Older IT workers ‘dumped’ for 457 visa staff



news The Australian Computer Society has accused local technology employers of dumping older staff and failing to hire graduates, replacing both categories with “cheap” imported labor through the Federal Government’s 457 Visa scheme, as debate continues as to how the nation will serve its growing need for technology skills.

The 457 visa program is an initiative which sees overseas workers sponsored to work in Australia temporarily (between three months and four years) with the aim of meeting demand for skills not immediately available in Australia. Eventually, 457 visa holders are able to convert to Australian permanent residency status.

The program is used to a certain extent by IT firms operating in Australia to import skilled labor, as the list of supported professions under the program’s terms include a number of popular IT professions such as ICT business analyst, systems analyst, analyst programmer, developer programmer, softare engineer, computer network and systems engineer and telecommunications engineer. The IT portion of the program is administered through progressional group the Australian Computer Society.

However, the issue of overseas workers being imported to serve local needs has long been a contentious one. In March 2013, for example, then-Prime Minister Julia Gillard gave a fiery speech to a conference held by the Australian Council of Trade Unions, slamming the IT sector’s participation in the program.

“Fact: there is clear evidence that in some growing sectors, importing workers on 457 visas is a substitute for spreading important economic opportunity to Australian working people,” Gillard said. “Outside the resource states of Queensland and Western Australia, the single largest sector for temporary overseas work isn’t mining – or even construction – it is information technology. One in twenty temporary overseas workers in Australia is doing IT work in New South Wales alone.”

“It is just not acceptable that information technology jobs, the quintessential jobs of the future, the very opportunities being created by the digital economy, precisely where the big picture is for our kids, should be such a big area of imported skills.”

The issue was also highlighted in an extensive report on the ABC’s flagship current affairs program 7:30 in June last year, with the show going deep on on Indian IT services giant Tata Consultancy Services for what the program all but flat out said were breaches of the 457 Visa program. The show aired shots of a database of hundreds of Indian names of TCS staff working at Qantas, and also highlighted that TCS has business with other local companies including Woolworths and AGL.

Due in part to the issues, in late February this year, Assistant Minister for Immigration and Border Protection Michaelia Cash announced an independent review into the Subclass 457 visa programme. The independent panel is to provide its final report to the Assistant Minister by mid-2014.

In a submission to the panel (which you can download here in PDF format), first reported by the Financial Review, the Australian Computer Society argued that there was currently “a disturbing picture of over-reliance on 457 Visas by ICT employers” in Australia.

The ACS acknowledged in general that it was well documented that Australia has an imbalance in skills supply and demand across many sectors of the economy.

“Whether this is a net skills “shortage” or “skills gap imbalance” is a moot semantic point,” the group wrote. “Employers struggle to access skills they need to do business. Across all sectors of the economy, ICT is becoming increasingly important to drive value, employment and productivity. ICT now accounts for almost ten per cent of GDP, which is comparable to the mining sector.” Because of this trend, the group wrote, ICT jobs were growing in number and in specialisation in Australia.

Despite this, the ACS pointed out that both graduates and older workers in the ICT space were facing ongoing barriers to finding work.

Part of the problem, the group wrote, was that Australian organisations may be reluctant to hire graduates because while they might have deep technical knowledge, they might also lack the professional skills needed to work in business. This, the ACS wrote, meant that some employers might be turning to hiring workers on 457 Visas instead of graduates.

“Similar employability arguments are heard in relation to displaced older workers and those workers requiring up-skilling or cross-training and the ACS has received feedback from older ICT workers who have been retrenched shortly before their employer has brought in 457 Visa workers allegedly to replace them,” the ACS wrote.

“The ACS has received feedback from individuals of alleged employer abuse of the 457 Visa scheme. Typically this feedback is where employers are perceived to have retrenched older ICT workers and replaced them with “cheap” 457 skills due to perceived short-term cost and productivity drivers.”

However, the ACS noted, importing workers on 457 Visas did not represent a long-term solution to what it described as “a structural issue in the economy”.

“The ACS maintains that both temporary (457) and permanent skilled migration in ICT should only occur in the context of interventions to assist in addressing domestic skills imbalances and this should better be evidenced by employers in both enterprise training investments and employment market testing,” the group wrote.

“The real issues for the Australian ICT industry and the ICT profession generally are a continual lack of focus on attracting young people into ICT as a career and employer buy in to any form of ‘growing a graduate’ scheme that would skill them for such a career.”

“The ACS has consistently advocated for a focus on attracting young people into ICT through well-thought-out programs in schools; and increased levels of support for Higher Education and the VET Sector. In addition we would argue that government incentives might be considered to employers to encourage ‘growing a graduate’. As a result, Australia would produce more domestic ICT graduates, significantly reducing the reliance on 457 visas.”

The ACS gave the Government a series of recommendations for improving the situation, including developing a national workforce plan for ICT; strengthening requirements for Visa recipients to be appropriately skilled professionals; strengthening obligations on employers to test the market for local skills before applying for 457 Visa for ICT roles; and improving the available data on existing and future 457 Visa applications, to enable adequate review of the program.

The 457 Visa review comes as a number of major Australian organisations have recently been revealed to have undergone redundancies involving thousands of Australian technology workers. NEC, CenITex, Optus, Telstra, M2, the Queensland Government, IBM, Qantas, Sensis and others have all recently been cutting jobs.

My views on the 457 Visa program have largely remained unchanged since Gillard and then-Immigration Minister Brendan O’Connor went on their respective rants against abuse of the program in March last year. The program is always controversial, but as the ACS points out, the real issues are structural ones which need to be addressed no matter what happens with the 457 Visa scheme. I wrote in March 2013:

“I haven’t personally seen much evidence of Australians finding it hard to obtain work in the IT industry; on the contrary, there appears to be a great deal of work around, with both large organisations (the Government in particular is always hiring skilled IT professionals) and small to medium-sized business (including startups) having a great deal of jobs on offer.

What I am seeing a great deal of at the moment is major corporations offshoring IT jobs. When this happens, I tend to see some local redundancies, but those IT professionals laid off are usually quickly soaked up by other companies and/or trained to higher skill levels.

I would interpret these comments by Gillard and O’Connor as political moves designed to appeal to Labor’s ‘working class’ power base. However … this does seem a little strange, given that very few IT professionals would class themselves as working class per se. The IT profession tends to be more dominated by white collar IT professionals who would be middle class; and often vote Liberal. You don’t really tend to see too many IT professionals get politically active in the Australian Labor Party.

Are Gillard’s comments here a little misplaced? Yes, personally I think they are. What the Government should be focusing on instead in this area, in my opinion, is setting up incentives for IT firms to startup, grow and expand massively their operations in Australia, through tax concessions and the like. Incentivising major IT companies to stay in Australia instead of letting them be sold off to global companies would be one way to help grow Australia’s digital economy and foster jobs. Another way would be to provide even more significant incentives to the local video game industry, which has been basically wiped out under the current Labor Government, due in part, I would argue, to a complete lack of Government attention to the sector.

It would be nice if the Gillard Government stopped ranting about the fairly insignificant 457 visa scheme, stopped propping up ageing industries such as car manufacturing, and started directly supporting local IT firms, especially video game development companies, to operate in Australia. It would be very nice. But then, politics isn’t always about real outcomes: Usually politics is just about politics, no matter that it often makes no sense to those outside politics.”

As a side note to this story, I will note that this is the first useful piece of analysis I’ve seen from the Australian Computer Society for some time. Perhaps there is merit in the organisation which Freelancer chief executive Matt Barrie famously described as being run by “f*cking morons” continuing to grow and develop after all. Nice job to the ACS for at least discussing this issue with respect to the Government’s review. Let’s hope the group continues to contribute well-reasoned analysis about the IT industry; the government could use some more decent, real-world input from the IT sector into its decision-making processes.


  1. Was that the ACS (“Computer Science RSL” – Matt Barrie) providing some even mildly useful analysis (or anything for that matter)? I’m honestly shocked. I guess they had to justify their existence/membership fees at some point.

  2. ¨Eventually, 457 visa holders are able to convert to Australian permanent residency status.¨, if they do that don´t they become no longer cheaper than Australian workers, or am I misunderstanding how the scheme works?

    • The 457 visa isn’t necessarily for the employer to get the cheapest worker possible, as the minimum 457 wage is higher than the minimum wage for Australian citizens and permanent residents. The intent of the 457 visa is to get workers that are highly skilled or specialised into the country.

    • Yes that’s correct, but those same PR workers then have to compete with 457 workers.
      The 457 program is used by employers to place a cap on wages and conditions.

      Heres how the basic script goes:

      1. Job X pays Y
      2. Inflation happens
      3. No sufficiently skilled locals are willing to do job X for Y
      3b. Add highly specific skills requirements, Z, which nobody has, refuse to train locals in Z
      4. Employer gets 457 workers who are willing to do job X for Y
      4b. Ensure 457 applicants claim to have skill Z
      5. Inflation continues to happen
      6. Job X is now capped at Y in perpetuity

  3. It is interesting that the ACS, typically a outright supporter of 457 visas, are now discussing their perceived issues with it.

    It is also interesting that the ACS is raising issues around cross-skilling and training. As an IT professional currently looking for work, it is interesting that employers emphasise things like self study, hobby work and open source work as attractive qualities for potential candidates, but really look for commercial experience as qualifiers for hiring so that time to ramp-up and contribute is minimised.

  4. 457 Visas are one thing, but really, who needs them for “analyst/programmer/developer” type workers anyway? Why bring someone in to the country physically when you can bring them in virtually while they retain their far cheaper cost of living in their own country?

    Virtual workers don’t need to be paid anywhere near our minimum wages to live like kings in their home countries. Take as an example this; local Objective-C (iPhone Apps) developer is about $100-120/hr ($80k plus super and allowances, plus overheads). Same skillset worker that can VPN to your office will set you back $14.95/hr on a commercial hire arrangement. It will cost even less if you go private directly to the workers by using odesk or freelancer.

    457 visas and immigration legislation is like arguing about copyrights. Technology will always outpace legislation.

  5. Nothing in this really surprises me. If a company can save a stack of money by hiring someone on a 457, even if they’re not the best fit for the job, they’ll do it. Which doesn’t make it a good thing at all.

    Oh, and Renai? Softare engineer is a new one for me, but I’m sure they’re also important :) (And one typo in a lengthy article is a lot better than my typing in this short comment.)

  6. Why can’t the government impose sinancial overheads on 457’s to make them broadly as expensive (or maybe more so) than sourcing local talent? They’ve been doing this on car imports for decades, I don’t see why they couldn’t do the same with migrant worker programs…?

  7. 457 visa scams are rife in IT. Especially among large system integrators like IBM who win contracts based on pricing and then bring in sponsored workers from IBM India. Seen it first hand.

  8. “stopped ranting about the fairly insignificant 457 visa scheme” I don’t know why I waste time coming back to this site. You’re just clueless. Over the past 3-4 years I’ve seen entire floors in the offices of the financial company at North Sydney I work at transformed to what an office in Mumbai would resemble, where the banter in the kitchen is all in Hindi. The nature of work remains the same as it was before this influx of workers from the sub continent. There was no skills shortage. And yes big names like IBM are at it too. Not just offshoring but replacing local talent with 457s. You really need to talk to someone with first hand experience.

    • Clueless? You’re forming your opinion on your experiences with one company then bashing the editor for focusing on the broader industry. If you are that short sighted in presenting an argument based on one services company, and honestly believe there is no skills shortage at all in Australia then you are almost as ignorant as you are “clueless”.
      FYI – I’ve never met someone on a 457 visa in the IT industry in 5 years of working in infrastructure services. Shock!

      • “Clueless? You’re forming your opinion on your experiences with one company then bashing the editor for focusing on the broader industry.”

        Welcome to my life.

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