Immigration, visa changes & overseas talent. Is Defence industry ready?

Michael Wall, National Leader, Immigration Services MARN 9576974
Michael Wall, National Leader, Immigration Services MARN 9576974
Mike Kalms, KPMG Australia’s Defence Industry Lead Partner, and member of the Government’s Expert Panel

Defence companies often look overseas for talent. They have to. The ADF’s project cycles are too long – who can hold onto talent across the years between projects? But now the immigration and visa rules are changing.

So what’s happened?

The Federal Government has made a strong commitment to continuous shipbuilding in Australia, and alongside this comes a need to stimulate workforce growth to meet the demands of the build program. Government initiatives, the proposed establishment of a Naval Shipbuilding College and bi-partisan agreement to the maritime investment program outlined in the Integrated Investment Program and Naval Shipbuilding Plan, are encouraging for the defence industry and provide some security on which to build their businesses and shape their workforce.

Senator The Honourable Marise Payne Minister for Defence visited Australian Submarine Corporation’s shipbuilding and submarine facilities at Osborne, South Australia.

But to meet the aspirations of our government, and establish an enduring shipbuilding and maritime sustainment capability within the domestic workforce, it is going to take time.

In recent years employers have filled skills shortages in the Australian labour market by generating a skilled workforce through avenues such as the 457 temporary visa.

But the latest reforms to Australia’s work visa framework will have knock-on effects on how labour demand can be satisfied into the future, where demand exceeds local supply.

What are the changes?

  • Employer-sponsored skill migration is now subject to revised eligible occupation lists with pre-determined visa validity, and removal of pathways to obtaining Australian permanent residence for foreign workers who are in short-term occupation.
  • Certain occupations have been removed altogether and remain ineligible to be sponsored for work visa purposes.
  • The replacement of the 457 visa with a new Temporary Skilled Shortage (TSS) visa from March 2018. This will require mandatory Labour Market Testing (if no international obligations apply) and the payment of a new Training Levy.

How will this impact the Navel Shipbuilding Agenda?

Whilst the changes are designed to address genuine skill gaps in the domestic workforce, they will inherently impact on the Australian Defence Industry’s ability to recruit and retain a skilled workforce.

The removal of certain occupations limits the ability for the shipbuilding industry to source talent outside Australia.

Furthermore, certain occupations will only be granted a two year visa, compared to a four year visa for other roles. In practice, this reduction may be a disincentive for foreign nationals who are suitably skilled in these occupations to relocate to Australia to help fill gaps in skills that cannot be adequately sourced from within the local labour market.

Four implications for leaders and HR professionals within defence industry

  1. Less likelihood of experienced overseas hires

For global organisations seeking to establish a presence in Australia, or resident Primes (primary long term Defence contractors) seeking to expand their current footprint, these changes restrict your ability to draw upon an experienced overseas workforce to initiate Australian operations in parallel to training local staff as part of a long-term strategy.

  1. Workforce and business continuity planning more important than ever

The changes reinforce the need for workplace and business continuity planning for Australian Defence Industry players, in considering the short and long term implications of these visa changes as part of their business strategy. This also includes forecasting the costs of the increased turnover of the inbound workforce, including higher visa charges, relocation costs, assignment benefits and taxes. Yes, the government is planning to address industry-wide workforce planning as part of the Naval Shipbuilding College’s establishment, but this does not diminish industry’s role in managing that challenge.

  1. Monitoring the impact and availability of skilled workforce essential

Industry participants must monitor the ongoing impact and availability of a suitably skilled workforce to support the ongoing development of Australia’s long-term capability and competiveness on a global scale. A key challenge will be to ensure labour agreements allow for recruitment of specialist skills which cannot be identified from local markets and training arrangements embedded to ensure appropriate skills transfer to the local market.

  1. Check you comply with the changes

The changing landscape also serves as a timely reminder for Australian businesses to ensure your migration and visa processes are aligned to the new requirements and monitored for ongoing compliance. Now is the time to rethink your recruitment strategy so you don’t get caught with a less than optimal workforce.

Image: Photographer: SGT Rodney Welch  © Commonwealth of Australia, Department of Defence

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