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Why the Skilled Occupation List Review is an Opportunity and a Threat

Skilled Occupation List Review

The government has recently announced a review of the Skilled Occupations Lists (‘SOL’) used for the 482 visa, which supports access to skills in shortage in the Australian economy. The review will assess and determine which occupations remain eligible for sponsorship and whether occupations will be available on the ‘Medium & Long Term Skill Shortage List’ (MLTSSL) and ‘Short Term Skilled Occupation List’ (STSOL), or the geographically restricted ‘Regional Occupation List’ (ROL).

The reviews pose a recurring risk for employers who engage overseas workers through the 482 visa program. Not only will any changes determine an employer’s capacity to attract and retain foreign talent, but they also pose risks by way of commercial and legal compliance.

This article will present a condensed analysis of how the SOL Review is conducted by way of methodological processes and legal outcomes, before appraising the relevant impacts for business. The takeaway then is that while the SOL review broaches various threats to businesses, knowing how to effectively navigate this framework is an opportunity that can be maximised.

What is the Skilled Occupation Review?

Context

The division of the SOL into the Medium & Long Term Skill Shortage List (MLTSSL) and Short Term Skilled Occupation List (STSOL), with the additional Regional Occupation List (ROL) means that the SOL Review has the capacity to remove or add occupations from each category.

Below is a projected timeline of the upcoming SOL review, as per the Department of Employment. [1]

DateDescription
4 September 2019Commence review
Commence consultation
December 2019Publish Traffic Light Bulletin outlining outcomes of initial labour market analysis, stakeholder consultation and views from across government. The purpose of the Traffic Light Bulletin is to identify which occupations have been flagged for a change in status on one of the lists

Formal submission period opens
February 2020Formal submission period closes
March 2020End review

Review Methodology

The review process involves several stages:

  1. Labour market analysis
  2. Stakeholder submissions and engagement
  3. Data analysis
  4. Recommendations

In a  ‘transparent’ and ‘data-focused manner’, assessments will be made using key primary and secondary datasets and frameworks. Primary factors involve datasets that are comparatively statistically reliable and available for most occupations, whereas secondary factors involve data not available for all occupations, or that which are less materially relevant from a labour market perspective. Overall, this includes, but is not limited to: [2]

  • Primary:
    • Skilled migrant employment outcomes
    • Extent of reliance on temporary visa holders
    • Employment growth projections
    • Skill vs Education Attainment
  • Secondary:
    • Graduate and apprenticeship outcomes
    • Vacancies
    • Australian national skills shortages data

Originally, the Department of Employment published draft methodology for the provision of advice on the composition of both the short and medium/long term skilled migration lists and outlined their responsibility for the continuous refinement and review of these lists every six months. Public consultations, alongside the release of the Traffic Light Bulletin, ousted this system as of October 2017.

The review’s purported flexibility lies also in its ability to incorporate new datasets, and create new ANZSCO codes, while caveating changes. Further, the use of the Traffic Light Bulletin provides signals as to which occupations may move lists; ideally, this creates preliminary findings that are supposed to aid the consultation process.

Specifically, the Traffic Light Bulletin will use the following signals, as per the Department of Employment: [3]

Colour Significance
GreenOccupations where the initial labour market analysis suggests no change is likely
OrangeOccupations which may move from MLTSSL to STSOL
YellowOccupations which may move from STSOL to MLTSSL
RedOccupations which may be removed from STSOL and/or MLTSSL altogether
BlueOccupations which may be added to STSOL and/or MLTSSL having been previously removed

The Department of Employment asserts that no primary or secondary factor is determinative, and that an occupation is only identified for change on the traffic light bulletin where multiple factors may be engaged.

Moreover, after all data is obtained, a points system is implemented, where higher points are awarded in circumstances indicating the occupation requires further analysis, or it is contentious from a labour market perspective.

Legal Outcomes

The most obvious legal issue for organisations is the fact that an ever-changing occupation list impacts a potential employee’s eligibility for a visa. It should be noted that the Traffic Light Bulletin on possible changes to the SOL is for consultation purposes only and does not represent a formal decision of the Government. Feedback can therefore be put forward until February 2020 before any legal outcomes are set in stone.

The final outcome of the review rests with the Minister for Home Affairs deciding on the composition of the SOL. Legislative instruments are updated on the SOL page on the Department of Home Affairs website, and the Department of Employment publishes public submissions and attachments online.[4]

Following the final decision by the respective Minister any legislative instruments will typically contain transitional provisions so that the change in SOL will not adversely impact certain applicants (either extant or ‘current’). However, this does not necessarily apply for prospective applicants, who may have to reconsider their options.

How will it impact businesses?

Skilled Migration is imperative to commercial and operational effectiveness. Businesses of all sizes, international or domestic character rely on overseas talent to drive their business needs. From international transfers, to the need to source skills and experience that are unavailable locally, and filling difficult-to-fill roles, expediting this process is significant for many organisations.

The removal of pathways to permanent residency for many occupations given the division of the SOL makes attraction and retention of overseas talent more challenging. To expatiate, high-level roles requiring executive skills, innovation, proprietary knowledge, and experience are less attractive if residency prospects and the Australian lifestyle are not on offer. Moreover, where the visa duration is restricted to a maximum of 4 years (especially through a 2 x 2 year visa period), many prospects will choose not to migrate to Australia if there is the risk their occupation’s eligibility for permanent residency could be undermined. Finally, the age limit of 45 will also restrict the amount of high level talent, especially where certain higher level occupations naturally need to be filled by prospective employees above this age threshold.

As changes to the SOL may limit access certain occupations in the subclass 482 TSS visa program, organisation should consider the benefits of other skilled migration programs such as Labour Agreements, regional visas, the Global Talent Scheme, or DAMA. These programs provide greater flexibility, the complexity and cost of the program mean that they will often only be appropriate after it is determined the 482 program is not appropriate.

Maximising opportunity in light of risk

As an organisation, it is more productive to be proactively involved in the review process. Steps that should be taken include:

  • Identifying occupations in use, as well as any future needs.
    • Monitoring SOL review to identify potential risks (Traffic Light Bulletin Release)
  • If submissions are required, identifying potential partners for submissions.
  • Identifying potential data sources, gaps in data sources, etc. in your favour
    • Also be sure to identify that which is contrary to your interests, and rebut them.
    • If necessary, engage with external statisticians, industry experts, etc.
  • Identifying other policy arguments (public interest, economic benefit, etc)
  • Preparing submissions individually and/or collectively
  • Offering to appear
  • Engaging behind the scenes

Organisations and peak bodies themselves will often be better placed to assess the nuances of concomitant occupations within the SOL changes and the Traffic Light Bulletin. To illustrate, these nuances could include a fundamental misunderstanding of roles within the broader occupation grouping, or even specific qualifications needed.[5] Further, where it is thought that the Government has relied upon data which stakeholders have not had an opportunity to review, this reinforces the need to effectively communicate and take initiative throughout the consultation process.

Interestingly, there is perhaps a tension between the Department praising the review methodology as being flexible in presenting ‘new and emerging evidence’, and what it has publicly deemed as an example of the requisite evidence necessary. The October 2017 Consultation Paper on Methodology cites ‘the Department of Health workforce projections for health professions’ as an example; [6] this broaches the question of other apposite evidence to provide in Government submissions outside of the Government’s own findings.

When making submissions, the Department of Employment typically looks favourably upon evidence-based submissions referenced to ANZSCO occupations and where survey findings or modelling are referred to, this has been undertaken in the preceding 6 months, and incorporates information on methodology, assumptions, survey questionnaire, and response rates. [7]

Working with others

The benchmark to change the SOL is high – as such, it is important to consider:

  • Identifying industry stakeholders and supporters
  • Working closely with government
  • Collaboration with other industry players
  • Risk mitigation – failing this, question how your business will maintain access to visa holders or promote local access to the occupation.

Flexibility

Where access to visa holders is critical for your business, being flexible with multiple approaches will be key. Organisations should consider company, industry, or stakeholder labour agreements or alternative pathways.

Learning and revising previous reviews

The dearth of data from the Department of Employment regarding critical factors in changes to occupations on the SOL means it can be difficult distilling certain issues. A common qualm with the consultation process is that the Department outlines its methodology, but does not necessarily release the same datasets for organisations to evaluate and respond to; asymmetry in information means that not all parties are on the same page throughout the consultation process. Organisations are often forced into reactionary positions where they have to quickly adapt, especially where the consultation process involves extremely tight deadlines to accumulate a vast amount of evidence.

The process can also be political. Skills shortages categorisation can be made suddenly and in apparent response to lobbying efforts or special deals, rather than by strict adherence to the DISB methodology and points system. Ad hoc changes in the past for horse-racing and CEOs would evince such practices.

Conclusion

The urgency of SOL reviews can pose risks to operational effectiveness. The additional burden to take steps to counter changes against your organisation’s interests can be frustrating given resource limitations and competing obligations. However, proactively engaging with the consultation process, other industry stakeholders, and the government is in the best interests of the organisation. Employers should not assume the review outcomes will be in their favour. Where access to the 482 visa program is limited as a result of a change to the SOL, employers may have the option to use other immigration programs, however these are likely to be far more costly and time consuming than the standard 482 program.

  1. Department of Employment, Skills, Small and Family Business, Skilled Migration Occupation Lists
  2. Department of Employment, Skills, Small and Family Business, Consultation Paper – Methodology (Government Paper, October 2010), 2. (Hereafter Consultation Paper).
  3. Ibid.
  4. Skilled Migration Occupation Lists n 1.
  5. See generally Recruitment, Consulting & Staffing Association (RCSA), Submission to the Department of Employment, Review of the STSOL and MLTSSL, December 2017 (Link).
  6. Consultation Paper n 2, 4.
  7. Ibid.