While decision-makers, including Prime Minister Anthony Albanese, meet this week to figure out how Australia can solve our skills and worker shortage crisis, there is a relatively simple solution that’s right under their noses.
The latest ABS data reveals 480,100 job vacancies in Australia, sitting alongside a record low unemployment rate of 3.5 per cent. This equates to what’s called full employment, meaning that almost all Australians who want to work are already in jobs.
Options presented by various interest groups to solve staff shortages include education reform, skilled migration and increasing female participation. Each has merit, however, concerns remain surrounding the timeline, complexity and pressure on existing infrastructure are being voiced when it comes to these options.
So what if I tell you that there is a solution onshore? A solution in the form of people who are already living in Australia, have settled into the community fabric, possess legal work rights in Australia and are highly educated – in fact by local Australian institutions.
The solution is already here, in the form of international students and graduates.
Currently, there are more than 470,000 international students in Australia, a slight drop from the 760,000 we were home to before the pandemic hit. The most popular fields of study in higher education are management and commerce, IT, engineering, health, science, among others.
The figure above does not include the additional students in the skill sectors like culinary, construction and personal services. Every year, thousands of highly skilled, local students complete their training and receive unlimited post study work visas of two to four years (depending on levels of qualification). The post study work visa is designed to allow Australia to make the most of these highly skilled individuals. But sadly, that has be to little effect to-date.
Last year, the full-time employment rate of international graduates was 43 per cent compared with 69 per cent for domestic graduates, a whopping difference of 26 percentage points. Anecdotally, among those who gained full-time employment, a significant proportion were underutilised in sectors and roles that do not match their skills, ability and qualifications.
So, what is driving this disparity? How can we capture these missing skills? I have two simple suggestions.
The first is about post study work visas. Currently, the processing of the complimentary 485 visa is taking up to eight months. I don’t know anyone who can survive without an income for that long. This poses a massive hurdle for graduates who want to take up real job opportunities. To fill this skill shortage, the Home Affairs Minister also has the option of simply increasing the length of stay for visa holders.
The second opportunity lies in company policies. Employers, especially large firms, tend to have a condition of ‘citizens or permanent residents only’ on job advertisements. A condition that makes little sense in practice, despite the common idea that investing in international workers is a risk.
OECD data showed that 40 per cent of Australians aged 20-24 have a job tenure of less than 12 months; a figure that only slightly decreased to 30 per cent for Australians aged 25-29. Taking into account the loyalty that international graduates have towards their employers (ironically due to a smaller set of options), hiring them is less risky. A simple reason is that many employers are not familiar with the unlimited post study work visa, or have not gone through to change their company policies.
These two actions will take fewer efforts, lower costs, and shorter timeline to implement – compared to other options on the table – but the return would be significant. If we increase the employment rate of international graduates just by 26 percentage points to match that of domestic graduates, that is nearly 40,000 more skilled workers for Australian businesses to benefit from every year – immediately.
It’s time to capture the skills that Australia has grown and trained, and provide international students with the opportunity to increase their participation in Australia’s post-pandemic recovery.