The 457 visa balancing act

The Labor government's move to single out ICT firms for ‘rorting’ the 457 visa system may have been designed to please the unions. But there is a very real need for an informed debate - one that harmonises the issue of skills gap with protecting Australian jobs.

The Labor government's move to single out ICT firms for ‘rorting’ the 457 visa system at the expense of Australian professionals may have been a stunt designed to appease the unions, and burnish its electoral hopes, but there is a very real need for an informed debate on the use of 457 visas. 

A Coalition win at the federal election should quell some of the discontent from big business, incensed by the introduction of changes to the sponsorship process and the higher application fees. However, an incoming Abbott government will arguably still need to exert substantial effort to meet the existing skills shortage in the ICT space, and also ensure that foreign talent doesn't push Australian ICT workers out of the picture.

That requires clear policy not empty rhetoric and achieving this balancing act won’t be easy, especially when political expediency often ends up obscuring accuracy.

Skills and Training Minister Brendan O'Connor said in March that 457 visas had been abused by businesses “more than 10,000 times” – a claim that was later disproven by the immigration department, which revealed that only one in 200 companies had been found misusing the scheme in the last financial year.

To add further fuel to the debate, Labor has announced a substantial price hike which will see the application fee for a single visa application more than double to $1035. For a family of four applying, that means the cost will jump up to a whopping $5050 compared with $455 in June.

Critics of 457 visas argue that businesses are using sponsored workers for ‘cheap labour’ – a bizarre argument when you consider that, by law, businesses are required to pay the sponsored worker at the local rate.

Big business and industry bodies say that 457 visa arrangements are being used legitimately by the ICT sector to meet a genuine gap that currently exists between the declining number of skilled local IT workers and the rising demand for jobs in the sector. This sentiment is understandable but finding an equitable solution requires questioning the premise which lies at the core of the issue.

Just how bad is the ICT skills shortage in this country and just where are the deficiencies that are prompting businesses to look outside our borders?

Rising ICT demand and shrinking talent pool   

While ICT visas account for only 7 per cent of all 457 visas in the country, the number of sponsored workers has risen from 5327 in 2009 to 9271 in 2011-12.

But according to Dr Nick Tate, the president of the Australian Computer Society, this growth in 457 Visa usage is in line with the overall growth of the Australian digital economy.  

“The demand for ICT is increasing at a rate higher than we can produce domestic graduates or people with the right sets of skills," he says.

"A hundred thousand jobs were created in IT in the last 10 years but graduates more than halved from 10,000 a year to 4500."

The recent report by the Australian Workforce and Productivity Agency notes an alarming ICT skills shortage, and the Australian government has acknowledged this deficiency by listing professions within the sector on the skilled occupation shortage list.

In an attempt to increase the ICT graduate count, the government rolled out a $6.5 million dollar Digital Careers educational initiative halfway through this year, designed to encourage school students from years five to 10 to adopt an ICT career path.

But for an industry that makes up 10 per cent of our national GDP – a figure which exceeds the much-lauded mining industry – is this really enough? Where is the push by the government to upskill our existing ICT workforce or offer incentivised programs for local businesses to take on the responsibility?

Recruiters such as Clarius report that demand for ICT is very specific and that many applicants, while excellent candidates in themselves, do not tick the exact boxes employers are looking for in ICT skills.

Tracking the hit points

According to the Australian Information Industry Association, there is a specific local shortfall in software engineering talent and skills relating to health informatic skills (and Big Data generally).

In its ICT Skills and Training Development paper the AIIA also highlighted a shortage of local candidates within the cloud computing, mobile application development, information management and business analytics areas.

In the case of Big Data, Gartner predicts some 4.4 million IT jobs will be created globally by 2015 to support growth in Big Data analytics, with only a third of these able to be filled.

AGIMO recently highlighted in its Big Data issues paper that the “major concern for Australia, and one which will be exacerbated if not addressed, is our ability to meet this demand given we have little if any experience in Big Data projects and tertiary studies in the area are already lagging".

Recruitment companies such as the Managing Director of Ambition, Andrew Cross, echoed a similar sentiment,

“My clients always prefer to look for local market experience first and local market skills first. When you consider the time and costs involved in sponsoring a worker, not to mention the lack of local market knowledge and experience, it is a substantial risk on the employer and it’s not a decision that is made on a whim. Particularly in a post-GFC environment, employers are very risk conscious. We want as much control as we can, and control comes with localised labour with a background that we can actually check.

“But if the requisite skills cannot be found here, which is increasingly becoming the case for product specific roles that are still relatively new – such as mobile application development – access to the sponsorship vehicle becomes critical," says Cross.

A political football

Dr Tate said that the rapidly changing nature of ICT means that there are skills gaps within the domestic workforce.

“Two messages come out of this: employers need to be supported in offering training to employees and candidates alike, and that ICT candidates, more than any other profession, need to be supported in accessing training and continuous professional development,” Dr Tate says. 

What’s concerning for Australia is that investment in education by the Australian ICT industry already lags behind the market average, and falls well behind spending on software.

Even more concerning is that IDC forecasts our training expenditure will continue to decline into 2015, while the demand for ICT skills will continue to grow. A boost in training and education investment is clearly needed within the ICT sector.

The 457 visa policy has turned into a short-sighted political football, creating an unnecessary distraction from the real issue.

Instead of forcing businesses into a corner with unwarranted restrictions on 457 visa policy, why not put the focus on the systemic changes to ICT education and skills development that is so clearly needed?