Tech companies are pleading with the government to develop an IT apprenticeship scheme to help meet a growing demand for tech workers in Australia.
The business group – consisting of Iress, Catapult, MYOB, REA Group, Seek, and Slack – want to dismiss the notion that software engineers have to be tertiary qualified.
“It’s actually a growing trend amongst global tech firms to drop the requirement for tertiary education for software engineering,” CEO of Iress, Andrew Walsh, told the ABC.
“At the moment the only pathway [in Australia] to become a software engineer is through a tertiary qualification but what we’re seeing amongst our peers is that’s not a requirement for getting the job done.”
Walsh said Australian tech firms like Iress are finding it difficult to recruit employees with top-tier technology skills.
According to ACS Australia’s Digital Pulse 2019 the country needs an extra 100,000 tech workers by 2024 – and that was before COVID-19 accelerated the pace of digital transformation.
“We’re interested in acquiring top talent and there just isn’t enough in Australia,” Walsh said.
“Our solution is to recruit from wherever we can – and we will place them overseas if we need to – but given the large dislocation as a result of COVID, we think there are people with skills that are sitting in industries next to us that we could re-train into technology.”
Instead of an overreliance on tertiary study – which can take years to complete – Walsh wants to see the government develop a framework for IT apprenticeships that provides accredited on-the-job training programs.
“If we spend two or three years providing upskilling, that’s not recognised by the next employer,” Walsh said.
“It’s not like going and getting a certificate. It’s not like being trained in the existing systems.
“We want the government to extend the apprenticeship arrangements that are already well-understood in Australia to software engineering.
“We want to break the stigma that apprenticeships are only for trades.”
Walsh points to the UK’s Apprenticeship Levy as an example of existing international schemes to encourage white-collar apprenticeships.
There, employers with an annual payroll bill exceeding £3 million ($5.5 million) pay a 0.5 per cent tax of that bill into a fund which is used to hire apprentices.
Employment Minister, Michaelia Cash, told the Australian Financial Review the Australian business group’s proposal “deserves further exploration”.
Of course, she does. The idea came from a business lobby and is therefore from god. Forgotten is that they, and she, got them into this mess in the first place when both spent an entire cycle (and probably longer) trashing local talent with cheap foreign labour.
One of the findings from this report was “the high and increasing numbers of IT professionals being granted 457 visas”, which “constitute by far the largest occupation group within the 457 program”. You will also see from the below table that permanent migrants are heavily represented in the IT space:
The APRI showed that Indian IT service companies have been successful in winning a major chunk of Australia’s IT consulting work on the basis of these 457 visa holders, partly because they are paying them much lower salaries than the market rate for IT professionals in Australia:
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As Table 2 shows, some 76 per cent of the 7,542 457 visas issued in the three IT occupations listed were to Indian nationals. The great majority of these were sponsored by Indian IT service companies as intra-company transferees…
Once in Australia their staff are being paid at much lower rates than experienced resident IT professionals and in some cases even new local graduates.
Even more disturbing is the relatively high proportion of these Indian IT professionals (28 per cent) whose 457 visas were approved at the extremely low base salary of $53,900 or less. This is despite the fact that only eight per cent of the 457 visas granted to Indians in the two ICT occupations in 2014-15 were aged less than 25.
The median starting salary for local ICT graduates under the age of 25 is around $54,000. Coincidentally, the 457 minimum salary ‘floor’ is set at $53,900…
The report also showed how the biggest sources of migrants (both temporary and permanent) – IT, accounting and engineering professionals – are also the areas with the biggest surplus of workers, thus debunking the view that foreign workers are required to overcome skills shortages:
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The Department of Employment also illustrated that 457 visas grew much faster than the growth in IT jobs, despite a large pool of applicants available per advertised job and large numbers of IT graduates being unable to gain full-time employment:
A key feature of the IT labour market is the large number of candidates competing for available vacancies. There were, on average, around 29 applicants per surveyed vacancy and most employers were able to choose between multiple suitable applicants (an average of 3.1 per surveyed vacancy)…
Notably, a number of employers recruiting for graduate or junior level vacancies had applicants who they considered to be overqualified for the advertised position….
While 457 visa grant numbers for IT professionals are variable over time, grants have been generally trending upwards since 2005-06 (when the data series began).
The number of IT professional 457 visa holders is increasing at a faster rate than the number of employed IT professionals. In 2009-10, the number of 457 visa holders equated to 3.0 per cent of employed IT professionals, but by 2014-15 it had risen to 4.3 per cent…
A range of data suggests that there is some spare capacity in the graduate labour market at present. Notably, graduate outcomes for students studying in the field of Computer Science (which includes the vast majority of students studying in the Information Technology field of education) have been declining for four consecutive years…
In 2015, 67 per cent of computer science graduates were in full-time employment four months after graduation, below the average of 69 per cent for all graduates. Graduate outcomes are now 17 percentage points below the level recorded in 2008 (84 per cent).
It is clear that Australia’s IT sector was one of the most heavily abused by Australia’s ‘skilled’ migration system, given the large number of temporary and permanent foreign workers employed in the sector.
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Indeed, the scam was so rife, that businesses managed to turn labour costs into a profit centre:
NICK MCKENZIE: In a series of conversations, the visa fixer asked Jasvinder Sidhu to find new visa applicants among his friends and family back in India. The fixer would then arrange for a corrupt employer to provide the paperwork for a fake job and visa sponsorship.
JASVINDER SIDHU: They were offering multiple sponsorships in commercial cookery, in mechanics, IT as well because he said his boss could arrange 457 in IT – information technology.
NICK MCKENZIE: The visa scam came as little surprise to Jasvinder Sidhu. He knows of many Indians who’ve paid large cash sums to corruptly obtained skilled or student visas in an effort to get permanent residency.
JASVINDER SIDHU: I’ve been hearing it eight, nine years and the last time I heard was last week when somebody paid $45,000 cash.
NICK MCKENZIE: Now Sidhu is determined to expose what he’s learned about Australia’s immigration underworld.
JASVINDER SIDHU: These people will then create your fake timesheets, fake pay slips and they will pay in your bank account and obviously everything else will also be fake, which is superannuation and other related documents.
NICK MCKENZIE: So you’re paying for a fake, a phantom job and in return you get your skilled visa?
JASVINDER SIDHU: Yes. So you are paying extra to get or create a job which doesn’t exist and to create a service which was never delivered and you’re getting permanent residency, which is not fake. This is a real output…
Yes, there’s corruption from top to bottom. Thousands and thousands of people are being sponsored and they’re all fake. The whole system cannot work that smoothly if there’s no corruption in the system.
NICK MCKENZIE: Someone on the inside has to know?
JASVINDER SIDHU: Oh, yes, definitely. Even if you do a bit of overspeeding, you are caught, but this is a huge corruption – huge level of corruption and it is so widespread.
As you would expect, indeed predict, the monstrous oversupply crushed the training of locals given falling wages and no prospects.
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And so, here we are today coming full circle, with the same geniuses demanding policy changes to bail out their fragile visa scam.
Here’s a tip. Train and pay locals properly next cycle.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
