Start-ups weigh in on the 457 visa abolishment


There are calls from the start-up community for the Federal Government to clarify its plan to abolish 457 visas and address concerns the reform could create a skills gap, especially in the technology sector. 

Dynamic Business was provided with comment on yesterday’s announcement by the leadership of Shippit, Weploy, SafetyCulture, QUT Creative Enterprise Australia, Schedugram and Sail Business Loans.

Offshoring and brain drain

Logistics start-up Shippit employs 16 people, including an engineer on a 457 visa. The company’s co-founder, Rob Hango-Zada, said putting Australian jobs first is a ‘great mantra’ but questioned whether the reforms would prevent jobs from being sent offshore.

“In the corporate world – and more specifically in the tech space –  off-shoring is a common practice, and in recent times 457 visas have meant that at least offshoring for specialised jobs is minimised,” he said. “The government needs to provide specific information about how this would impact key areas such as engineering and development.

“It’s good to see that skilled workers will still be catered for with the new TSS visa.  I would like to understand how the government can assist with recruiting for key areas with skill gaps. We need to establish Australia as a destination for skilled workers, where Australia falls short, in order for us to really own the innovation agenda on a global stage and prevent local brain-drain from Australia to the US and UK.”

Access to the right talent

Nick La, co-founder of on-demand recruitment platform Weploy, which employs fewer than ten 457 visa workers, described the reforms as a ‘great initiative’ that could advantage start-ups seeking the ‘right talent’.

“[The reforms] can provide many more working opportunities to Australians who are looking to step into a career,” he said.

“From experience, typically 457 visa holders take the current lower-skill/ labour-based temporary work purely because it’s all that they’re being accepted or considered for (which narrows job availability for Australians in this cohort). However, they would much prefer to be able to continue their expertise in temporary capacities, something that is difficult for them to do right now. By deploying skills to the right areas and addressing shortages, the change will free up more opportunities to our Australians – whether it be building up work experience or simply earning a living.

La said the rollout of new temporary visas, with a greater focus on specialised skill sets, will enable Australia to attract international talent so businesses can ‘up-skill where required’. He continued, “This will hopefully motivate Australians to succeed even more and help to drive our innovation agenda by giving founders access to the right talent to grow start-ups.”

La said it was important for the government to present employers with a strong case for the abolishment of 457 visas and its benefits. He added that the reforms need to be well-communicated to the public to avoid the spread of negative assumptions.

Supply and demand

Luke Anear, founder and CEO of SafetyCulture, which employs 12 of its 100 staff on 457 visas, is concerned the reforms will leave employers without suitably trained workers.

“It comes back to supply and demand,” he said.  “We need a significant amount of skilled workers in order to support all industries being disrupted by technology. The 457 program was a way for us to fill the gap between lack of skilled workers in Australia and finding experienced workers from overseas.

“The best and cheapest option is to have suitably trained workforce in Australia from Australia but we just don’t have it yet. We need to be able to continue to meet the demand and also provide the labor force to meet Australia’s current opportunity.

“SafetyCulture is competing on the global stage during a tech boom. Aussie companies need to be a manufacturer of products to export around the world and not just a consumer. We need to be a leader in the technology-enabled age.”

An innovation-driven economy

According to Anna Rooke, CEO of QUT Creative Enterprise Australia, the announcement “seems at odds with the notion of building an innovation-driven economy that can be flexible and responsive to needs of all businesses.”

She continued, “The uncertainty and lack of clarity around the implications and timing for changes is placing companies in a difficult situation. For instance, at CEA we have specialist positions that our start-ups, and ourselves as an accelerator, have recruited overseas for because of shortages in specific technical skills in Australia. The implication that this announcement may jeopardise those workers, and the start-up community more generally, is a significant issue until greater clarity is provided.” 

Implications for tech companies

Hugh Stephens, director of Dialogue Consulting and founder of Instagram scheduling tool Schedugram, fears the reforms will leave technology businesses at a disadvantage.

“It’s still not clear what the new visa class will mean for companies hiring technical staff,” he said. “This uncertainty is going to make doing business in Australia more complex, and increase the costs of doing business for start-ups that have better ways to spend their capital.

“Australia has a well-documented lack of technical talent, and local start-ups are increasingly desperate for high-quality software engineers, analysts and general IT talent. 6,590 people were granted 457 visas for IT-related occupations in 2015-16, and the government is crazy if it thinks that Australian businesses will be able to fill these roles from the existing dry pool of talent and the comparatively small number of graduates. We need to ensure we don’t cause a skills gap by not letting into Australia those who have skills we need.

‘The talent gap is very real’

Yanir Yakutiel, CEO and Founder, Sail Business Loans said the reform could potentially deal his fintech start-up a ‘big blow’.

“Just this month we began the formal process of seeking approval to sponsor overseas workers to help take our business to the next level – a big investment for a new business like ours,” he said. “In fact, we had recently extended an offer on the condition of the applicant receiving sponsorship and we planned to hire three to four others with skills and experience across technology, finance marketing and product development.

“Now, that growth may be in jeopardy. Especially if the Government decides to de-prioritize the skills we need most. It’s unclear, at this point, which occupations will be cut, so it is hard to know exactly what the impact will be.”

Yakutiel said that while it is important to create opportunities for Australians, the “talent gap is very real, especially within the technology sector”.

“It is critical that we make it easier, not more difficult, to attract and retain top talent and leverage their skills to compete in a global market,” he said. “Breeding uncertainty with these changes and cutting off pathways to permeant residency or citizenship is counterintuitive to that process.

“We have seen a significant skills gap in the roles we need most and these changes will cause more confusion and de-incentivise foreign workers who might have considered bringing their skills and experience to Australia.

“Talent is critical to growth, especially in the early stages of a business. In just a few months, we have created around a dozen jobs and supported small businesses all over Australia and now, our growth may be stifled by isolationists policies that are counter to the Government’s promise to support SMBs and Australia’s technology sector.”


Dynamic Business on Twitter Dynamic Business on Facebook Dynamic Business on Linkedin Dynamic Business on Instagram Dynamic Business on Google Plus