Chef shortages, the 457 visa and the Trump effect
There’s an overwhelming amount of talk in the media at the moment about chef shortages – and staff shortages in general – in the hospitality industry and how things are only going to get worse. There’s also a lot of discussion, as happens frequently, about the merits of the 457 visa scheme and the utilisation of overseas talent.
Employment growth in the industry is forecast to grow at 16.9 percent to 2018. That sounds great for the country but is horrifying for existing operators. As the tourism industry rises to the top of Australia’s super growth industries, the complexion of the market is changing. Where the clear majority of employment was by small caf’s, restaurants and caterers, the growth now appears to be coming from the large groups that are establishing themselves in Sydney and Melbourne.
A case in point is Urban Purveyor Group (now the Rockpool Dining Group). Remember when they were a boutique group operating eight or so venues just a few years ago? They now operate 47 venues under 15 brands after merging with Rockpool Group. They are adding new venues rapidly and they will impact the labour market with access to VC funding.
The projected completion rate for apprentices in the food trades sector for 2015 is 34.7 percent. That is certainly towards the bottom of the pile for apprentices and is an alarming statistic. This article by Kira Clarke delves into this on a deeper level and is well worth reading.
Previously I have used SEEK as a barometer of the market. This week there are 2,789 chef jobs advertised. Compare this to 1,045 carpenters, 939 electricians, 528 plumbers and 703 welders. Those four occupations total 3,215 positions combined, only 426 more than chefs alone. I focus on these occupations because they all attract annual salaries higher than that of a chef, according to the Australian government’s Job Outlook resource, and I believe show a direct correlation between long term earning capacity and choice of trade.
We have clearly established the problem, and I am not here to address the long term solution, which is urgent. I merely want to emphatically show there is a massive problem and the only short term solution to keep hospitality businesses trading and employing Australian workers (and hopefully training them) is to go overseas for the shortfall.
In that light, you would think the government would do its best to protect the industry and facilitate relatively easy visa processes. Unfortunately, this is far from the case. Instead we are feeling the Trump effect of nationalism and jobs for Aussies. Pollies are nervous at the moment and don’t appear comfortable to have a logical discussion about the needs of the industry, not only because it is politically unpopular, but it also highlights the neglect they have shown to training and apprenticeships.
The 457 visa program is at its lowest level of approvals in five years. The number of backpackers, who make up a large portion of foreign workers in the industry, is down 17 percent since 2013. The backpacker tax, which will go through eventually, will provide a further disincentive for them to come to our nation. Apprenticeships are down and the exit age of existing employees is also coming down.
There is a lot of discussion about the changes to the 457 system. I find this rather bemusing, as the only actual legislative change of recent is the reduction in the time a visa holder has to secure a new sponsor from 90 days after termination to 60. This is annoying, but by no means does it have any measurable impact on the program.
The real change to the program took place about nine months ago. Evidence provided with applications suddenly was not acceptable anymore. The issue it seems was that the Department of Immigration and Border Protection (DIBP) deemed that positions that hospitality businesses were applying for were no longer genuine. The businesses had created these positions to sponsor a relative, or they were receiving a financial gain from the employee.
The ridiculous requests we see today are clearly a result of the DIBP being instructed to keep numbers low to avoid political backlash over foreign workers stealing Aussie jobs. Some of the stranger decisions/requests we have seen are owners of small businesses being told by the DIBP that they don’t need a manager; they should run the operations themselves. A request for a detailed Time and Motion study for a cook with his duties aligned as they appear against the government’s occupation description, the percentage of his week that he spends on the task, and the percentage of the week his manager spends on a similar task.
We have been processing 457 visas in the hospitality industry for over 10 years. We have processed over 1,600 applications in the past five years alone and find the current environment the most challenging ever to successfully apply for a 457. The off-shoot of this is threefold: we have to charge more for the process as it takes a lot longer to gather and prepare the required evidence, the business has to wait for up to four months to start the worker due to long processing times and superfluous requests, and the worker is sitting idle, unable to work until their visa is approved. The economic impact of this alone is stupefying, not to mention the stress to all involved.
There are some simple solutions. Ideally, extend the limitation on Working Holiday visa holders from six months with one employer to be unrestricted on an industry basis. Introduce a two year working visa that is truly temporary in nature as a stepping stone visa to the 457 visa which does ultimately allow a Permanent Residency application. A broadening on the allowable occupations to include trade waiters, and education of departmental case officers as to the occupations in the industry.
The key to using overseas workers today is to be prepared. Ensure that you have maintained your commitment to training Australian citizens and Permanent Residents. Enrol your staff as registered trainees, it is easy and they will gain a qualification. Apprentices are admittedly hard to find, but if you can find one, 100 percent of their salary counts as training.
Ensure that you have a strong argument, backed by evidence, to show the difficulties you have had trying to fulfil the role locally. Ensure that the position is appropriate for your business and that the person has the experience or qualifications to fulfil the role. I don’t mind if you don’t use us, but use a Registered Migration agent who has a reasonable level of experience in the hospitality industry. We do a lot of work for people who start the visa then get overwhelmed when the DIBP come asking questions and it always works out more expensive than if it was started correctly.
Don’t just hire any overseas chef. There are vast differences in skill depending on the country the person trained in, where they have gained most of their experience and what their motivations are. We make a point of travelling to our source countries regularly to inspect their workplaces, the equipment they use, the size of the brigades and the quality of output.
It isn’t about not hiring Aussies, and as an industry we need to make sure that this is well known. We also need to train our staff and develop cultures in our businesses so that they are attractive to young Australians seeking career direction in their youth. It is the only way to have a sustainable industry and to have less reliance on foreign workers in the future.
Justin Browne is managing director at registered migration consultancy, edupi.