457 visa changes to hurt start-ups

Australia’s tech community has warned of an acute staff shortage across the sector.

Expert 360 CEO Bridget Loudon says 457 visas have been responsible for much of her start-up’s growth. Source: Supplied

The Turnbull government’s move to can the 457 visa program is making Australian technology businesses nervous with the start-up community in particular worried by the prospect of an acute staff shortage.

While the 457 program is used across all industries, it’s particularly important for the technology industry. StartupAUS boss Alex McCauley told The Australian talent is one of the key pillars on which any successful start-up ecosystem is built, and Australia’s start-ups need access to the world’s best talent.

“They need that access now, what we need is certainty, Mr McCauley said. “Certainty is really important in this space, there will be employers right now having conversations with extremely talented people in high demand around the world and every day we don’t know whether we can hire these people is a wasted day.

“We need the detail clearly spelled out.”

That sentiment was echoed by CEO of Sydney start-up Expert360 Bridget Loudon, who said it was hard to predict the impact of the change but it would be safe to say some start-ups would be forced to move their headquarters to the US or Europe.

“The talent gap in Australia is a major concern for businesses and this move simply creates more uncertainty for skilled workers who might have considered bringing their talent to Australia,” Ms Loudon said.

“While top global talent is in the making in our schools and training programs, there are still shortfalls that sponsored workers have helped fill, particularly in the technology sector.

“In fact, 457 visas have played a big part in helping us grow so significantly over the past four years and it would be a shame if other high-growth businesses would not be able to achieve that same level of success because of these changes.”

Atlassian co-founder and co-CEO Mike Cannon-Brookes, whose tech company is worth more than Qantas, told The Australian 457s were “essential” for Australia, and that any move to make bridging the talent gap more difficult would be bad for the country.

“We’ve got about 1000 people in Sydney, and about 25 per cent of the Australian staff are on 457s, maybe a bit over that,” he said in an interview.

“What we lack is experience. The biggest thing we lack is senior technical talent with deep experience in the volumes that we need for the industry to keep growing. Every single start-up has very similar problems once they start to scale. And the biggest gap the 457s fill are the people that come in — the guys and girls who come in — have spent 10 years in a Silicon Valley company or a great European company and they come in and train the grads.”

According to industry body IT Professionals Association (ITPA), while the overall number of 457 visas issued over the last decade (excluding IT) has risen by just 2 per cent, over the same period there has been a 136 per cent rise in visas issued for IT workers.

“The ITPA has no issue with local IT organisations using 457 visas if they are genuinely unable to find suitable local candidates”, said Martin Hale, Director at ITPA, an independent industry body representing over 7000 members who work in Systems Administration and IT Support.

“What we are concerned about, however, is that many local IT organisations appear to be using 457 visas to hire international staff to work in entry level IT Support positions rather than hiring and developing local graduates.”

IT support roles have traditional dly served as the main means for IT graduates to get their foot through the door and ITPA maintains that 457 visas have diminished their chances and subsequently led to a fall in the number of students studying IT degrees over the last decade.

This slump has been identified as a major contributor to a skills gap that Ovum analyst Kevin Noonan said will take a long time to fill.

“The real challenge for our technology sector is that we have a very small pool of local talent,” he told The Australian.

Apart from shortage of personnel Mr Noonan added that the needs of the market, be it big corporates or start-ups, are constantly changing.

“Start-ups will feel these shifts the most but large corporations who have committed to significant technology investments might have to reconsider their plans as well.”