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How Will The 457 Visa Changes Impact IT Workers

Posted almost 2 years ago by Luke Singleton

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On the 17th April, 2017, Prime Minister Malcolm Turnbull announced sweeping changes to the Australian skilled migration program. These changes, which came into immediate effect, have reduced the number of roles eligible for sponsorship under the 457 visa program that allows foreign workers to legally work in Australia.

How does this affect the Australian IT industry
According to the Australian Department of Immigration, of the roughly 45,000 skilled migration visas issued each year, more than 10,000 of these are directly associated with the IT industry. The IT industry makes up the largest portion of any industry represented in the program and therefore stands to become the most affected by the changes. These changes will not only have significant impacts on those looking to work in IT roles in Australia but are also likely to result in some big impacts to Australian tech companies.

What exactly are the changes?

  • The list of roles eligible for sponsorship under the 457 program has been reduced by more than 200 occupations. 

  • The changes won’t affect existing 457 visa holders whose terms of residency are already protected under the changes.

  •  From 1st July 2017, for companies seeking to sponsor 457 visa holders, there will be increased obligations for contributions to a training fund for Australians, as well as more stringent English language and background check requirements.

  • In March 2018, the current 457 program will be replaced with the Temporary Skilled Services Visa (TSS) based on the Medium and Long-term Strategic Skills List (MLSSL).  

  • From March 2018, the new Short Term Skilled Visa will only be a two-year visa, will only be able to be renewed once, and importantly will not include a path to  permanent residency. 

  • From March 2018, the new Medium to Long Term Skilled Visa will be a four-year visa, can be renewed, and will have a path to Permanent Residency.

  • Tightening of conditions for applying for a Skilled Migration visa, including a minimum of two years related work experience and additional employer requirements to pay the Australian market rate salary. 

What type of roles does this affect

Among the job titles removed entirely from the list of eligible skilled occupations under the scheme are:

  • ICT Support and Test Engineer

  • ICT Support Technician

  • Telecommunications Technician. 

Employers and job seekers will no longer be able to sponsor visas for these roles

IT roles that will now appear on the Short Term Skilled Occupation List and no longer have a pathway to permanent residency include:

  • Chief Information Officer

  • ICT Project Manager

  • ICT Managers and various other ICT occupations.

People that qualify for roles under the Medium and Long Term Strategic Skills List (MLTSSL) will now have a longer pathway to permanent residency, and may face additional requirements before becoming eligible for permanent residency.

Will the changes really have a huge impact on Australian IT
Some aspects of the changes have not necessarily been accurately reported in the media. Luke Singleton, Director of Spark Recruitment, believes that, “The 457 visa changes have created a lot of media hype and confusion. While some of the changes are immediate and obvious, there are also a lot of opinions being published as fact. The reality of the situation is there is a lot of uncertainty still and we will only know the full impact of the changes in the coming months as test cases start to work through the system.”

Another important point that has rarely been mentioned in media reporting of the issue is that the occupation list for the job roles affected is not static, a point which Singleton feels is vital to the discussion. “Very little of the reporting is focused on the fact that the government have said they will be reviewing both lists of occupations on a six-monthly basis. This will create opportunity for the IT industry to mobilise its lobby groups to ensure we can still attract the right talent to Australia. It will also create more risk and uncertainty for employers and IT professionals as the goal posts may be constantly shifting. But if the IT industry is serious about driving its talent agenda, industry leaders will need to start these conversations now.”

Opinions from across the industry
These changes will no doubt affect different types of IT companies differently, depending on their market and resourcing needs. But in some cases, especially within larger, more established organisations, there can be feelings that the talent they need for some roles simply doesn’t exist yet in Australia. 

Mike Cannon-Brookes, co-founder of one of Australia’s most successful technology companies, Atlassian, has gone on the record to say that technology companies would hire locally if they could. Soon after the announced changes, Cannon-Brookes indicated to The Australian that, “As a nation we aren’t generating the volume of talent, at a quick enough pace, to fill the needs our country has as a developing tech innovator. If we could walk down the street and fill all of our open roles with local people, we would. But we can’t. We have loads of great talent in Australia but we don’t have people with 20 years of tech experience who can teach and mentor our next generation.’’

The Australian Computer Society (ACS) has welcomed the changes. ACS President Anthony Wong said, “Strengthening labour market testing was one of ACS’ key recommendations in our May 2014 submission to the Independent Review of Integrity in the subclass 457 programme. We are pleased to see this is a key focus in the Prime Minister’s announcement.”

“While labour market testing and training benchmarks have previously existed in the 457 visa framework, we see tightened criteria under a TSS programme as an important signal that the Turnbull Government understands the need to treat Australia’s human capital as a strategic asset as we expedite our transition to the digital and knowledge-based economies,” Wong said.

Robert Hudson, President of the Information Technology Professionals Association (ITPA), also argued that while they fully support a skilled visa program if companies are genuinely unable to find suitable local candidates, they are absolutely opposed to the use of 457 visas being used to undercut local market rates, or using foreign workers to fulfil entry level roles.

Hudson goes on to argue that a large increase in 457 visas related to IT Support roles has resulted in fierce competition for entry level IT roles between graduates and experienced overseas labour. As a result, professional university enrolments in IT are down by up to 50%, and there is no longer a single stand-alone IT faculty left in Australia. The suggested long term impact is that Australia might rely on imported skills instead of fostering local IT skills, and as such we might no longer be able to remain globally competitive in the IT sector. 

We also spoke with Cherie Wright, Special Counsel and Accredited Immigration Law Specialist at Fragomen, who has extensive understanding and experience working within immigration law and represents many clients within the IT industry. She has indicated that the changes may affect some visa applications currently being processed.

Cherie stated that, "The immediate impact to Australian IT employers are the changes to the eligible occupation list and the removal of eligibility for ICT Support Technicians, IT Test Engineers, Web Developers, and multimedia roles. Employers should seek informed advice, in particular regarding pending 457 visas that are currently before the Department of Immigration. The new occupation lists apply retrospectively to any undecided 457 visas as at the 19th April."

"If a 457 visa is pending for a role that is no longer eligible, then that visa application may be liable for refusal and it's extremely important that employers have professional help in effectively managing that process, especially in instances where there might be the opportunity to reclassify a 457 visa application."

"The next impact for Australian IT employers is the reduction to 20 of IT occupations that have been limited to the short-term visa list and do not have a path to permanent residency. Of those 20 IT occupations, four are subject to caveats that restrict their usage under the 457 program. Those caveats can relate to a minimum requirement of two years’ experience that may be problematic for companies that have global graduate programs, and perhaps might also impact roles such as IT Test Engineers and ICT Project Managers.

Cherie went on to add that, "In the longer term, organisations also need to be very conscious of their workforce planning. If they have particular job functions that they typically have been employing talent on sponsored 457 visas then they will need to think about how they are sourcing and engaging talent differently in the future."

How it all stacks up

The key information to take away from the issue is that the changes will affect individuals and companies differently, depending on their circumstances.

The changes are not permanent because the roles affected will be re-assessed every six months.

There is still opportunity for industry lobbying to influence which IT roles are affected.

There is broad support for the changes within universities and industry associations that feel that the IT sector has been let down by allowing so many IT roles to be filled with 457 visa holders at the expense of supporting local talent and encouraging a strong Australian IT sector.

Established IT organisations with larger resourcing requirements are likely to be most affected as they may struggle to source enough local talent to remain competitive with international IT organisations that can draw from larger IT sectors that have more accumulated experience.

The Way Forward

The current political stance suggests that sponsoring IT roles, particularly for entry-level positions, will become significantly more difficult in the future. It also suggests that those seeking a pathway from a skilled migration visa toward Australian permanent residency may face increased difficulties in achieving this goal.

Employers and those with 457 visa applications already being processed should immediately seek professional advice, as the changes apply retrospectively to visas that have been submitted but not yet approved.

In the short term, people should look closely at the classification of eligible roles when they are applying for 457 sponsored work visas, as those seeking employment under skilled migration visa programs may be significantly impacted.

In the longer term, it is clear that there will be impacts to IT organisations from small start-ups to already established and successful enterprises in how they approach sourcing talent. They will be forced to consider how their workforce planning may be impacted by the changes, identify where there might be talent shortages in advance, and plan ahead to mitigate those risks.

Full Department of Immigration fact sheets can be accessed here: (bit.ly/2oRnNDB) and here: (http://bit.ly/2oOqq8x)

A list of all eligible occupations for sponsorship can be accessed here: (http://bit.ly/2pnfYGY)

Sources

  • ACS - http://bit.ly/2ozCfEjITPA Webinar - “The impact of changes to the 457 skilled visa system in

  • Australia” https://www.youtube.com/watch?v=p9DAlVwIRbo&feature=youtu.be

  • The Australian - http://www.theaustralian.com.au/national-affairs/industrial-relations/tech-firm-plea-to-keep-457-visa-workers/news-story/2bfa7af951f91707e2cf9a9b557959fb

Suggested Reading

  • https://www.itnews.com.au/news/government-abolishes-457-visas-458653

  • https://www.itnews.com.au/news/the-34-tech-jobs-still-available-for-skilled-migration-458666

  • https://www.crn.com.au/news/government-to-axe-457-visas-putting-strain-on-ict-skills-shortage-458675

  • http://www.smh.com.au/business/workplace-relations/how-the-457-visa-changes-are-hitting-startups-20170421-gvphxb.html

  • http://www.news.com.au/finance/work/what-you-need-to-know-about-the-457-visa-changes/news-story/3894724396a5c7f99491c961ae9b8088

  • http://www.abc.net.au/news/2017-04-19/australia-457-visas-occupations-affected/8454494

  • http://www.huffingtonpost.com.au/2017/04/19/current-457-visa-workers-left-in-limbo-by-sudden-changes_a_22045467/

  • https://more.acs.org.au/news-and-media/media-releases/media-releases/acs-welcomes-abolishment-of-457-visas

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