How will Abolishment of Visa 457 Affect HR

The abolishment of the Visa 457 program earlier this year is definitely the biggest political decision that will have impact on Australian HR in a long time. In case you haven't heard, Prime Minister Turnbull announced the abolishment of the program in April, replacing it with the Temporary Skill Shortage visa. It goes without saying that the decision caused uproar from both sides – the proponents of the abolishment and its detractors.

However, what does the abolishment actually do, how will it affect the Australian workforce and Australian HR professionals?

The Technicalities

In order to understand the impact that this decision will have on the Australian job market and HR professionals, we need to cover the basic technicalities of the decision.

First of all, the new Temporary Skill Shortage visa comes in two variants – the short-term two-year visa and the medium and long-term four-year visa. It is unclear whether the longer variant will be able to be parlayed into permanent residency like Visa 457 was, but it is clear that the short-term temporary skill shortage visa will not allow for this possibility.

In addition to this, the decision also removes more than 200 occupations from the list of jobs that could be filled by employees from abroad. Among these are traders, butchers, photographers and web developers, just to name a few.

It will also be more complicated for companies to sponsor foreign employees and it will become more difficult for those potential employees to qualify for this new visa program due to stricter requirements.

This article from Rigas Law goes into more detail about the various ins and outs of the decision, speaking from a more legal aspect.

Attracting Talent

One of the points of visa 457 was to mitigate a talent shortage that exists in certain industries in Australia. It allowed companies to relatively easily solve the legal status of their foreign hires. A very important part of this was the fact that visa 457 could easily be transitioned into more permanent solutions and even citizenship. This has been a great incentive for top talent that would have otherwise gone somewhere else.

The new visa program, for one, makes it impossible to even consider about sponsoring foreign talent as it does not include more than 200 occupations that used to be on the list. Since it is unlikely that the new program will allow for transition to permanent residency, it will further weaken the position of Australian companies' HR departments who used this to sweeten their offers.

What about Retention?

Many HR professionals started immediately worrying once they heard about the government's decision, fretting for the employees that work in their companies under the provisions of visa 457. The good news is that the decision is not retroactive and that it will not affect workers who are already in Australia as visa 457 holders.

The biggest issue that still requires clearing up is whether employees who work in Australia under the visa 457 provisions will be able to speed up their permanent residency visas or will they fall under the new regulations, which are still unclear whether we are at it.

Added Financial Burden

An additional aspect of the government's decision is the fact that companies which decide to sponsor foreign workers under the new program will also have to pay the government a pre-set sum that is supposed to go towards retraining Australian workforce.

The idea is not inherently a bad one, but it does feel like more of a political decision than anything else. It will also put further financial pressure on Australian companies that wish to hire foreign workers. This will definitely make HR's job more difficult,  as they will need to explain additional costs to their companies' decision-makers.

Instead of a Closing Word

Visa 457 was not perfect by any standards. Some companies used it for truly unsavory practices. That being said, the new decision feels more like a voter-endearing move than anything else. It changes very little and only complicates things for the purposes of winning the hearts of a certain type of voter. On top of all that, it does virtually nothing to curb potential future cases of program abuse.

When HR professionals are concerned, the decision will most probably make their lives harder, especially in certain industries.

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