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Foreign worker 457 visas rorted in IT

Wednesday, March 20, 2013

ICA member Allen Cummings says the 457 visa arrangements are not working in IT. Comments welcome. Allen says:

I am concerned that the media doesn’t understand what is happening in the IT industry with offshoring jobs and the use of cheap 457 visa IT staff to replace Australian IT staff.

The Insider Program on Sunday (early March 2013) discussed the issue whether 457 visas were being rorted within the IT industry. Having worked in the industry for more than 30 years, I can honestly say that I have never seen a time where it has been harder both for senior experienced IT professionals and entry level graduates to find and maintain employment. I have no problem with the 457 visa programme as such, but it is being rorted.

The IT industry is advertised as one having skills shortages, yet consider the following:
  1. Last month 10,000 high  skilled IT jobs were made redundant.
  2. I personally know of five SAP computer programmers made redundant from my company a year ago who still don't have jobs ... contract or permanent. These people were very highly skilled and experienced IT professionals.
  3. In my specialization (SAP FICO Consultant), the Seek http://www.seek.com.au website advertised 29 full-time and contract roles throughout Australia over the last 30 days. The fulltime jobs are being advertised within the $80K to $85K salary range, whereas a year ago these same full-time jobs were advertised for $100K+ pa. A year ago, contractors were paid $800–$1000 per day, but now these contracts are being offered at $600 per day. In total, there were 4,180 SAP jobs (all specializations) advertised by Seek over the last 30 days. Overseas applicants can apply for these jobs if they have an appropriate Australian work visa.
  4. A corresponding specialist 457 visa website http://www.australiajobs77.com advertises the same type of Australian-based SAP jobs to overseas workers where Australian residents cannot apply. In the last 30 days, there were 344 advertisements for SAP FICO jobs and 8,156 advertisements for SAP jobs in total. The same trends are found in computer programming, networking, and other IT roles.
There are three reasons for the employment problems for Australian IT professionals:
  1. Highly skilled professionals are being excluded from jobs in preference to lower paid 457 visa holders. In addition, the salaries and conditions for working Australian professionals are being driven down. Yet we are supposed to be facing a skills shortage! How can this be?
  2. Australian IT projects are being tendered to overseas suppliers and filled by workers on 457 visas. For example, the Brisbane City Council SAP project and the Gold Coast City Council SAP project are using offshore suppliers at the expense of local IT professionals.
  3. Australian company support teams are being replaced by foreign workers and forced to train them. The company I work for was recently canvassed by an International IT company and offered to do all the IT support and project at half the cost of having internal staff. Our company decided not to go down that path but you only have to have an HR director and CFO who are supportive of offshoring work and local workers get made redundant.
As usual, the government’s own policy has been poorly implemented and loopholes are being exploited. The 457 visa programme advertises the minimum salary for IT workers as being between $50K and $85K. This may be true for public-sector IT workers, but it is certainly not the case for non-government workers. As I said, a year ago, the commercial rate was double the government rates. Employment agents are exploiting this by getting cheaper foreign labour as independent contractors but still charging Australian companies normal price for the contracts.

A second major flaw in the design of the 457 programme is the lack of proper market testing. Originally the 457 programme required market testing, but this requirement was relaxed in 2009. Now, companies are relying solely on the advice of employment agencies who advertise the positions in the market. If this rort is allowed to continue to operate, we will see the destruction of the IT industry for Australian permanent residents. The solution is to ensure that jobs are marketed at Australian market rates, not minimum rates, and that Australian residents are able to apply for any job advertised.

As a conservative voter I blame the government for creating this stuff up.... And it is up to the government to fix the mess. I agree with the recent measures that Labor has announced, but why have they taken five years to recognize the problem and why are they are only acting in an election year? One has to doubt their motivation. Meanwhile, the Liberals are completely ignoring this issue rather than offering real solutions. The problem is that Australian-based IT workers are being exploited!
Anonymous commented on 20-Mar-2013 06:40 PM
I would like to share my experience.

As a New Zealand Citizen I am able to live and work here in Australia. I have rare IT skills and in 2006 I was offered a long term contract based in Canberra.

The work I did in Canberra won two public service awards and life was good. Kevin Rudd delivered the 2009 John Patterson Oration calling for the APS to do "more to attract, train and retain the very best people" (it is well worth reading his speech in full).

Nine months later and Kevin was gone and Julia Gillard had taken over as Prime Minister. Suddenly every Federal Government Department was hiring only Australia Citizens.

I was holding three contract offers in Canberra in late 2009 and at the last minute all three offers were "withdrawn".

After a great deal of effort I obtained my Australian Citizenship last year and returned back home to Canberra. In the event this was a complete waste of time and effort because the new rule is that to work for a Federal Government Department (even to enter many Federal Government Department Buildings) you need a Security Clearance (and to get one of those you require you to have been an Australian Citizen for at least 10 years).

I saw the Insider Program on Sunday and smiled when the 457 Visa issue was discussed.

My advice is simple.

If you are a "proper" Australian Citizen and want to avoid competition with people on 457 Visas relocate to Canberra and take up a Permanent Federal Government position.

If you are a relatively new immigrant understand that you may win 3 or 4 month contract roles in Canberra but to enhance your long term job prospects you need to insist that your employer supports your security clearance application. Get something in writing before you start the engagement.

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