Old ideas undermine the economic benefit of skilled migrants

Andreas Cebulla and George Tan

Are employers stuck in the past with outdated and unreasonable perceptions that are working against skilled migrants finding employment? Are the same employers disregarding migrants as candidates for positions when they have, proportionately, higher qualifications than the local population?

These questions emerge from an analysis of skilled migration to South Australia between 2010 and 2014 undertaken by the South Australian Centre for Economic Studies (SACES) and the Hugo Centre for Migration and Population Research (Hugo Centre), both based at the University of Adelaide.

The results of this analysis – which have just been published as Economic Issues #52 by SACES – shows that South Australia is missing out on the full contribution to the State’s economy that could be made by skilled migrants.

The research builds on earlier work by the Hugo Centre (for the former Department of State Development) of the 7,440 people granted visas under the State’s General Skilled Migration (GSM) scheme between July 2010 and December 2014. Under the GSM, the South Australian Government sought to lift the State’s skills base by encouraging migrants to apply for various visa categories and nominated occupations.

Economic Issues #52 focuses solely on the employment experiences of skilled migrants using weighted survey data enhanced with more detailed occupational and employment outcome data, and previously unused accounts of the challenges that migrants reported about obtaining employment in South Australia.

GSM migrants were disproportionately male (69%) and the majority (62%) were aged between 25 and 34 years. The top five places of origin were India (27.8%), United Kingdom (12.1%), China (8.1%), Pakistan (5.8%) and Sri Lanka (5.8%). Seventy-nine per cent of the GSM visa holders held a bachelor or higher degree compared with 23.4% of South Australians of comparable age.

Despite their high levels of qualification and occupational status, not all GSM migrants to South Australia were able to obtain work in the state, although those that did, did so relatively quickly, but not necessarily in their assessed occupation. Close to half (44%) of those in employment or self-employment ended up working in an occupation or field other than the one nominated in their visa application.  Furthermore, more than half of those in work (53%) were employed at a level that they felt was below their previous overseas experience and/or qualification, frequently working casual (19%) or on time-limited contracts (20%).

A closer look at the more prominent occupations reveals a particularly high level of mismatch among migrants with assessed business, human resources or marketing occupations, specialist managers and also design, engineering, science and transport professionals. In all instances, not finding employment in the nominated occupation was the main factor in the mismatch, whilst business, human resources and marketing professionals were also likely to feel over-qualified in their job.

So, what causes such mismatches in the labour market for skilled migrants, particularly when two of the main visa categories (subclass 190 Skilled Nominated Permanent and subclass 475 Skilled Regional Provisional) require nomination by the State Government or family sponsorship?

Given an opportunity to name and describe the challenges they had experienced in finding paid work in their own words, GSM visa holders produced a rich list of personal and institutional barriers to employment as many respondents took this opportunity to provide often detailed accounts of their personal experiences.

The most frequently mentioned barrier, reported by 43% of all GSM migrants, was the expectation on the part of employers that the job seekers should have local work experience. Related to this, GSM migrants also noted that employers were expecting local references (5%), which they typically were not able to provide. A third group of experience-related barriers include a lack of skills recognition or of local licences or tickets, which were identified by 12% of migrants.

Almost a third (30%) felt that there were too few jobs available in the state for the number of job seekers, whilst one in ten (10%) felt that discrimination had played a role in the difficulties they had experienced in securing employment.

GSM migrants also felt that employers preferred or required job seekers to have Australian citizenship or, as a minimum, permanent residency. Overall, seven per cent of GSM migrants expressed this view, but this increased to 13% of those on provisional skilled visas.

Personal obstacles to securing employment were mentioned less frequently, but included insufficient language skills (8%) and lack of familiarity with the job application process in Australia (1%).

In summary, migrants attributed the challenges they faced in the State labour market to a slack economy and a reluctance of employers to hire people with no local work experience and with whose skills and qualifications they were not familiar.

At a time when South Australia, and Australia more generally, needs skilled migrants making the most effective and productive contribution to the economy that is possible, it seems somewhat anachronistic to continue to judge potential employees by their local experience and references. By definition, as recent arrivals, they are not in a position to provide such information.

It’s time for a rethink on how employers approach the hiring of migrants. Options could include making use of multicultural, council and business networks to connect migrants to the SA community and its economy, facilitate introductions and foster understanding of qualifications and the transferability of skills. Employers could then rely on their own judgment that is better informed than a cursory glance at a curriculum vitae would allow.

Migrants, businesses, and the economy would all be better off.

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