A recent report from the Committee for Economic Development in Australia (CEDA) shows that Australia is under-utilising the skills of permanent migrants.

Despite the focus of Australia’s permanent migration programs on skilled work, we have yet to maximise the benefits of these skilled workers, with the report highlighting that nearly a quarter of permanent migrants in Australia are working in a job beneath their skill level. 

Melinda Cilento, CEO of CEDA

According to Melinda Cilento, CEO of CEDA, “Recalibrating the system to improve skilled migration outcomes is all the more important coming out of the COVID-19 recession, as employers say they cannot find workers with the skills they need due to closed international borders.” 

CEDA estimates that the skills mismatch occurring among skilled migrants is costing the equivalent of $1.25 billion over 12 months in forgone wages, though the report stipulates that this is a conservative estimate considering there are no reliable tools to measure how much longer the mismatch occurs beyond the initial 18 months of arrival.

The Department of Home Affairs Continuous Survey of Australia’s Migrants (CSAM), highlights concerns regarding the inefficiencies of the migration system. According to CSAM, the mismatch in skills can be explained largely as a result of a lack of professional networks or a lack of local work experience. This is in spite of the over-education rates of migrants reported as up to 30 per cent, in comparison with Australian-born workers where over-education sits at approximately seven per cent. 

According to CSAM, 20 per cent of graduates indicated the skills mismatch was as a result of insufficient jobs. Considering the categories where migrants are most and least likely to find work in their nominated field, registered nurses fared the best with a 77 per cent likelihood, followed by mechanics with 76.6 per cent, and software and application programmers with 74 per cent.

In contract, the occupations that have proven to be the most difficult for migrants to successfully transfer their skills into a job include accountants, civil engineers and cooks.  

According to Cilento, “As we emerge from COVID-19 we need a skilled migration system that is nimble and responsive to the needs of the economy. In addition to many migrants working beneath their skill level, the system is slow to respond to rapidly emerging skills needs, such as digital and data.

“What is required is structural and sustainable change, and the development of a system that can evolve as skills needs change.”

The report indicates four recommendations to generate structural and sustainable changes to the migration system:

  1. Establishing an online skills-matching jobs platform, allowing migrants to register their skills to potential employers. 
  2. The Australian Bureau of Statistics (ABS) to update the Australian and New Zealand Standard Classification of Occupations (ANZSCO) codes, which have not been adjusted since 2013. 
  3. Increase Federal Government transparency around the data and methods used to assess in-demand occupations on the skilled worker list. 
  4. Reducing the waiting period for skilled migrants to receive unemployment benefits from four years to six months, following research that shows the length of the Newly Arrived Resident’s Waiting Period has exacerbated the skills mismatch.

“Over time, these changes will do more than just reduce the level of skills mismatch among permanent skilled migrants,” says Cilento.

“They will help make the entire migration system more efficient and effective, generating better and more up-to-date matches between migrants and the skills Australia needs to power its economic recovery.”

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