Proposed reforms to Australia’s migration system promise to target skills gaps and simplify the visa and sponsorship process. Here are the key changes HR should be aware of and how to prepare for them.

In a move to tackle Australia’s “broken” migration system, the Albanese government has released a new 10-year reform strategy to ensure migration works in the best interests of both migrants and employers.

Announced in December last year, the strategy will focus on five core objectives: raising living standards, ensuring workplace fairness, building stronger communities, strengthening international relationships and making the system fast, efficient and fair.

Measures to achieve these outcomes include the introduction of new visa pathways and a new, evidence-based approach to identifying skills needs, both of which are due to be implemented in late 2024. 

The government has also committed to ongoing integrity measures in international education and the introduction of new legislation to combat worker exploitation, which will come into effect mid-2024 pending the passage of legislation through parliament. The legislation will include new powers and large penalties for employers who engage in exploitation.

“The existing system has had changes and modifications made over time without putting all of those pieces into a much broader, more coherent strategy,” says Angela Knox, Associate Professor of Work and Organisation at the University of Sydney Business School.

“That’s the biggest change with this new policy – it approaches migration in a much more coherent way.”

What issues are these changes trying to address?

Since Australia’s borders reopened in early 2022, the nation has seen a significant increase in overseas migration. In the 12 months to 31 March 2023, net overseas migration added 454,400 people to the population, accounting for 81 per cent of growth, according to ABS data. This uptick was attributed to a “catch-up effect” after extended border closures during the COVID-19 pandemic. 

One of the objectives of the proposed reforms is to return migration to pre-pandemic levels by the next financial year. Looking further ahead, the 10-year roadmap aims to build a more strategic approach to migration that ensures the right skills end up in the right places.

“[Previously], the list of areas where temporary migration visas could be applied for was extremely wide-ranging, and it certainly didn’t appear to have any evidence behind it,” says Knox. “The new policy is going to be evidence-based. There’s [also] going to be an overhaul of the occupations that will be part of that list.”

“The process is supposed to be a lot easier and more transparent, which will be great for businesses. It will also offer them a better mix of temporary and local labour.” – Angela Knox, Associate Professor of Work and Organisation at the University of Sydney Business School

As well as reshaping temporary migration to address skills needs, the roadmap also promises an overhaul of permanent skilled migration via the new ‘Skills in Demand’ visa, a four-year work visa designed to improve worker mobility and make it easier for employers to sponsor migrant workers to stay in Australia permanently. This visa is due to be introduced later this year.

“[This is] a really positive change from this new policy,” says Knox. “We know the value of our skilled migrants, and that value only increases as they spend time in Australian workplaces. It’s unfortunate to lose that capital that’s built up when migrants are unable to apply for permanent residency.”

She stresses that the changes are a response to the needs of migrants as well as employers. A core target of the new strategy is to tackle exploitation of migrant workers and misuse of the visa system.

“[Exploitation] has been quite common in the areas of hospitality, cleaning and care work – areas where the jobs certainly could be of higher quality,” she says. “And because they are of low quality, it tends to be migrant workers who are channeled into them, because locals aren’t interested. And [locals] are often able to get opportunities elsewhere because they’re connected and they have the information and the resources and the contacts to move into better jobs. 

“Many of our migrants don’t have those resources. They don’t have the networks, they don’t necessarily have the education or the information. And they are being targeted by some more unscrupulous employers in those kinds of industries.”

How will migration reform impact employers? 

The piecemeal nature of Australia’s current migration system can make engaging a migrant worker far more complicated for employers than it needs to be, says Knox. Recognising this, the government has taken measures to streamline the process – for instance, the new strategy promises to remove 20+ unnecessary and duplicative visa types from the system. 

“The process is supposed to be a lot easier and more transparent, which will be great for businesses. It will also offer them a better mix of temporary and local labour.”

Employers are also likely to benefit from reforms to the education system for migrant workers. As part of the new roadmap, English language requirements will be increased early this year to improve the quality of students’ educational experience. The introduction of a coordinated, evidence-based approach to identifying skills requirements later this year will also ensure that education is targeted towards the skills Australia is most in need of.

However, Knox warns employers against assuming that the bolstered education system will be sufficient to plug skills gaps among their workforce.

“There wouldn’t be a single organisation that doesn’t have a huge amount of firm-specific skills that new hires need to learn, so they can’t rely on the foundational skills provided by the system exclusively,” she says.

From a bigger-picture perspective, the migration strategy is intended to function alongside measures introduced by the government’s Working Future employment white paper to improve Australian living standards and speed up growth. 

According to the roadmap, a more targeted migration system will be critical to gaining the necessary skills to support Australia’s ageing population and its transition to net zero. 

“I would like to think that this policy will be a great way in which we can address those issues and spur productivity, innovation and wage growth, while also ensuring that we are creating a quality of job that is equally accessible to local and migrant workers – and not using migrant workers to race to the bottom and erode the quality of jobs,” says Knox.

How should employers prepare for the changes? 

While many of the reforms are designed to make life easier for employers, Knox advises HR to take preemptive steps to ensure their organisations can get the most out of the new policy and evolve alongside it. This mostly comes down to workforce planning, she says.

“[Workforce planning] can very easily fall between the cracks with everything else going on, and with HR constantly firefighting issues that pop up.

“If [HR] has been neglecting workforce planning, now is a great time to have a really strategic look at [it] and deploy human resource information systems to start or continue their strategy into the future – [that means] identifying the kinds of skills they need, when they need them and where they need them, so they can immediately progress that as the new policy starts to become active.”

By embracing the reforms as a means to accelerate growth, productivity and innovation, HR can champion the move towards a more resilient future for Australia’s workforce.

“[It’s about] making sure that we not just maintain minimum standards and rights, but continue lifting them as there is need to do so.”

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