Hiring Overseas Employees

By The Sponsorship Mythbusters Team

Ana NorteMarlon OrnekFelipe ReyesJose Ignacio Urenda

What will we cover today?• Is there a skills shortage? Examples:

• Mining Industry• Oral Health Industry

• One short term-solution (visa 457)

• Employers • Current sponsors• Unwilling to sponsor

• Overseas Employees:• Why they come• Why they stay• Why they leave

• Our findings

• Recommendations• To HRM• To Government

Australian Mining Opportunities

NSW Residential positionsClose to SydneyGreat lifestyle/ career development opportunity

We have an excellent opportunity for 2 degree qualified mining engineers to join a Technical division of an international Mining & Engineering company. Located in the NSW Hunter Valley an attractive area 2 hours drive from Sydney, close to lakes, vineyards and sandy beaches. We seek qualified mining engineers with mining experience, the desire to study further as well as undertake a variety of engineering and mining project related tasks. These positions are offered due to continuing growth of the business and the desire to develop the technical and commercial strength of the group.The main purpose will be to develop Mine designs, plans and production schedules to meet the requirements of the company in the NSW Hunter Valley and will include exposure to other project opportunities in Australia.

Key Responsibilities:Ensure planning and design work incorporates requirements of Mine safety and Environmental Plans;Contribute to the development of people & leadership strategies Develop Mine designs and schedules in accordance with operational specifications; Carry out engineering projects and provide recommendations or alternative courses of action;Identify improvement opportunities on operations and make recommendations to project managers;Maintain cordial relations with clients, and relevant consultants;Provide assistance to projects on complying with tender specifications;Conduct risk assessments. Identify and review relevant new methods or techniques to improve mining operations and make recommendations for implementation.

Requirements:Degree in Engineering – Mining or Civil Minimum 4 years Mining operations ExperienceMust be able to read and write English Be a confident communicatorAble to learn and adaptPlanning and Organizing skillsComputer literacy with Mine Planning software The company manages a number of metals and coal operations across Australia and Asia and is growing internationally. The opportunity exists for you to develop your exposure to Australian mining methods as well as undertaking further post graduate education. The tenure offered is for 2 to 4 years and may lead to permanent depending upon individual career aspirations.

In the first instance please call Matthew Mitchell on 02 8247 5444 or 0416027694, or forward details to syd@carmichaelfisher.com.au quoting Ref 8396/MSM.

Source: Trade Commission of Chile,

NSW Austrlaia, pro|CHILE

Skills shortage is a fact!

Mining Industry

An advertisement for posting in leading newspapers in Santiago, Chile

Australian Search and Selection

Carmichael Fisher is a boutique Search and Selection company with offices located in Sydney, Melbourne, Dubai and London. Significant hallmarks of our company include attention to customer service and the depth of experience of our consultants, many of whom have worked in this sector for 10 to 20 years.

We have a very strong international client base with specialty practices in:

• Banking • Finance• Legal• Mining and resources

We seek to do more bilateral business in Chile, supporting Australian companies operating in Chile as well as providing opportunities for Chileans to do further study and gain mining sector experience in Australia.

To do this we would like to make contact with similar boutique style customer oriented search and selection companies or experienced Chilean search consultants who could partner with us. More company details can be seen at www.carmichaelfisher.com.au

In the first instance please call Matthew Mitchell on 02 8247 5444 or 0416027694, or forward details to mmitchell@carmichaelfisher.com.au.

Source: Trade Commission of Chile,

NSW Austrlaia, pro|CHILE

Is there a skills shortage? (example 2)

Oral Health Industry: Dentists

“The shortage of dentists in parts of rural NSW is so acute that numbers are less than one-third the average for the Organisation for Economic Co-operation and Development.

In some country towns there are simply no dentists.” Associate Professor Hans Zoellner, chairman of the Association for the Promotion of Oral Health, Feb 16, 2005

“Federal and state governments had failed to ensure there were enough trained dentists to cope with the population’s health needs.

Professor Eli Schwarz, Dean, Faculty of Dentistry, University of Sydney, Feb 16, 2005

• For employers who would like to employ overseas workers to fill nominated skilled positions in Australia for between 3 months and 4 years (temporary residency)

One short term solution! Business sponsored visa (457)

Visa Subclass 457Stages

Only possible to sponsor occupations in demand (on the lists):

• Migration Occupations in Demand List (MODL) • Skilled Ocupations List (SOL) and • Sydney and Selected Areas Shortage List (SSASL)

• List those occupations and specialisations identified by the Department of Employment and Workplace Relations (DEWR) that are in short supply. Reviewed and updated twice a year.

3 stages to complete for a work visa to be granted to an overseas employee1.Sponsorship2.Nomination3.Working Visa Application

Visa Subclass 457

DIMIA annual report, 2005-06 – Information refers only to temporary resident visas (457)

457 holders by occupational group

Adapted from Khoo et al, 2004

Employers – current sponsors (1)

• Almost 10,000 registered sponsors in FY2005-06 (Dimia annual report 2006)

1.2% of a total of operating businesses in Australia (ABS, 2005)

• 60% of located in Sydney

• Across different industries and occupational groups

Khoo et al, 2004

Employers – current sponsors (2)

Reason % of employers

Required skills difficult to obtain in Australia 89%

Need people to train others 57%

Sponsorship suits company's policy 40%

Require people at very short notice 26%

Foreign workers more committed to the job 22%

Visa conditions provide a higher level of control 12%

Sponsored employees have a lower cost 9%

Adapted from Khoo et al (2004)

Reasons for hiring a 457 visa holder rather than an Australian resident

• 70% of current employers-sponsors expect to sponsor more employees

Employers – non sponsorsWhy most employers are unwilling to sponsor

overseas workers (457)

• Bureaucracy• Application procedure (to become a sponsor) is a

complex and onerous process (unfamiliar with the process)

• Costs• Misinformed about total application costs – actual

normal costs - $525

• Obligations

(source: http://www.immi.gov.au/employers/index.htm)

Employer Obligations

• With sponsored employment, the Employer has certain obligations and undertakings to abide by some of which are:

• Payment of medical expenses• Repatriation costs• Complying with Australia's Immigration laws• Employing law-abiding persons• Staying in contact with the DIMIA• Complying with workplace relations and agreements• Ensuring that employees are appropriately licensed

Reducing the risks (medical expenses)

• Ways to address these problems within the framework of the four pillars of a risk management policy are considered below:

• Avoid Risk: not possible under a 457 visa sponsorship agreement. • Reduce Risk: careful medical screening• Retain Risk: sponsor to take out the insurance policy to cover

employee medical expenses• Transfer Risk: ensure that the employee has hospital cover

Source: Australian Health Insurance

Overseas employees: a successful example – difficult process

“some companies may be hesitant or reluctant to provide sponsorship. However, the larger firms will often have an established process of providing sponsorship to what they perceive as good and capable candidates or specialists. In general, the process could easily be characterised as frustrating or discouraging...”

Martin Ivanov (Norway), MGSM 2006 Cohort. Currently employed as a Lawyer at Macquarie Bank

“After some unsuccessful applications and speaking with recruiters I realised that they only help if they see a chance to place you and that was difficult because I required sponsorship.”

“I would say that Australian companies are conservative and although they have a tight labour market they are very reluctant to sponsor someone who does not have Australian work experience.”

Holger Nurmrich, (Germany) MGSM 2006 Cohort. Currently employed at Expedia.com

Overseas employees: a successful example – difficult process

Overseas employeesWhat motivates them to come to Australia?

Adapted from Khoo et al, 2005

Overseas employees What motivates them to stay?

Adapted from Khoo et al, 2005

Overseas employees What makes them leave? (1)

• “Foreigners (457 visa sponsored) are treated as second class citizens, levied the same taxes, yet completely unable to receive benefits derived from taxes” Complaint of 457 holder in Khoo et al, 2005.

• "…the process of attaining a permanent visa was arduous and longwinded, to put it mildly… the permanent visa process only lends itself to those of strong will and requires major review if Australia wants to continue to attract the right quality and calibre of migrant.“Current previous 457 holder who is now permanent resident in Khoo et al, 2005.

Overseas employeesWhat makes them leave? (2)

Should they leave – different opinions!

• There is an enormous amount of sense in actually concentrating on 457 visa class people, people who are here for just a little while and we basically get their upside.

in Richardson, 2002 - Migration Myths and Realities

• Is this positive for companies (HRM)?• High turnover• Re-training costs• Transaction costs

Our findings• Some recruiters do seek employees overseas, but most

employers are usually badly informed and not willing to sponsor.

• Risks of sponsoring CAN be minimized

• Not all employees find the grass greener in Australia

• 457 visa (temporary business stay) is a short-term solution. It’s sustainability is enhanced by further stay of the employees.

• The great challenge is to assure that temporary residents have a positive experience in Australia so that they wish to stay!

• It’s not just about money, it’s also about • identification, • cultural fit and • feeling of belonging!

• Both companies and government play a role in creating a more sustainable process.

Recommendations to HRMWhat can HR do to ensure that 457 holders have a

positive experience in Australia?

• Develop a multicultural corporate culture within the company

• Provide support in settlement, house and school search, community info, etc…

• Develop “sense of belonging” through HR monetary and non-monetary incentives

• Use informal communication to monitor levels of satisfaction

• Provide support in the process of obtaining PR• Put pressure on the government to improve

conditions for temporary residents

Recommendations to Government

What can the government do?

1. To increase businesses willigness to sponsor Inform businesses of the 457 program advantages and

obligations and also how to reduce the risks.

2. To motivate skilled temporary residents to stay and become permanent residents Provide better support to temporary residents, eg. Medicare access after 1 year, banks to provide credit card.

To Fast-track the permanent residency application process (if they already have the information, they should be able to access it)

• Questions?