Skilled migration

29 April 2021

skilled migrants crucial to recovery

Space on the plane:
why we support skilled migrants' entry to the country

Business NSW members have always supported Australians into work. A key part of this is making sure Australians of all ages have the skills and support they need.  That’s why Business NSW has strongly advocated to Governments for increases in funding to the VET sector, more support for school-based apprenticeships and traineeships, increased focus on enterprise skills in schools and more broadly available careers advice.  

To their credit, both the Australian and NSW Government have heeded these calls and introduced significant policy initiatives to support our local population into jobs. In NSW we have witnessed the introduction of 100,000 fee-free apprenticeships and traineeships, the NSW Education Pathways Pilot and the introduction of Careers NSW.  

The Australian Government has invested more than $1 billion into the Boosting Apprentice Commencements (BAC) and Supporting Apprentice and Trainee (SAT) subsidies. The Heads of Agreement for Skills Reform which is due to start in August promises to increase real investment in VET, while undertaking agreed reforms needed to ensure this investment will improve outcomes for Australians and the economy. 

But these efforts will take time before we see an increased supply of qualified tradespeople. Apprenticeships and traineeships generally last three to four years, so we won’t start to see more fully qualified people joining the workforce until at least 2023.  

It’s got to the stage where I’m desperate to employ anybody with the right skills and the right attitude, whether they’re a skilled migrant or an Australian citizen.

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Quite astonishingly given the unemployment queues just a year ago, Australia has a skills shortage.  In fact, businesses tell us skills shortages not only persist they are growing as our post-COVID recovery gets stronger.  

Business Conditions 2021

46 per cent of businesses reported to our March 2021 Business Conditions Survey that they were currently experiencing a skills shortage – an increase of over six per cent since September 2020. Labour force vacancy rates are now at their highest since 2008 with almost 240,000 vacancies across Australia. Job advertisements increased by 19 per cent in March 2021 alone.  

These shortages are likely to worsen before they improve given the significant investments in infrastructure over the next few years. Even with the increasing number of apprentices, it will be questionable whether skilled labour will be able to keep up with demand.  

Confusingly, both underemployment and unemployment rates are falling but remain high with unemployment still at 5.8 per cent, indicating a mismatch between the skills in the labour force and the skills businesses need.  

In the meantime, the borders remain effectively closed to skilled migrants amplifying skills shortages in many industries. This has become such an issue that the Australian Parliament’s Joint Standing Committee on Migration (JSCOM) is currently conducting an inquiry into Australia’s skilled migration program.  

Whilst every business we speak to is committed to recruiting and training local staff, there just never seem to be enough suitable applicants to meet their skills needs. Nothing tells the story better than real examples from Business NSW members.   

CASE STUDY 1

Controlling Power is a switchboard manufacturer on Sydney’s Northern Beaches which manufactures a variety of switchboards from small control panels and distribution boards to large main switchboards and generator boards.

It employs around 13 people including Mechanical Engineering Draftspeople, Sales Engineers, and Mechanical Engineers (Assembly). Sales Engineers have a particularly important role in developing cost estimates as product design is an integral part of the company’s quotation process.

The training pathway into these roles is usually an electrical apprenticeship followed by a Certificate IV in Engineering, all of which takes at least four years to complete. The company has previously trained apprentices but its inability to recruit qualified tradespeople limits its capacity to provide the supervision required.

It has been looking for at least three more members of staff across these roles for more than 12 months with no success. Its Managing Director, Scott Emerson, believes that it is due to a range of factors: "Our location is probably one factor. Another is just the shortage of qualified people...

We get a lot of applicants without the relevant qualifications.

The inability to fill these vacancies has resulted in huge levels of stress, long hours, and larger workloads for Controlling Power’s current staff. “I’ve been asking a lot of my existing staff,” Mr Emerson said. “I’m very supportive of leaving a skilled workforce behind. We’ve got an obligation to leave things better and I’ve tried to recruit locally, but they just aren’t available. It’s got to the stage where I’m desperate to employ anybody with the right skills and the right attitude, whether they’re a skilled migrant or an Australian citizen.”

We always try to hire Australians first. Even to the point if someone doesn’t have the full skill-set, we will interview and trial them and try to upskill them before using skilled migration. But I’ve had an advert running for 8 months straight and not a single Australian has applied for the job.

skills shortage, the fly in the ointment

From manufacturing to construction and the services sector, skills shortages threaten to hold back the recovery that business and the community are relying on. 

Shortages in hospitality, health and agriculture are well known, but there are many small businesses in other industry sectors also affected. The construction industry, for example, has had a number of occupations included on National Skills Needs List for many years.  

Without a more flexible and cutting-edge approach to the delivery of vocational education, we might not be able to train the volume of people needed to meet our skills needs. 

Skilled migration provides benefits that are felt beyond business. It helps to counteract an ageing population as well as making us economically stronger. The Productivity Commission estimates that Gross Domestic Product (GDP) per person would be around seven per cent higher in 2060 under a migration business as usual case compared to a zero Net Overseas Migration (NOM) scenario.   

Australia’s economy has performed remarkably well for the last three decades but none of this would have been possible without a targeted skilled migration programme.  Starting in a safe targeted way, we need turn the skills tap back on for business. 

As the COVID-19 vaccine is rolled out worldwide, more and more countries are starting to reopen their international borders, and with that will come increased demand for skills. Where Australia is unable to be self-reliant, we must start to slowly and safely provide opportunities for skilled migrants to return to Australia.  

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Case study 2

Yarrawonga Manufactured Housing (Yarra Housing) is a construction company based in Mulwala in the Riverina district of New South Wales. It currently employs around 36 people including 16 qualified tradespeople and six apprentices. Its workforce includes a range of construction trades and has a number of vacancies for qualified Carpenters, Building Estimators, Draftspersons and Steel Fabricators.

Operations Manager, Troy Maxted, believes that the Government grants, such as the First Home Buyers Grant and HomeBuilder Grant have increased demand to such a degree that businesses across the construction industry are desperate to keep staff. “We’re not a huge town but we’ve got a lot of builders here so there’s a lot of competition for qualified people.”

Yarra Housing has advertised extensively through a range of recruitment media but with little success. “We’ve found people that won’t relocate or people that are willing to move but can’t get a rental. We recruited a building estimator earlier this year but it’s already taken them four months to find somewhere to live.”

Mr Maxted says that the job vacancies mean that Yarra Housing is struggling to keep up with demand, “We’ve lost work due to not being able to commit to the timelines that clients want. Other clients that know us well, we’ve had to apologise that their timelines have been pushed out due to labour and material shortages. Some are willing to wait – others aren’t.” 

This shortage of qualified trades people is also impacting Yarra Housing’s ability to train the next generation of local tradespeople.

Without more qualified tradespeople, we’ve reached our capacity to supervise any more apprentices.

“We’ve tried recruiting and training locally but if we could find migrants with the right skills, we’d take them. At the end of the day, it’s down to the skills people have got.” Mr Maxted said.

My working conditions are good: my staff don’t work weekends, they are paid well above the award rate and I’m located right in the heart of Sydney CBD.  If I’m having this much trouble recruiting, it must be desperate in other places.

The way forward

As the COVID-19 vaccine is rolled out worldwide, more and more countries are starting to reopen their international borders, and with that will come increased demand for skills. Where Australia is unable to be self-reliant, we must start to slowly and safely provide opportunities for skilled migrants to return to Australia.  

These are just a handful of instances where the lack of skilled migrants is hindering Australia’s recovery. The JSCOM has heard of many more such stories during its inquiry. It’s time to start ensuring that qualified people are able to move to Australia and address the many varied skilled needs of our small businesses. 

There are instances where state governments are acting on these issues, such as the NSW Government’s recent announcement that it will subsidise half the cost of mandatory quarantine for overseas agricultural workers entering the country. This is promising and to be commended. 

But even if you are able to obtain a travel exemption as a person with critical skills, the real challenge is the lack of places on flights and in quarantine that prevent Seasonal Workers from entering the country in the first place.   

...There’s just no space on the plane. 

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Flight and quarantine caps are governed through a complex set of arrangements between the Australian and state and territory governments. Currently, the number of people allowed to enter Australia each day is based on the quarantine capacity set by the states and territories.  

These arrangements must operate in accordance with right to return laws, particularly Article 13 of the Universal Declaration of Human Rights and Article 12 of the International Covenant on Civil and Political Rights which state that everyone has the right to return to their own country and no one shall be arbitrarily deprived of the right to enter their own country.; 

Whilst Australian citizens must get priority, Business NSW is calling on the Australian Government to develop concrete solutions with all the states and territories to support the entry of skilled migrants into Australia. 

We’ve lost work due to not being able to commit to the timelines that clients want. We’ve had to apologise that their timelines have been pushed out due to labour and material shortages. Some are willing to wait – others aren’t.

Case study 3

The Barberhood is a men's grooming store and premium barbershop at two locations in Sydney CBD. It was named by GQ as Australia's best barbershop and employs around 19 barbers / hairdressers.

The Barberhood has been trading since 2015 and has experienced significant difficulties in finding qualified barbers since it first opened.

Renee Baltov, Owner of The Barberhood, says that the business has always tried to hire locally. “We always try to hire Australians first. Even to the point if someone doesn’t have the full skill-set, we will interview and trial them and try to upskill them before using skilled migration. But I’ve had an advert running for 8 months straight and not a single Australian has applied for the job.”

The Barberhood has invested heavily in training Australians but there’s challenges associated with it, “We’ve usually got one apprentice in each store. It’s very costly to take out a chair for an apprentice to learn on and have a senior barber train them – probably around $10,000 a week.”

Ms Baltov recognises that apprenticeships might not be the solution to the hairdresser shortage, “No matter how many apprentices, we still don’t have enough qualified hairdressers to cover the gap. As a result, apprentices often get poached by other barbers either during their apprenticeship or soon after they complete because there’s so much competition for workers.”

Consequently, the business has been forced to sponsor migrant workers to keep its doors open, although none from overseas since the start of the pandemic. “I’m considering opening another store but I’m not comfortable that I’d be able to staff it, especially without skilled migration.”

This is holding me back from creating jobs. If I’m not able to take on migrant workers, I’m not able to create jobs for Australians either.

“My working conditions are good: my staff don’t work weekends, they are paid well above the award rate and I’m located right in the heart of Sydney CBD. If I’m having this much trouble recruiting, it must be desperate in other places,” said Ms Baltov.

 

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Without migrant labour, I’m not sure where we’re going to go. It really concerns me if skilled migration is going to be stopped for much longer.

This could include options such as:  

  1. Establishing dedicated airports and quarantine arrangements for returning Australians from low risk countries (or for those who have already been vaccinated) freeing up space in major quarantine hubs such as Sydney and Melbourne. This could see an increase in cap numbers which might accommodate skilled migrants and would have the added benefit of reducing the risk of transmission between people from different risk countries in hotel quarantine.   
  2. Governments working with businesses or groups of businesses willing to privately fund charter flights and quarantine arrangements for skilled migrants, to increase capacity without affecting existing caps. Such arrangements could be similar to those negotiated with Tennis Australia for this year’s Australian Open.  
  3. Developing more quarantine free bubbles with low risk countries similar to arrangements developed with New Zealand.  

 

It has been more than six months since workforce issues were first raised following the critical shortage of agricultural workers in spring 2020.

These shortages are now being felt in other industry sectors. As our unemployment rate falls further, it is time to make sure there is space on the plane for the skills we are unable to supply ourselves, or we all stand to lose. 

Please contact Tim Burt, policy@businessnsw.com for feedback or queries regarding skilled migrant workers. 

Case study 4

Viewco is a windows and doors manufacturer based in Wagga Wagga. It employs around 40 people – most of whom are qualified joiners or glazers. Viewco also employs five apprentices and is currently sponsoring one overseas migrant on a Temporary Skills Shortage visa.  

Ryan Knight, Managing Director at Viewco says that they could take on at least two more qualified tradespeople,

They’re very hard to find. If we do find someone, they’re coming from another business so it’s costing someone else.

“We are doing our bit with apprenticeships, but we’ve had to use migration for 10 years to ensure we have the right workforce mix.”

Mr Knight recognises that there is a lot of competition for staff, particularly in regional areas, with unemployment very low and lots of options for young people. Mr Knight says “There’s only so many people here and we’re competing against lots of other industries. It’s hard to get city kids out to the country.”

Viewco says that it will continue to take on apprentices but has historically had difficulty in filling apprenticeship positions. “It’s always been difficult to get apprentices. When we started to come out of COVID, it was one of the better times going to market to find apprentices. But it will be interesting whether it is difficult going forward.”

Overall, Mr Knight recognises that Australian citizens must have priority in returning to Australia but there must be scope for skilled migration. “Of course the priority is getting Australians back first, but going forward we need to consider helping migrants get a vaccine passport or come through quarantine as they’re going to improve our overall productivity.”

“Without migrant labour, I’m not sure where we’re going to go. It really concerns me if skilled migration is going to be stopped for much longer,” said Mr Knight.

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