Startup Analysis

With five startups signed up so far, was the Global Talent Scheme visa pilot really a success?

Stephanie Palmer-Derrien /

visa

Hannan Tew Lawyers partner Jordan Tew. Source: Supplied.

Last week, the government’s Global Talent Scheme visa pilot ⁠— billed as the answer to the Aussie tech talent shortage ⁠— was chiselled permanently into the Department of Home Affairs’ list of work visa options, and rebranded as the Global Talent — Employee Sponsored (GTES) program.

A joint announcement from Minister for Immigration David Coleman and Minister for Industry, Science and Technology Karen Andrews said the decision followed “a successful pilot”.

That was followed by a slew of startup press largely celebrating the decision, albeit mentioning in passing the various setbacks and delays that plagued the scheme.

While anything making it easier for startups to attract talent should be welcomed, as of 18 June, only 18 companies were approved as sponsors under the scheme. And only five of these were approved under the ‘startup’ stream: Q-CTRL, WorkYard, Gilmour Space Technologies, Emesent and Baraja.

A spokesperson from the Department of Home Affairs confirmed that, as of August 4, fewer than 30 visas have been issued under the pilot scheme, although it did not disclose how many of these were issued under the startup stream.

By way of comparison, in the year ending 30 June 2018, some 34,450 temporary skilled resident visas — subclass 457 or 482 — were granted.

Interestingly, the top two jobs these visa-holders were filling were ‘developer programmer’ and ‘ICT business analyst’.

The government media release said a total of 23 businesses had been approved (the public record is due to be updated in September), but it is currently not clear which streams the additional businesses were in.

So, what does success look like here?

In the release, Coleman said the pilot “showed the GTES has strong support from industry and highlighted the economic benefits of recruiting overseas talent directly to Australian businesses”.

Perhaps this is true. Under the GTES, businesses are approved as sponsors under one of two streams: the ‘established business’ stream, for businesses that are publicly listed, or have seen annual turnover of at least $4 million for the past two years; or under the ‘startup’ stream, for businesses working in STEM, that have been endorsed by a special advisory panel.

The 13 businesses approved under the ‘established business’ stream include some of Australia’s biggest tech companies: Atlassian, Canva and SafetyCulture.

They also include the likes of Pfizer, Coles, Rio Tinto and the Queensland Department of Health. Arguably, not notable beacons of innovation.

This suggests that, while the scheme is suitable for innovative tech companies, it’s also being utilised by other corporates, and is perhaps more effective for them than it is for earlier-stage startups.

Prohibitive costs

Anecdotally, many in the startup ecosystem are supportive of the visa.

Sarah Ettershank, general manager for people and culture at Assembly Payments, tells StartupSmart that while the business hasn’t used the scheme before, “if we had a requirement to bring highly skilled talent to Australia where we couldn’t find local talent, we would consider this as an option”.

In the government release, Canva founder Melanie Perkins praises the knowledge transfer afforded by the scheme, saying the tech giant has “been able to strengthen our people’s skills in technology and innovation”.

IntelligenceBank founder Tessa Court says her startup would also consider using the scheme to ensure it has “the right skilled employees in place to meet the company’s evolving needs”.

IntelligenceBank

IntelligenceBank founder Tessa Court. Source: Supplied.

Again, Court notes the potential for existing employees to leverage the expertise of overseas talent.

“As businesses look to scale, attracting the right talent is more important than ever,” she explains.

Finally, Bridget Loudon, chief executive of Expert360, also says she expects to see more companies signing up to the scheme.

“You’d be crazy not to,” she says.

So, with influential people extolling the virtues of the scheme, why haven’t we seen more startups taking advantage of it?

Speaking to StartupSmart, Michael Biercuk, founder of quantum computing startup Q-CTRL, which was the first of the five approved startups, and has hired one employee through the scheme already, says there are two things that could put a company off.

First, while the government promises to turn applications around within two weeks — and in Biercuk’s experience has made good on that promise — for prospective employees, gathering all the documents required can take much longer.

Applicants have to provide police checks from any country they’ve ever lived in.

“These are highly-skilled people with expertise in software engineering and quantum engineering and the like,” Biercuk says.

“They, based on their experience, will have had positions in several different places around the world.”

Getting the police checks, and assembling all of the other necessary information “can take weeks or months”, he says.

The biggest impediment, however, he says, is the “outrageous cost” to startups.

Under the scheme, businesses have to pay a Skilling Australia Fund (SAF) levy, that goes towards training Australian workers. At $1,200 per year, the levy adds an additional $4,800 to the cost of hiring.

“They totally ignore the fact that training happens when foreign, highly-skilled employees join us and work alongside my Australian employees,” Biercuk says.

“It really does feel a bit more like a cash grab than anything else.”

Equally, Q-CTRL had the expertise to complete all the paperwork internally. For startups bringing in an immigration lawyer, the costs can rack up to tens of thousands of dollars.

“One doesn’t need to do that, but I think many people look at that as the de facto position.”

Jordan Tew, partner at Hannan Tew Lawyers, also tells StartupSmart he would like to see a reduction in the fees for startups.

Tew’s position has always been that the scheme didn’t offer enough benefits for startups to make it worthwhile, “particularly now that the government has smoothened out the TSS visa”.

In a piece written in February, Tew suggested removing the SAF levy for startups under the GTES, or subsidising the lodgement fees, could encourage more startups to take advantage of it.

“The economic cost of a handful of waived levy fees per startup will also be outweighed by the significant economic stimulation that the new talent brings in,” he said at the time.

This is still the case now the scheme is permanent, he says.

“We’d like to see further benefits like visa lodgement fee or levy concessions to make it more attractive.”

A square peg in a round hole

One of the benefits of the GTES is it enables startups to bypass the need for prospective employees to fit a role on the designated skills-shortage list.

It’s designed, instead, to focus on talent in emerging sectors, where sectors can’t be categorised into the existing list of occupations.

However, Tew noted in February that many startup jobs can at least loosely be attributed to a skill on the list.

“While obviously the ‘fitting a square peg into a round hole’ option is less than desirable, the department appears to accept this. It’s a common practice that already occurs due to the limitations of the ANZSCO occupations and the practical reality is that most savvy companies and immigration lawyers continue to take this approach (successfully).”

The GTES system, therefore, means the additional bureaucratic process, in becoming approved as a sponsor in the first place, without a whole lot of benefits.

Biercuk, however, suggests that while the application process wasn’t entirely smooth, going through the process was worth it.

Q-CTRL was, in fairness, the first startup to go through the process.

“What we encountered initially was not a very strong understanding of what was required to hire in these specialised roles,” Biercuk says.

Q-CTRL

Q-CTRL founder Michael Biercuk. Source: Supplied.

For example, there was something of a disconnect between how the government expected Q-CTRL to advertise positions, and how the startup typically would.

These are specialised positions, with hires often found through personal networks, he explains.

“We would advertise via our website, via social media and the like,” Biercuk explains.

“It made no sense for us to put an ad on Seek.”

While some of this took some time to iron out, eventually, the government took the startup’s suggestions on board to refine the process.

“I would certainly imagine it’s improved,” Biercuk adds.

For a business like Q-CTLR, having freedom from the skills shortage list made it much easier to get the right people in the door. This is a new industry, and it would be extremely tricky to prove someone is qualified through producing certifications.

“Only we are really capable of making that assessment,” Biercuk says.

Instead, the team was able to create a whole other set of positions “that would meet our needs, and didn’t require this squeezing of a square peg into a round hole for other existing occupations”.

The measure of success

Startup founders say one thing, legal experts say another, and the numbers, well they speak for themselves.

So, after 12 months, with just five startups on board and 30 visas issued, can we call the GTES program a success?

While Coleman called it a success in the release, at the time of publishing, he did not respond to StartupSmart’s query as to what made it so.

The Department of Home Affairs spokesperson, however, said: “There has been increasing interest in the later stages of the pilot due to growing awareness amongst industry.

“The GTES pilot has provided qualitative benefits for businesses and the Department has received positive feedback and strong support from GTES stakeholders.”

To be fair, while we don’t know exactly how many visas have been issued through the startup stream, in February this number was zero, so anything is a marked improvement on that.

Tew says he is pleased the government has opted to continue the scheme, “because it shows that they’re trying to improve immigration policies to support innovation in Australia”.

He would, however, like to see some changes to the startup stream of the visa offering, to really get the ball rolling.

“In its current format, it mostly benefits larger organisations in accessing the ‘established business’ stream,” he says.

For Biercuk, tallying up approved sponsors and visas allocated is “the wrong way to measure it”.

For the businesses, like Q-CTRL, that have used it, the GTES has allowed them to hire the people they need from overseas. That is success, he says.

“I don’t care how many startups use it, I care whether I’m able to do what I need to do,” Biercuk adds.

“The program facilitates me hiring the technical people I need. So, to me, it is a total success, and it needs to persist.”

This article was updated at 5.30pm on August 12, to include response from the Department of Home Affairs.

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Stephanie Palmer-Derrien

Stephanie Palmer-Derrien is the editor at StartupSmart. You can contact her at [email protected].