Why small WA firms are turning to 457 visas: We can’t compete with the big miners on wages

Unrealistic pay demands from Australian workers are a key factor in driving small firms in the Western Australian resources industry to hire workers on 457 visas, an Edith Cowan University study released yesterday has found.

The 457 visa, introduced in 1996 to alleviate skills shortages in specific parts of the economy, has recently been the subject of political debate, with former immigration minister Brendan O’Connor saying that more than 10,000 foreign workers were “rorting” the system.

But a qualitative study, led by ECU’s Professor Rowena Barrett, found no evidence of rorting among the 10 managers and 20 employees using 457 visas interviewed.

Instead, it found that the war for talent in the WA resources sector had created unrealistic pay demands among local workers, making smaller firms (most of those in the study had under 200 workers) an unattractive employer.

“We find people have grown with the boom and they have all of a sudden become prima donnas and they only work for these high wages,” said one manager at an engineering firm, a concern echoed by many of the others interviewed in the study.

Another common theme was inexperienced workers who nonetheless demanded vast salaries.

“You have people who would do just, like, a two-day course and think that they could just jump into one of our roles and charge, you know, $200,000 or $300,000 for themselves,” said a manager of a project management company.

Nonetheless, employing people from overseas can be an expensive and time-consuming task.

One employer said they themselves went to Manila to interview and test the skills of their potential workers.

Another booked a hotel room in Ireland for weeks to interview, shortlist and test the hundreds of applicants it had for its advertised positions.

“All up, they didn’t save a lot of money,” Rowena Barrett, the study’s lead author, told SmartCompany.

“All these employers would have employed Australian workers if they could get them.

“But they just couldn’t get hold of them. They’ve tried. Many have advertised quite extensively, and to great expense, in the eastern states. But they just couldn’t get the people they wanted into their business.”

This inability to attract qualified staff affected the businesses’ ability to grow.

“If these businesses can’t get people – be they Australians or, as a last resort, 457 visa holders – they can’t grow their businesses, and they can’t do business.”

For the 457 visa holders, many took the jobs largely because they wanted a job in Australia.

“Western Australia’s been promoted as such a gold mine of opportunity,” Barrett says. “Many people want to come, and most of them want to stay.”

After two years on a 457 visa, workers are allowed to apply for permanent residency, which many had their eyes on, she said. Recent political debate around immigration, however, had made the visa holders interviewed feel less welcome.

“These people hadn’t experienced any particular discrimination at work. But they had a sense of the negative debate. They felt singled out, even though they were here legally and were doing a job. It made many of them feel a bit uncomfortable.”