Australian 457 visa clampdown threatens bank hiring

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Australian business unhappy with visa clampdown

Australia's ruling Labour Party’s attempt to win back voters has once again ticked off a key constituency – the business community – with an 11th hour vote to tighten up visa rules that may make it tougher for the banks to hire skilled foreigners.

Last week, the country’s House of Representatives approved by a single vote the Migration Amendment to increase the restrictions on the 457 visa, after which the law was passed by the Senate, with only a few skills categories escaping the clampdown.

The 457 visa has been widely used by employers to bring people into the country from abroad with specific skills to deal with Australia’s skills shortages in certain industries. The visas are valid for up to four years.

The visa historically drew the ire of some critics, who maintained that the visas had been abused – called ‘rorting’ - by immigrants seeking permanent settlement in the country. Proponents of the 457 visa rebuffed these attack, saying they were little more than xenophobia and racism, and only served to demonise skilled migrants.

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Writing in the Australian Financial Review last week, Australian Industry Group (AIG) chief Innes Willox said the legislation is “ill-considered and unnecessary ”.

The unpopular vote was the last act of the Australian parliament in the current session, and before what will likely be a fiercely contested national election following the ruling party’s fall from favour under ousted prime minister Julia Gillard.

The Australian newspaper reports that under the changes passed last week, banks and other employers will now have to do lengthy labour market tests and prove that they have searched for Australian workers before hiring temporary workers from overseas on 457 visas. They will also need to advertise in Australia for four months before sponsoring an employee from abroad, and they must prove they have advertised the role in a newspaper.

Oliver Spiers, director of BlackOcean Recruitment, a firm that specialises in the hiring of quantitative experts for Australian banks, says the amended 457 visa will ‘definitely’ have an impact on hiring in financial services if demand for these skills picks up.

He says that he deals with PhDs, statisticians and others with specialised skills, mainly from Europe and the US. Under the new rules, he says it appears that only certain categories in accounting, IT and engineering will be exempt from the tougher restrictions, but uncertainty remains about how far the new restrictions will apply to technical banking skills.

For now, though, Spiers notes that quantitative analysts do not qualify for the new exemptions applied to IT workers.

Peter Acheson, CEO at Peoplebank, says that the government’s attack on 457 visas was a setback given the critical hurdles facing industries that rely heavily on technical skills.

“Temporary 457 visas are not a long-term solution, but they provide a safety valve that relieves the pressure on Australia's skills base, and helps ensure confidence in industry capacity."

Michael Page's regional director Adrian Oldham lends weight to AIG's Willox argument that the clampdown on the visas is not needed. "According to the findings in our 2013/14 Salary & Employment Forecast Report,  63% of financial services respondents do not plan to hire staff on 457 visas over the coming year. Exceptions remain across executive roles, however due to the soft employment outlook for the sector and the relatively high supply of skilled candidates with Australian citizenship or permanent work rights, there will be little requirement to source overseas talent or sponsor candidates on 457 visas."

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