in Table 1.

Table 3 presents the rate at which survey respondents agreed with a series of statements, conditioned on Indigenous employment and retention rates. These statements were designed from existing research from both Indigenous and non-Indigenous-owned businesses, relating to workplace practices hypothesised to be associated with better Indigenous employment outcomes (e.g. Brown et al 2020; Hunter et al 2021; Minderoo Foundation et al 2022). The statements primarily measure the attitudes of the survey respondents, rather than the implementation of specific policies as presented in Tables 1 and 2. Retention in Table 3 is conditioned on the businesses in the sample that indicated Indigenous employee retention was higher or the same as non-Indigenous employees (n = 203) and the rest of the sample (n = 477). The findings presented in Table 3 may also be influenced by the differences in the median number of employees in each cohort, with smaller businesses potentially less likely to facilitate the practices as described in Table 3. Table 3 demonstrates a consistency in which businesses with more positive Indigenous employment outcomes are more likely to agree with each statement. The largest divergences are seen in statements regarding career development, cultural leave, and corporate social responsibility, whereas there appears to be a smaller divergence in the statements regarding cultural competence and anti-racism procedures in the workplace. Some caution needs to be applied when interpreting Table 3, as these report on the perspectives drawn from non-Indigenous businesses rather than the perspectives of Indigenous people in non-Indigenous businesses. This means that there may well be divergence between what is the perspective of employers, and the perspective of employees. For example, Indigenous employees’ surveys have consistently cited that over 50% of Indigenous employees have recently cited experiences of racism in the workplace (Brown et al 2020; Polity Research and Consulting, 2022; Minderoo Foundation et al 2022). Meanwhile, Table 3 shows that the majority of respondents believe their businesses and staff are compliant in addressing racism in the workplace. This is potentially indicative of a misperception by non-Indigenous businesses of the reality of the Indigenous employee experience. It could also mean that efforts to address specific instances of racism do not necessarily address the underlying ‘currents’ of bias and prejudice. Nevertheless, Table 3 presents some potential workplace conditions associated with higher rates of Indigenous employment and retention.

Table 3. Perspectives on workplace relations within non-Indigenous businesses, conditioned on Indigenous staff retention and employment, 2022

This table only shows the percentages of respondents in each cohort that agreed with each statement. For each underlying construct (i.e. career development, cultural competency, racism procedures, corporate social responsibility) several questions were asked, however, only a select number are presented in this paper. The omitted statements test similar underlying constructs to those presented in Table 3 and were answered in a similar manner. Standard errors for all values are between 2% and 3%. N/A refers to respondents who did not provide a response to that particular statement.

Probit regression models demonstrate what factors are associated with the probability of maintaining Indigenous employment rates of 3.8% or higher, and higher rates of Indigenous staff retention. The probit model in Table A2 uses Indigenous employment as the dependent variable, and the ordered probit model (Table A3) uses Indigenous staff retention as the dependent variable. Each regression model uses various descriptive factors (i.e. business size, remote/regional location), workplace policies (RAP, Cultural Competency Training, NAIDOC), and the presence of Indigenous management as explanatory variables. As detailed in the method section, Indigenous management is not included in the estimation of the percentage of Indigenous employment. Note that Table A2 (probit regression on Indigenous employment levels) uses the whole sample (n = 680) in the model, whereas Table A3 (probit regression on Indigenous retention) only uses those who have Indigenous employees and answered the survey question relating to Indigenous employee retention (n = 277).

First, the models demonstrate that the size of the business has a significant but modest association with both Indigenous employment and retention. The combination of implementing a RAP, delivering Cultural Competency Training, and celebrating NAIDOC/Reconciliation events together (as opposed to businesses that implement none or only 1 or 2 of these three) demonstrate a positive and significant association with the Indigenous employment variable. But the variable is not significantly correlated with retention. Lastly, the presence of Indigenous manager/s in a business demonstrated significance and the strongest positive association with both employment and retention. Geography was unable to demonstrate significance in either model. (Tables A2 and A3 can be viewed in the appendix.)

Using the regression outputs from Tables A2 and A3, the probabilities of a business maintaining 3.8% or more Indigenous employment and maintaining relative rates of Indigenous retention can be estimated. These estimations can be conditioned on the variables that are shown to be significant in our two models, the presence of an Indigenous manager/s, the bundle of Indigenous-focused policies/practices, and the size of the business. These probability estimations are detailed in Tables 4 and 5 (Indigenous employment) and Table 6 (Indigenous retention). These tables can be interpreted as a value of 0 indicating a 0% chance of maintaining a 3.8% rate of Indigenous employment or relative rate of Indigenous retention, and a value of 1 indicating a 100% chance.

Table 4. Probability of 3.8% or more Indigenous employment, by the presence of Indigenous manager and business size

Table 4 shows that businesses of all sizes are much more probable to maintain a rate of Indigenous employment of 3.8% or higher, should the business maintain Indigenous management. Again, it must be reiterated that these models do not include Indigenous managers in the 3.8% rate of Indigenous employees. Small businesses with Indigenous managers are 60% more likely to maintain 3.8% Indigenous employment, medium-sized businesses 59% more likely, and larger businesses 50% more likely. For large businesses, Table 4 demonstrates that there is only a 6% likelihood of maintaining Indigenous employment parity should there be no Indigenous people in management positions within the business. The results provide a clear indication of the criticality of Indigenous managers to ensuring higher Indigenous employment rates, irrespective of firm size.

Table 5. Probability of 3.8% or more Indigenous employment, by the presence of Indigenous policy bundle and Indigenous management, conditioned on business size

Table 5 produces probability estimations for businesses to maintain Indigenous employment parity. Table 5 displays the conditional significance of having in place the policy bundle and Indigenous managers. It does so by conditioning on the size of the business, and whether they maintain a bundle of Indigenous policies and Indigenous management. Table 5 provides a clear depiction of the increasing probability for a business to maintain Indigenous employment parity with the implementation of a bundle of Indigenous policies and Indigenous management. It reveals that implementing the policy bundle and having Indigenous managers increases the probability of achieving 3.8% or higher Indigenous employment by between 64–71 percentage points, compared with those businesses who did not engage in either. Note that Table 5 reveals the strongest positive marginal effect is having Indigenous managers, increasing the probability of achieving 3.8% or higher Indigenous employment by between 48–60 percentage points on its own. The analysis demonstrates the strongest association with the likelihood of maintaining Indigenous employment parity is the presence of Indigenous managers, but that the implementation of a bundle of policies further increases this likelihood. As such, the result reaffirms the criticality of having Indigenous managers.

As business size and the presence of Indigenous manager/s were the only variables to maintain a positive and statistically significant association with higher retention (Table A3), Table 6 only includes these variables. Table 6 demonstrates less divergent probabilities between businesses with and without Indigenous management, however the results are still important. Similarly, businesses are between 11–16% less likely to maintain poor Indigenous staff retention and 3–8% more likely to maintain high rates of Indigenous staff retention (Table 6), should the business have Indigenous management. Ultimately, this underscores the significant association between Indigenous manager/s within a business and enhanced Indigenous employment and retention rates. Moderated on the size of the businesses, businesses with Indigenous management are between 4% and 12% more likely to maintain equitable Indigenous and non-Indigenous staff retention, and between 3% and 8% higher rates of Indigenous staff retention than non-Indigenous staff retention. Perhaps most revealingly, businesses with Indigenous management are between 11% and 16% less likely to have poor Indigenous staff retention outcomes. Ultimately, the results demonstrate a clear association between Indigenous management and enhanced Indigenous staff retention.

Table 6. Probability of relative retention rates, by presence of Indigenous manager and business size

Discussion

The main finding of this paper is that the clearest and most consistent variable significantly correlated with high rates of Indigenous employment and retention is the presence of Indigenous management within a business. The size of businesses moderates the likelihood of maintaining Indigenous employment parity and enhanced Indigenous staff retention. Indigenous-focused workplace policies and practices are more prevalent in businesses with a 3.8% rate of Indigenous employment but were only able to demonstrate a significant association with Indigenous employment when implemented in tandem.

The importance of having Indigenous managers in a non-Indigenous business should not be understated. Previous literature demonstrates the unique leadership and management styles that Indigenous peoples may add to non-Indigenous businesses, and the positive impact that this has on Indigenous employees (Evans and Williamson 2017; Ryan and Evans 2020; Evans et al 2021; Eva et al 2024a). Whilst the implementation of individual Indigenous-focused workplace policies may aim to enhance Indigenous employment and retention, the manner in which they are implemented is likely heavily moderated by the motivations and commitments of the business (Evans and Williamson 2017). Arguably, a vital demonstration that a business is not just interested in meeting targets associated with Indigenous employment or corporate social responsibility, is the hiring of Indigenous peoples within senior decision-making roles in the business. This potentially demonstrates that it values and trusts Indigenous people to make decisions from leadership positions. Further, it may demonstrate a willingness to let the organisation be changed through the presence of Indigenous leaders, who can help the business shape the direction of their contribution.

Tertiary-qualified Indigenous people are in high demand across the Australian economy, as illustrated in the 2021 Census by their higher employment rates than non-Indigenous people with the same tertiary qualifications. As such, there is a highly competitive market for the talent pool, although traditional education pathways to business leadership are not always attractive to Indigenous students (Foley 2010); There is optimism however that tailored Indigenous-led programmes are changing this dynamic (e.g. the MURRA programme at the University of Melbourne and the Master of Indigenous Business Leadership at Monash University). Some businesses similarly attempt to develop existing Indigenous staff through to leadership positions (e.g. Commonwealth Bank 2023), which may be an avenue for other businesses to follow.

The findings reveal that regardless of the size, businesses with an Indigenous employment rate of 3.8% or higher may be more likely to have a RAP, undertake cultural competency training, celebrate NAIDOC/Reconciliation Weeks, maintain funding for Indigenous employment and have an Indigenous employment strategy, than businesses with an Indigenous employment rate below 3.8%. Whilst these were unable to demonstrate a significant association with Indigenous employment within the regression models when included individually, when delivering each of the three key policies (i.e. putting in place a RAP, celebrating NAIDOC/Reconciliation Week, and undertaking cultural competency training), the regressions were able to demonstrate that the combination of such policies had a higher probability of achieving Indigenous employment parity. These findings are congruent with previous findings from Evans et al (2021), who demonstrated that the bundling of policies/practices maintained a stronger association with stronger Indigenous employment outcomes. These findings also reiterate the need for more meaningful approaches from organisations, beyond the isolated and surface level. In general, RAPs, cultural competency training, and celebrating NAIDOC/Reconciliation Weeks do not have a specific focus on Indigenous recruitment or retention. However, the commitment to multiple actions within an organisation may be emblematic of a significant investment by the organisation to improve its Indigenous employment outcomes. The findings of this study should not be interpreted to undermine the utility of various Indigenous-focused workplace policies and practices; Indigenous employment and retention are only some of the multiple aims of these policies and practices. Moreover, this study was unable to refine its analysis based on the extent of time in which businesses have maintained these policies, or for example, the level of RAP businesses had. By demonstrating the association between a bundle of policies and an increased likelihood of maintaining Indigenous employment parity, this may be seen as a proxy for an enhanced commitment to Indigenous initiatives within the business over time. Therefore, longitudinal studies might better be able to follow the impact of specific policies over time, whereas this study provides a cross-sectional analysis.

In relation to the retention of Indigenous employees, we identify those businesses with higher rates of Indigenous retention also had a higher likelihood of having a RAP, undertake cultural competency training, celebrate NAIDOC/Reconciliation Weeks, maintain funding for Indigenous employment, and have an Indigenous employment strategy. Econometric analysis reveals that these variables were not statistically significant in explaining Indigenous employee retention (Table A3). Whilst the findings were more modest for retention than employment, again the presence of Indigenous manager/s is associated with a higher probability of maintaining equitable/higher rates of Indigenous staff retention and a lower probability of maintaining poor Indigenous staff retention. However, the cross-sectional analysis undertaken in this paper could be built upon by a longitudinal study that can more accurately measure Indigenous staff retention and its association with various factors.

Attitudinal variables associated with positive commitments to corporate social responsibility, offering cultural leave, and career development opportunities, were more prevalent in organisations that had higher Indigenous employment and retention. However, these variables are not statistically significant explanatory factors for either higher employment or higher retention, perhaps because of the sample size and the standard errors being too large.

The mere presence of an Indigenous person in a leadership position in a business is not the sole driver of higher Indigenous employment and retention in a business more broadly, but it appears to be the singularly most crucial factor. Whilst it may be indicative of prospective Indigenous employees that the business is welcoming and supportive of Indigenous people and allows for career development, it is the impact of this representation that is more influential than the representation itself. The broader incorporation of Indigenous values, perspectives, and knowledge within an organisation and its everyday activities is more likely to support Indigenous employment and retention than isolated policies driven by non-Indigenous values, perspectives, and knowledge (Eva et al 2024a). This is not to say that it must be the unpaid and under-recognised labour of senior Indigenous staff within non-Indigenous organisations to remedy the blind spots and harmful practices of non-Indigenous-led and designed organisations (Menzel 2022). However, as evidenced in this paper, there is a divergence between non-Indigenous perception and Indigenous reality when it comes to the workplace. This may then be the crucial piece missing for the vast majority of Australian institutions that are non-Indigenous-owned, designed, and led. An over-emphasised focus on siloed and piecemeal approaches to Indigenous employment and retention, no matter how good-willed they may be, may limit progress toward genuinely enhancing Indigenous employment and retention rates.

Conclusion

This paper has presented a unique analysis of a sample of non-Indigenous-owned Australian businesses, regarding the associated characteristics within these businesses that may influence Indigenous employment and retention parity. This paper demonstrates that businesses that maintain Indigenous-focused workplace policies and practices are more likely to have Indigenous employment and retention parity. However, the presence of Indigenous management in a business is the clearest factor associated with a higher probability of a business maintaining Indigenous employment parity and enhanced Indigenous staff retention. This underlines the crucial need for Australian institutions to incorporate Indigenous perspectives into their hierarchical structures, ensuring they are in the business of Indigenous employment.

Limitations

A key limitation of the paper is that this is survey data of businesses that may not keep detailed records on certain variables captured in the survey. The survey was designed with this in mind; however, there is still a risk respondents were making broad estimations, i.e. regarding Indigenous staff retention. The analysis demonstrates a strong association between Indigenous management, and Indigenous employment and retention. However, more detailed studies should identify specifically the role that Indigenous managers play in potentially helping to facilitate these outcomes. A longitudinal study of businesses may be able to reveal associations between the implementation and development of select workplace policies and Indigenous employment over time.