457 visas: are they really addressing skills shortages?

Dr Chris F Wright (image courtesy of the University of Sydney)

The preliminary analysis of a May-June 2012 survey, and subsequent report, commissioned by the Australian Department of Immigration around why employers use the Temporary Work (skilled) visa (subclass 457) scheme, and the impact of doing so, was the subject of a 15 October WOW seminar delivered by Research Fellow, Dr Chris F. Wright (University of Sydney). Surveying 1600 employer-sponsors of 457 visa holders from a range of industry and state representations, the Social Research Centre received a 90.3% response rate. Dr Wright has taken these results to specifically ask whether the four largest industry sponsors in 2013 – health care, hospitality, information and communication technology, and construction – are in fact recruiting skilled migrant workers to address skills shortages.

So just how do you measure a ‘skills shortage’?

“Commonly, and as Richardson defines it (2007), it is a shortfall in the supply of skilled labour relative to demand at the prevailing condition,” says Chris. “The supply, demand and prevailing conditions are all very slippery concepts however. Research from the UK’s Centre on Migration, Policy and Society at the University of Oxford reports labour demand and supply to be in fact mutually conditioning.”

The moving goal posts also led Dr Wright to further ask whether these four categories of industry employers experienced difficulties in recruiting workers from the local labour market, how the scheme was used to address job vacancies, and whether industry dynamics play a role in the responses to such questions.

“[The survey revealed] just over eighty per cent of employers within the four industries found it difficult to hire or employ workers from the local market; forty-four per cent of these found it very difficult,” highlights Chris. “Independently, sixty per cent of hospitality employer-sponsors found it very difficult to do so. Why? Well I suspect the prevailing conditions, the image of the industry – as a stepping stone and not a career path ­– and [worker] retention makes it difficult. Training may also play a role,” he adds.

skilled migrationInterestingly though, around fifteen per cent of respondents claimed that they did not have difficulty in recruiting workers.

“The use of 457 visas in the IT industry for example is a symptom of the labour problems in the industry”, Chris comments. “The pathway between the Temporary Graduate visa and subclass 457 visas started in the early 2000s and has become quite well established. There is a high link between 457 [visa holders] and higher education students, and the policy is encouraging this: they don’t have to go back to their home country and reapply like they did in previous years.”

Dr Wright also discussed findings around potential skilled migrants’ and employers’ satisfaction with the 457 visa scheme, revealing that employers were, overall, four times more likely to express satisfaction with 457 visa workers; hospitality employers were twelve times more likely to do so.

In concluding, Chris noted that across all four industries, approximately fifty-one per cent saw the scheme as advantageous for addressing skills vacancies although different industries used it for different purposes. Most employer-sponsors surveyed, however, did not use it to address shortages because of the aforementioned difficulties and a preference for domestic labour recruitment.

As Chris takes further time to analyse the data he will delve into the implications of the scheme, asking whether it is actually doing what it sets out to do – address skills shortages – and the micro-foundations of this.

Contact the Centre Manager for a copy the PowerPoint presentation from the seminar: wow@griffith.edu.au or phone 07 3735 3714.