Startup Analysis

As Labor promises to crack down on skills-shortage visas, will the startup talent gap widen still?

Stephanie Palmer-Derrien /

visa

Hannan Tew Lawyers partner Jordan Tew. Source: Supplied.

Bill Shorten has announced a crackdown on what Labor is calling “457-style” visas, in a bid to make sure Aussies aren’t missing out on jobs.

However, with little clarity over what the opposition’s changes would actually entail, the promise may be just another twist in a drawn-out debacle for tech companies trying to attract the best global talent to Australia.

Shorten claims 1.6 million people are living in Australia with visas that give them the right to work here.

“Surely some of those jobs could go to Australians,” Shorten said.

In March last year, the 457 visa was replaced with the Temporary Skill Shortage (TSS) subclass 482 visa, which was intended to be more cost-effective and quicker to process.

Labor has promised to “crackdown on 457-style visas” — presumably meaning the 482 — to prevent exploitation of foreign workers, and to give more jobs to locals.

“We should be a country who doesn’t have a temporary worker filling a skills shortage one day longer than it takes to train an Australian,” Shorten said.

Back in 2017, Labor proposed its SMART visa scheme, intended to attract leaders in science, medicine, academia, research and technology, while still protecting Australian jobs. In the most recent proposal, it’s unclear whether particular allowances will be given to startups, or the tech sector in general.

StartupAUS chief executive Alex McCauley tells StartupSmart that “Labor has been pretty clear that they want to support high-growth tech businesses get access to the talent they need, including overseas talent.”

Net migration into startups ultimately boosts local employment, “as those companies end up being able to employ lots more Australians”, McCauley says.

“It’s critical for the sector that companies are able to access the people they need to fuel rapid growth, so we’ll be watching this closely to make sure the rhetoric aligns with actions.”

A lot of red tape?

In many ways, any changes to the TSS 482 visa would just be the latest addition to a long debate about how better to attract workers from overseas to contribute to Australia’s ecosystem.

The scrapping of the 457 visa was largely criticised by the technology sector. And while a startup-specific Global Talent Scheme launched for a one-year pilot in July last year, it didn’t turn out to be the “game changer” the sector had hoped for.

As of February 2019, only eight applications had been lodged, and granted, under the established business stream, and no applications had been lodged under the startup stream.

“Talent is still the most critical area holding the sector back. It’s tough everywhere in the world — companies all over the globe are looking for highly skilled people with digital-product skills,” McCauley explains.

“We’ve made some steps forward, but there’s still work to do.”

While Labor’s proposed changes may change the landscape once again, Jordan Tew, a partner at Hannen Tew Lawyers and specialist in immigration law, calls them “a bit general”.

Speaking to StartupSmart, he says it’s currently hard to see what effect the changes would have on startups, because we don’t really know what they are.

Having migrant workers taking jobs that could otherwise go to Aussies is not really an issue in the tech sector, he adds.

“The proposed changes appear to be largely targeted at trades and lower-skilled positions, and that’s who these changes could affect.”

However, one proposed change would include the introduction of registered trade organisations, meaning candidates could face skills assessments before their visa is granted, Tew suggests.

Such a change could mean startups are caught in the crossfire.

“If they extend it to tech occupations, or all occupations more generally … then yes, that would be extremely onerous, that would be a lot of red tape. But I doubt they would actually do that,” he explains.

“Higher visa lodgement fees or levies have also been discussed, which is where the impact of the proposed changes may be felt the most,” he adds.

Ambiguity and uncertainty

However, Claudia Barriga-Larriviere, head of people at BlueChilli, says even the current procedure for hiring people on a 482 visa is onerous for startups.

457 visa

Claudia Barriga-Larriviere. Source: Tristan Velazco.

Her own team recently went through two 482 visa applications for new hires, she says, and even with a team of lawyers on hand, navigating the process was one of the hardest things they have ever had to do.

“We have a lot of support, time and resources … We know what we’re doing, and it’s still really hard,” she notes.

“There’s still so much ambiguity and uncertainty.

“Startup founders don’t need their lives made any harder than it already is.”

Founders feeling overwhelmed by the work involved may ultimately be “intimidated out of getting the best person for the job,” Barriga-Larriviere says.

“I don’t know how that’s fair, and I don’t know how that’s actually helping,” she adds.

“Whether it’s politically motivated or not is really not for me to say because I’m not in their shoes. But conversely, I don’t think they’re really in ours.”

Time is money

For Barriga-Larriviere, there’s a misconception that people who have a choice as to how, and who, to hire, are purposely looking overseas instead of hiring locally, because it’s cheaper.

“It has never — not at any time — been cheaper to get a foreign skilled worker than it is to get a local person,” she argues.

“Particularly for a startup, where time is money.”

Not only does going through the visa application process cost money, but it can take up to two months. And that’s before you consider “the uncertainty of actually getting someone through the door”.

Upping the minimum salary for visa holders doesn’t actually change much, Barriga-Larriviere says. What’s more important is “the lag of time between making the decision of hiring someone and getting someone in the door”, she explains.

“That’s something we would like help on, rather than telling us how much to pay the people that we are hiring.”

No business sets out on a recruitment campaign looking for a foreign skilled worker, Barriga-Larriviere says.

“They’re actually really hard to get”.

But a team that’s balanced in terms of gender, background, different perspectives, education, and lived experience, is better for the economy, she argues.

Organisations with balance and diversity “will create more jobs and they will create a stronger organisation”, she says.

This is already hard to achieve, and more onerous visa requirements won’t make it any easier.

When it comes to the process of hiring foreign workers, “putting more hurdles isn’t going to make it less attractive. It’s already as unattractive as it could be,” Barriga-Larriviere adds.

“I find the reasoning flawed and I find the formulation flawed … therefore, the economics of it is counterintuitive.”

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Stephanie Palmer-Derrien

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