IT firms in panicked push for local talent as visa scam impodes

Via IA:

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.

The Australian Population Research Institute’s (APRI) 2017 report entitled “Immigration overflow: why it matters”, examined the widespread rorting of Australia’s 457 visa system, especially by Indian IT firms.

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:

ScreenHunter_16433 Dec. 02 07.28

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:

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…

ScreenHunter_16434 Dec. 02 07.34

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:

ScreenHunter_16436 Dec. 02 07.49

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.

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.

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
Latest posts by David Llewellyn-Smith (see all)

Comments

  1. Perhaps we need to scrap the granting of PR to offshore applicants?

    If you are on a temporary work visa, and undertaking work where there is a genuine persistent skills shortage, then you should be considered for one of the limited number of PRs on offer each year.

    If we are looking at radically reducing our PR numbers each year, the bulk could be filled via partner visas, and the rest in the rare instance for jobs where there is a genuine and persistent skills shortage.

    But the government won’t do this as we all know they are a running a quasi-low skilled mass immigration program.

    • Kids could do IT again.MEMBER

      Obvious there shouldn’t be PR – should just be guest workers – then they’d have to ask for a decent salary per year, as its not with the bonus worth about 200000 to anyone of PR and citizenship.

      Gee maybe the kids might be able to have an IT career, rather than being unemployed graduates competing with low wage 457s.

      • Guest workers are good for lower skilled jobs that locals won’t do (even if wages are improved) but for certain types of high skilled jobs a PR carrot may be required in the first instance to get them here.

    • Agree with ChaseMEMBER

      Then theres that Innovator approach of Atlassian. Lots of 457s on minimum salaries. Much easier than training a graduate.

      • Achilles Tskakis

        You can work ’em harder too, just threaten to send ’em home.

        Atlassian doesn’t do the Indian thing much, they prefer quality Vietnamese coders, who make up 35% of their Sydney office.

          • Better educated perhaps? Less university corruption and fake qualifications from one country to the other? Better experience (actual experience not claimed experience).

        • IBM preferred Indians on their Customs contracts in the early/mid 2000’s. They’d stay for 6 months then rotate out to another company. Screwed up the whole imports revamp in 2006-ish. Oddly, it was the one Aussie programmer Customs had that saved their bacon for ABN registration time…

  2. Achilles Tskakis

    want to dismiss the notion that software engineers have to be tertiary qualified.

    Shows how low standards at Aussie uni’s are – their IT degrees are now useless.

    • Not just Australian universities, but every university in the world. Why would you pay $40k to go to uni to learn to code, when you can do it online for a fraction of the price or even free? IT is just the first cab off the rank in the big shift away from traditional tertiary education.
      Elon Musk put it well: “I think college is basically for fun and to prove that you can do your chores, but they’re not for learning,”

  3. Experienced software engineers have seen their salary stagnated or reduced for years. You can’t compete with cheap import

    • No way. Just picked up some Node.js + Azure/AKS work. $1100/day for a dev role, not even lead. All WFH

      Hardly stagnating. Just need to stay up to date with tech.

      • Node.js for the non-technically inclined isn’t exactly a “hard computer science/engineering” platform either. Straight business apps/orchestration logic with cloud services doing most of the work for you. It would have to be contract for that rate in Australia I would imagine (that’s $264k per annum assuming 4 week holidays of holiday unpaid).

      • One get’s what they pay for with… imported “talent” in my 14 years experience in Canberra IT contracting. The $110/hr guys are much cheaper than the $50/hr guys once all costs are considered (or if you simply want to deliver on time and near budget).

  4. I remember during the last decade an intelligent IT co-worker really struggled with stress of cost of living supporting his wife and 3 kids during his 3 years on 457 visa earning under $60k until he got PR approved, and the 457 lock-in shackles removed.
    Now he does the exact same kind of work for $110k (for a different company).

    • Low wage plus a PR bonusMEMBER

      He was getting 60 K and a third of a family PR (with a lifetime of Aussie benefits). Pretty good wage for 3 years. Probably 10 years experience but happy on a graduate wage. No wonder inexperienced grads miss out.

      • Plus the opportunity for his parents and in-laws to perpetually ‘visit’ and tap into the health system by questionable means (emergency room visits or by Medicare fraud).

        Plus pooling the resources of three sets of couples to push up house prices.

        No sympathy.

  5. migtronixMEMBER

    I’m old enough to remember everyone saying my lunch was already eaten as I sit here wfh mentoring juniors in India and flooded with recruiters…

  6. 🐛 S GroperMEMBER

    Spot on DLS. 457s dominated numbers on a lot of big IT projects in the resource sector over the last 15 years. Project where loaded up with large testing teams (all 457s) so they could gain experience and knowledge off the back of experience local professionals. Yes, it is time to give opportunities to our young folk, but I cant see this government doing anything other than bringing cheap imported labour back a soon as they can.

  7. always wanted to learn how to code.. well I did bit of that ~25 years ago with Pascal. If an opportunity presents I am happy to take apprenticeship and work for $300 per week for the sake of learning – @ 52 years.
    There are probably more people that would like to do same but can’t afford due to enormous loans they have.

    • Google “learn to code for free”. You’ll find tonnes of resources, including from top universities like MIT and Stanford. Spend a couple of hours a week for a couple of years and you’ll be competent.

    • I did a CS degree in the early 90’s but the quality of resources online nowadays to learn programming is much higher than the formal instruction I got in uni. If you seriously want to learn how to code I’d recommend you learn Python. Start with https://www.learnpython.org/ and https://www.codecademy.com/learn/learn-python-3. Python is similar to Pascal in that it’s an easy language for beginners to pick up and is widely used in education. Unlike Pascal (which lost to C) Python is also used heavily in industry as it’s a very good jack of all trades language used in a lot of different domains (e.g., system administration, web, data analysis, ML/AI).

      Unfortunately I think you will find it difficult to get work as an apprentice without having spent a lot of time to learn the basics, even at low/no pay, as experienced developers will only be slowed down from their own work trying to train a newbie. Sounds you like you have a lot of industry experience, so rather than focus on general purpose coding my recommendation would be for you to focus on adding coding to augment your existing professional skill set.

  8. Arthur Schopenhauer

    I was seething told by a senior executive of a big Australian company that he could get 5 Indian engineers for the cost of one Australian. He then went on to complain his recent graduate kids were having a hard time getting a job. 🙄

    (And, of course, he had a high school certificate and the school of hard knocks.)

    • Had same conversation with partner at big 4. Took a while to tease it out but ultimately he came clean. Apparently they have a fast track scheme with immigration to help things along.

      Also father in law had a company that employed via 457 from overseas. His line was “why wouldn’t we at that price?”. Now his son early 20’s can’t get a job.

    • Display NameMEMBER

      He cant. If he is getting 5 for the price of 1 local, he is getting 2nd and 3rd tier Indian uni grads. Generally they can barely spell technology. By the time you get 5 together you need another person just to manage that the five. I think we have reached peak outsourcing locally. This has been going on for a decade. Some stuff is starting to come back. Really good Indian resources are 100+K AUD. A good friend of mine is a CTO of a US corp with 400 indian devs They are no longer cheap.

      • I think local companies are seeing the low quality and damage from a high percentage of the imports – they are now using COVID to get rid of the deadwood.

      • Arthur Schopenhauer

        True. A very small team, of 3 talented developers will deliver far more at a better quality, than 15 very average developers and associated ‘project managers’ cutting and pasting from stack overflow. If the latter manage to deliver anything at all.

        But try communicating that to the ‘Game of Mates’ set. IMHE their base projection is everyone is as talentless and nefarious as they are.

        • So true Arthur.

          A good plumber can take on an assistant, and within 5 days or less can tell you exactly how good that assistant is and ever will be at plumbing.

          Likewise a good programmer (or App’er or whatever they are called these days) can work with a junior and within a 5 days or so can correct assess the talent.

          However managers are generally waste-of-space material and cannot assess a good plumber, or a good programmer. Hence they can only look at number of lines of code written vs wage cost. IMO this is why they hire so many cheap Indians and other cheap substitutes.

          In fact all throughout Australia I find that managers of everything have replaced quality in so many areas with cheap substitutes. Outsourcing, contractors, consultants, imports, Chinese-made, they all fit the same pattern.

      • I used to live near a gourmet sandwich shop which had the following sign in their window:
        For the price of one of our sandwiches you could buy three Big Macs. But… then you’d have the eat them.

    • But it helps property prices.MEMBER

      Lucky the kids can inherit a 3 million house when they graduate from the expensive private schools, and become unemployed graduates. The kids are benefitting from his approach netting the bigger bank bonuses . Maybe not the other kids.

    • And the kid will go overseas to work and the father will bemoan not seeing them or the grandkids.

    • There’s only a “shortage” of local talent because all the actual talent has been going overseas to where it’s paid what it’s worth and treated with the respect by management that it deserves.
      Sure, the cost of living is through the roof in the San Francisco Bay Area, but I can assure you that the increase in remuneration more than makes up for it.
      I would like to come back to Australia to raise our children and my American wife would like to as well, but I’m not taking a >AUD200k/yr cut to do so. In the meantime, I just continue to advocate that talented Australians make the move as well.
      The Australian Computer Society is a bunch of stuffed shirts chasing professional status who offer nothing of value and should be disregarded.

  9. the biggest sources of migrants (both temporary and permanent) – IT, accounting and engineering professionals

    But Aussies should pick fruit? WTF

  10. Jumping jack flash

    Exactly the reason I left IT, probably never to return. I saw the writing on the wall as far back as 2007 shortly after I moved to Sydney. It looked as if the rot in the IT sector had been going on for quite some time when I turned up with 6 years of experience and holding a fresh postgraduate qualification. The pay and conditions for developers was well on the way down.

    The icing on the cake was at my last job before moving away from Sydney in 2012, a fully qualified Indonesian 457 visa’d developer, up to speed with all the latest Microsoft tech at that time, was being paid the princely sum of 39K. In Sydney. In 2012. In broad daylight.

    I fled the field and reskilled. There was no hope for the future.

    • Rofl!

      A bit over 10 years ago I was offered a job in Sydney for ~55-60
      Couldn’t help myself.
      I started laughing and blurted out “I’ll be living under a bridge for that!”

      • Jumping jack flash

        Working now in engineering, getting my qualification, developing new ways to replace people with machines in the meat processing industry. Best fun I’ve had in ages.

        The company I worked for was recently taken over and their R&D is done overseas, which I guess is pretty normal so I’ll see what happens with all of that over the next couple of years.

        If IT takes off again I could always step back in there as well, but I’d rather not. Spending all day coding would seem pretty soulless now.

    • Jj-flash, similar here. c#, asp.net, html, ccs, javascript, vba, few databases, and the dreaded php. Was very well paid. From about 2009, things started peeling away, for me anyway. Work started thining, pay was reducing. From 2014, I was pc building, home networks, repairs, then that thinned out too. I noticed lots of ex IT were doing the same.

      Anyway, 2017, I knew (still know) a manger of a small outfit hiring a c# developer, quite a good one too, on a one year contract, Australian citizen for,…. $45K + super.

      But also, on the other side of the fence, same year, Java programmer, $210K + bonuses per year. His job went for 18 months then they shook his hand.

  11. I came into Aus on this scheme mid-2000’s. At the same time the company employed another person with same experience, same role but from South Africa. Turned out they employed him on exactly half the salary as myself. When he found out he quit and was fortunate enough to find something else within the 30 day visa cancellation process. I spent 8 years with the company before the cycle was complete and they turfed me out to employ someone from overseas on probably half the salary.

    These schemes have always been a joke and widely abused.

    In my current role I am involved with a large big 4 run project at the nation’s broadband provider. 80% temporary visas I would say if not more. Even the client is in on the scam. Over Xmas I sent an email to a number of people from the client only to get a load of out of office replies with Indian mobile numbers attached.

    • only to get a load of out of office replies with Indian mobile numbers attached.

      How racialist!

    • I had a similar experience contracting for the national broadband provider in 2016. At one point we needed a bog standard load balancer set up in front of two server endpoints. Two sys admins from the subcontinent flailed around for three days trying to get it configured on the fancy F5 box. In the end they failed (load balanced connection kept being dropped) so I said forget it and set up a manual round-robin failover myself.

  12. what other ASX firms will juice this repatriation of IT services and man-power? Love a good repatriation!

  13. Lets test the market for hirsute larger gentlemen with a penchant for SQL and an active dislike of humans.

    • blacktwin997MEMBER

      Just in case the data adventure falls through, would you be up for forming a patriotic outlaw motorcycle gang? My PL/SQL isn’t the tidiest but i’m working very hard on both the largeness and hirsuteness as well as having some lightly used non-Japanese bikes available. And of course as a resolute shut-in i generally just hate cunce so no additional training required there.

  14. You’d be crazy to sign up for this knowing that as soon as they can open the floodgates they’ll be sending you packing.

    • Charles MartinMEMBER

      How will you organise relations parties without IT nerds? Carrier pidgeon? Bat signal?

  15. Make foreign labour costs non-deductible. The tax planning multinationals will understand that.

    And this doesn’t make a lot of sense:

    “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.

    As an employer, wouldn’t this be a great way to make sure your employees don’t get poached?

    More likely, it is just bullsh1t excuse. The Big 6 accounting firms tried to do something similar in the 90s by internally training staff. Turns out that it didn’t work and eventually, the piece of paper is just that, a piece of paper and actual experience is what is valuable and smart employers can see that straight away.

  16. I wish I’d done a trade out of high school instead of IT.

    I’m going to have to skill to something else or work out how to transplant to the US (interested in others experiences in achieving this). Jobs for the platform of the majority of my dev experience don’t seem to exist in Australia anymore or have been outsourced (AS400). Most of my colleagues have had the good fortune to (or are about to) retire.

  17. The truth about IT skills is that it is a skill; and as such if only subject to the local market given current supply (Australia’s education system rewards humanities and punishes STEM IMO) and demand which is only rising it stands to reason that wages SHOULD be increasing to the point where it is worth training locals.

    However given globalisation that’s not really the case. The US has a different dynamic than here. I’ve seen it in my career in some companies in Australia (large corp) where consultants, architects, advisory boards, etc don’t actually understand the “on the ground” experience of developing and testing software, and true cost end-to-end. They often are willing to outsource or pay huge sums of money to other companies/vendors when a simple in-house thing could of been whipped up in a week. More project managers, consultants/advisors with their market research ratings (Gartner) on products, etc than actual developers who know how the “magic actually works” and realise that many tech products are mostly marketing and a lot of the good stuff is at least on the software side open-source. Corporatism is huge in Australia – which tends to IMO devalue tech skills (the people actually producing something).

    There are some companies that aren’t like this and I’ve worked for them. But many I know have experience the above firsthand – its hard to be innovative when the culture doesn’t empower the builders (software, electrical, etc. etc)

    • Arthur Schopenhauer

      So very, very true.

      Tech skills are often feared, which makes fostering a cooperative environment challenging.

  18. Why complain – this is awesome! The need for university degrees is – finally – getting the scrutiny it deserves. If on-the-job training outcomes achieve the business then its a win-win…the employer gets their needs met and the employee dodges years of study and debt servitude. bring it on!

  19. Poochie the Rockin DogMEMBER

    I recently got a part time job in IT (jackpot!), no agile scrum, working for a manager who has tech skills – I don’t think I’ll ever do better than this 😀

  20. What a joke Australia has become. The IT industry in Australia is a joke. It used to be respected….before they destroyed its credibility by outsourcing everything, all courtesy of “clever” finance departments and CFOs. who thought it would be wise to kill off locals and get cheap imports.
    These same people want local talent now?

    Are you kidding?

    No. What needs to happen is outsource finance departments and CFOs to third worlds.

  21. The last part of the story is about an immigration scam, reported by Nick McKenzie of ABC 7:30.
    Essentially, people (skill type irrelevant) in India pay immigration agents to arrange all the paperwork required, for a fat fee, to get permanent residency via scamming the 457 visa system. (Watch the video for details).
    Why would Smirko’s gov’t ‘allow’ this scam? Because it lands more bodies into Australia who will then need to pay rent.
    Covid19 has stopped all the immigration scams, which is why Smirko is panicking and trying to organise for 1500 students to fly in to SA.
    Immigration scams, enrolling o/s students into cash starved unis, anything to get bodies into Oz as fodder for the landlords.
    It’s all about propping up the property ponzie.