NEW REPORT OUT NOW
10/11/2023
In the wake of the COVID-19 pandemic there have been severe shortages of workers around the world. Recent recruiter surveys have shown that job vacancies are going unfilled at record levels and 79 per cent of employers in Australia report difficulty filling vacancies. The ongoing competition for talent is very real.
As we work with businesses across the globe, we see a few key drivers of immigration. Firstly, geopolitical instability in regions like Hong Kong and Taiwan, the Ukraine-Russia crisis and the current Israel-Palestine conflict are increasingly impacting staff safety and mobility.
Businesses are now considering security concerns for staff in impacted conflict regions, in addition to the operational needs to transfer staff from high-risk locations.
The other trend we see is the impact of inflation, including: higher cost of living; the ongoing housing crisis; level of complexity in the migration system; and increased government filing fees. These are affecting business immigration strategies and employee willingness to relocate.
For major countries around the world, a declining workforce is also a significant issue – Germany is experiencing one of the worst demographic crises, with predictions its population will decline by a third by the end of this century.
China, Japan, Poland, Portugal and Romania are projected to lose up to two-thirds of their labour force by the same time and Australia also saw its first drop in population numbers since WWI during COVID-19.
Although there are skills shortages in many sectors, a major trend that many countries grapple with is skills mismatch. There are disparities between the skills employers want and the attributes job seekers have, including over-education, under-education or outdated skills.
For instance, China is struggling to balance its sharp rise in a highly educated population with labour needs such as manufacturing. This global issue is likely being seen in economic productivity, unemployment and wage disparities.
To address this, countries worldwide are exploring and implementing a multifaceted approach. This includes modernising educational curricula to align with industry demands, promoting vocational training to combat the stigma associated with non-university pathways, and investing in continuous upskilling and reskilling programs for the existing workforce. We know that here in Australia, our education system and its importance to our existing and future workforce and needs is well understood.
CEDA’s own research into migration has also identified a skills mismatch in the migrant’s journey to and settlement in Australia. Skilled migrants can end up working at lower levels or in a different occupation in Australia. This further affects Australia’s ability to advance itself and heightens concerns around wages disparity and migrant worker exploitation.
As governments review their labour needs, attention is also turning to semi-skilled labour shortages and how to manage this important cohort of labour through migration systems.
Japan, which has traditionally had a very tightly controlled immigration program, has recently attempted to address the issue through its more recently announced “specified skilled worker” visa program, that would extend long-term visas (beyond five years) to workers in sectors such as farming, fishing, food manufacturing and food services. In Canada, a broad range of semi-skilled occupations are now eligible for “Express Entry”, such as bus and truck drivers and payroll administrators.
In Australia, the migration program is codified and is largely focused on highly skilled occupations, with myriad concessions under related programs such as labour agreements for lower-level roles. With supplementary programs and rules for attracting skilled people into regional areas, our system is complex. The need for reform and innovation is critical to keep pace and attract and retain skilled migrants now and into the future.
A new tier-based system
To address this, the Federal Government's migration system review panel has flagged a three-tier system for our main sponsored work visa (the Temporary Skill Shortage visa).
Tier 1 would cater for a high-salary cohort and is light touch. Tier 2 would be for the mainstream mid-level cohort, and Tier 3 would accommodate the lower wage/skilled cohort in sectors experiencing persistent shortages and who are most at risk of exploitation and displacing Australian workers with similar skills.
Businesses are particularly interested in the details of Tier 3 given the increased need for semi-skilled or lower skilled roles (in health, aged care and childcare for instance) and how complex or streamlined this may be.
The issue of skills is multi-layered, and in addition to migration policy itself, countries are becoming increasingly innovative in sourcing and enhancing the skills of potential workers given the current skills shortages.
For instance, the pool of doctors from Francophone Africa makes up a sizeable contingent of France’s healthcare system. In Quebec, Canada, a system is in place where French-speaking nurses from African nations can be upskilled to meet Canadian registration requirements within Canada itself, allowing them to work outside healthcare while they do so. Germany is looking to establish centres in Ghana, Egypt, Morocco, Nigeria and Tunisia to help qualified applicants move to Germany.
Australia has also introduced a pilot Labour Agreement with Talent Beyond Boundaries (a not-for-profit) to support skilled refugees and displaced talent as a complementary skilled migration pathway.
Canada and the UK also have active complementary skilled pathways for this group and many other countries, particularly in Europe (including Germany), are looking at how to construct programs to access this talent pool.
In Australia, as we await the Federal Government’s full response to the migration review by the end of the year, we anticipate further reforms to migration policy, as well as efforts to improve on-the-ground resources, processing times and technology – including AI.
Fragomen remains supportive of the Federal Government’s drive to build a migration system that meets both the current and future needs of Australia and is internationally competitive.