With many Australian industries facing a skills shortage and migration levels still low after the Australian border reopening, how can employers manage their workforce planning? Our migration team explores some of the options.
Global mobility was significantly disrupted during the pandemic. Many employers delayed or suspended plans for projects, expansions and the movement of workers. Australia's international borders reopened on 21 February 2022. Six months on, international travel is moving back towards pre-pandemic levels and Australia's unemployment rate is at record low levels at under 4%.
In the face of significant labour shortages, organisations are trying to grow their businesses, or even to maintain business as usual. Different industries are being impacted in different ways, as we explore below.
Skilled migration offers one answer to this problem. We have observed a sharp uptick in skilled migration as employers increasingly turn towards Australia's migration program to help fill workforce shortages.
Industry-specific effects of skills shortage
The skills shortage is affecting many Australian industries. Here, we explore how industry is impacted and what some of the solutions might look like.
Energy and Resources
The Australian energy and resources sector has long relied on skilled migrants to supplement its domestic workforce and has been heavily impacted in recent years by pandemic travel disruptions and the reduction of specialist talent being able to enter Australia.
Whilst technological advances are being made to create efficiencies and automate repetitive work, many jobs falling within this sector still require physical labour and specialist skillsets. Businesses are having to drastically increase salary packages in attempts to attract and retain workers.
The skills shortages are also hampering growth plans across the industry as it transitions towards more sustainable solutions. Renewables and low-carbon energy alternatives are emerging, requiring particular expertise that is more developed overseas.
One of the ways the government is tackling this challenge is to offer free and fast-tracked skills assessments to assist in workers' route to permanent residency. This will help businesses attract the specialist talent required to satisfy their operational needs, retain their workforce, and continue to plan for the future.
Skills shortages are just one of many issues facing the infrastructure sector, with the collapse of several building companies hitting the headlines in recent weeks. There is a significant pipeline of public infrastructure being built or planned by all levels of government over the next decade. Important, regionally based but nationally significant, infrastructure development such as energy and telecommunications grids and transportation links, will continue to create challenges in labour shortage environments.
Public infrastructure is likely to take the biggest hit, with an insufficient amount of workers (across nearly all relevant occupations, including engineers, scientists and architects) to satisfy Australia's ambitious plans.
On top of pandemic implications, an ageing workforce is having drastic impacts on the sector. There is a need to bring in and skill up younger workers before experience is lost through retirement. The industry also relies on international skills in key areas such as rail.
Shortages in infrastructure has been an issue for Australia for many years. The Australian Bureau of Statistics has estimated that there were 39,900 job vacancies in the construction sector as at May 2022.
The Property Council of Australia has recently outlined several suggested measures to address labour shortages, with targeted migration growth sitting at the top of the list. There are calls to remove existing barriers to migration (including increasing quotas of skilled migrants) to make it easier to recruit talent from overseas.
There is a significant talent crisis in the education sector, with a particular need for more teachers in schools and early childcare in all states.
The COVID-19 pandemic placed huge pressures on teachers, which led to many leaving the sector. As enrolment in schools has increased, the shortages are only getting greater. This has led to many providers operating under waivers. There is also a call for additional reforms, such as an increased year of education, to be realised.
There have been calls on the federal government to take swift action to address the problem.
Whilst much focus has been placed on long-term solutions, migration will be key to filling present labour gaps that would otherwise take several years of training to address before domestic-based workers have the necessary experience and qualifications.
As one of Australia's largest occupational groups, the healthcare sector has been one of the hardest hit by the pandemic and is seeing unprecedented workforce shortages. Job forecasts are also pointing to significant demand for the "Four Cs" (Care, Computing, Cognitive ability and Communication).
High population growth and an ageing population has historically made it difficult for the healthcare sector to keep up with resourcing demands. Australian labour market and workforce shortages have been exacerbated by the pandemic. The pandemic led to in an increased need for workers across almost all areas of care. At the same time many healthcare providers experienced difficulties retaining staff due to the pressures faced by workers. Aged care and rural and remote services were particularly impacted.
Over the next five years, there will be a need for an additional 74,900 aged and disabled carers (up 28%) and 40,400 registered nurses (up 14%).
Solving the issue domestically is tricky and there is no quick fix. Many roles, even at entry level, require years of specialist education and training. Whilst there is age diversity across the whole sector, it is an aging industry and work will have to be done long term to make careers in healthcare appealing to younger generations. Higher wages are being offered to attract talent, including luring individuals from other sectors.
An additional issue for the industry is that demand for professionals is a global issue. However, there has been a decline in using visas to fill vacancies with offshore skilled workers and many opportunities are not currently being utilised.
The financial services industry has not escaped the nation-wide labour shortages in Australia.
Many workers are setting up their own companies and there has been a steady move into fintech organisations for several years.
Loss of existing staff is only a part of the problem. As expectations for a stronger focus on environment, social and governance factors in the financial services sector grow, the demand for new skillsets and expertise is currently outweighing supply.
Companies must address traditional ways of working and industry stereotypes to attract talent, alongside huge pay rises.
Working in Australia can be an attractive proposition for many and companies should view the migration program as a resourcing tool. Utilising Australia's migration program to bring in skilled workers could help financial services organisations to access specialist expertise in Australian emerging markets from more developed jurisdictions.
Although reports of skills shortages in the real estate market haven't been as prevalent as other industries, the real estate market is intricately connected to the infrastructure sector, with factors impacting the infrastructure sector creating knock-on effects to all players in real estate projects.
Labour shortages in the construction industry are creating spiralling labour inflation as competition heats up to attract and retain quality talent. With rising costs of materials on top of labour, the industry is seeing significant project delays, which can lead to increased purchase/rental costs for the end user, as well as affecting development, investment and financing.
As international travel to Australia remains low, professionals may be seeing lack of engagement across the market. In time, this could lead to the industry facing its own shortage crisis.
Real estate companies have been looking to outsource repetitive tasks to low-cost countries as tough competition for skilled professionals translates into salary increases and higher demand for increased employee benefits.
Skills in this industry are also highly transferrable so businesses may find themselves competing with other sectors to retain talent. Again, the migration program should be recognised by companies as a tool to attract and retain global talent.
How can employers mobilise overseas workers in a skill shortage landscape? Our team explores some of the options.
1. Take a strategic, proactive approach to workforce planning
A seamless migration pathway to Australia, with options for permanent residency, is required to attract and retain global talent. In our experience, the most successful international recruitment campaigns occur where businesses and government departments take a proactive approach and consider migration strategy and implementation before recruiting and onboarding.
Australia's visa program comprises a very large number of visa categories, each with their own eligibility requirements, costs, timing, employer obligations and associated risks. When considering the visa options for a particular employee to meet a particular role or skill shortage, it is important to think strategically about the options available, in the context of key commercial objectives. There is no one-size-fits all approach, and options that may be appropriate or available at one point in time might not be the best fit a few months later.
The six months since the border reopening on 21 February 2022 has seen an increase in visa application numbers and a corresponding increase in processing times for several visa categories. This is currently a pain point for organisations utilising the visa scheme to fill skilled labour shortages.
Thorough workforce planning is an important part of mitigating issues associated with protracted visa processing. A realistic understanding of expected processing times at an early stage in the workplace planning process is an important starting point for employers. In addition, a proactive approach to workforce planning, considering resourcing needs in the mid to longer term, will help to minimise delays in filling roles and on-boarding staff.
2. Consider flexible options to address skills shortages
The standard sponsored visa options have strict requirements regarding skills, work experience, English requirements, and the occupations available for sponsorship.
The Department of Home Affairs has developed a number of flexible options for employers who need to employ foreign workers in roles that otherwise would not be eligible for Australian visas or pathways to Australian permanent residency. In particular, Labour Agreements, including Designed Area Migration Agreements (DAMAs) and Global Talent Employer Sponsored (GTES), provide flexible, out-of-the-box solutions for employers to address skills shortages when the standard employer sponsored programs are not fit for purpose.
A Labour Agreement is a formal arrangement negotiated between an employer and the Australian Government to allow an employer to recruit skilled overseas workers where the standard visa program is not suitable.
Labour Agreements allow for flexibility in the occupation requirements, skill requirements, English requirements and salary requirements of the traditional visa program.
Designated Area Migration Agreements (DAMA)
DAMA are a type of Labour Agreement where a specific region, state or territory in Australia has negotiated an agreement with the Australian Government to provide access to overseas workers in skill shortage occupations within that area.
Employers within that area can then negotiate a labour agreement within the settings of the head agreement for the region/state/territory. This provides flexibility for regions to respond to their unique economic and labour market conditions.
Global Talent Employer Sponsored (GTES)
The GTES is a specific type of labour agreement designed to attract highly skilled migrants with cutting edge skills into niche occupations to help innovate established businesses and contribute to Australia’s developing start-up ecosystem.
The GTES is available to two types of employers.
The Established Business stream is for public companies or businesses with an annual turnover of more than $4 million who can meet the criteria to be an accredited sponsor with Home Affairs. It allows employers to sponsor highly skilled applicants where the position will result in a skills transfer to Australian workers and the salary offered will be over the Fair Work High Income Threshold ($153,600 as at 1 July 2020).
The Start-up stream is for businesses operating in a technology based or STEM related field who are endorsed by an independent start-up advisory panel. It allows employers to sponsor highly skilled applicants where the position will result in a skills transfer to Australian workers and the salary package will be at least $80,000.
3. Utilise COVID concessions
There are a range of post-COVID concessions available to some visa holders. These concessions may particularly interest employers:
Working Holiday (subclass 417) and Work and Holiday (subclass 462) visa holders
These visa holders can currently work for an employer for more than 6 months without requesting permission, despite condition 8547 which generally limits them to a 6 month work duration for any one employer. This concession is currently in place until 31 December 2022.
Student visa (subclass 500) visa holders
Student visa holders currently do not have restrictions on the number of hours they can work, despite condition 8105 which limits them to working no more than 40 hours a fortnight while their course is in session.
Australian Government Endorsed Events (COVID-19 Pandemic event) stream visa (subclass 408)
This visa stream was introduced at the start of the pandemic to provide a temporary visa pathway for temporary residents in Australia who did not have other visa options available to them and could not leave Australia. The COVID 408 visa remains in effect and continues to provide a temporary work visa option for temporary residents whose visas are expiring and who do not have other options available to them for a range of reasons.
Temporary Graduate visa (subclass 485) applicants
The requirement to nominate an occupation and obtain a skills assessment has been removed for the Graduate Work stream of the 485 visa lodged between 1 July 2022 and 30 June 2023, which opens up further temporary stays for international student graduates.
Temporary Skill Shortage (TSS) (subclass 482) visa holder
A temporary pathway to permanent residence via the Employer Nomination Scheme (subclass 186) has been added for a limited cohort of 482/457 visa holders who are otherwise not eligible and were in Australia during the pandemic.
Business employing the above visa holder cohorts need to ensure they remain up-to-date with any changes to these concessions, to ensure that they do not inadvertently breach their employer obligations under the Migration Act.