SMALL firms in Western Australia’s resource industry have cited workforce instability driven by untenable wage demands and stringent competition for skilled labour as reasons for turning to 457 visas to fill vital skills shortages, in a new study released early last week.

According to the Recruitment and Selection of 457 Visa Workers by Smaller Firms in the Western Australian Resources Sector: Practices to Drive Firm Growth research paper compiled by Edith Cowan University, small employers in project management, engineering, trades and exploration have become increasingly dependent on 457 visas as wages and competition for Australian skilled workers continues to skyrocket.

While conceding that it costs more to recruit a skilled from overseas than locally, the Edith Cowen report noted that small firms were experiencing great difficulty in retaining Australian talent as the lure of big wages and career progression sees workers change employers regularly.

“In Western Australia, investment in resource sector projects has increased competition for skills, and compensating fly-in-fly-out employees for working in regional and remote areas has raised expectations of pay and employment conditions,” the report said.

“Employers generally experienced instability in the domestic workforce driven by expectations of increased pay; there was a view that employees were prone to changing jobs even for small pay increases and lacked loyalty and commitment to their employers.

“The unreliability of domestic workers was seen as undermining business growth and compromising the ability of (small) firms to meet their contractual obligations.”

Lead author, Professor Rowena Barrett, said the report interviewed both employers and employees taking advantage of the 457 visa program and exposed no evidence of rorting, as suggested in earlier political debate.

“The managers we interviewed connected their firm’s survival and growth to their ability to employ 457 visa workers, as they could reap a short-term competitive advantage for their firm,” she said.

An example from one of the 10 employers surveyed indicated skilled foreign workers facilitated the procurement of new contracts, highlighting the economic importance of a temporary skilled migration program that accommodates smaller organisations.

“The cost of living in WA is a major disincentive for workers so any expansion of the 457 visa system needs to be careful so that further costs are not imposed on firms and workers, “Ms Barrett said.

“Any likely expansion under the new federal government needs to ensure the program also benefits smaller firms.”

To read a copy of the report, click here.