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457 Visa in Australia. Management Foundations Construction Report

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Updated: Aug 15th, 2019

Executive Summary

The Australian government’s proposed change to 457 Visa Program has generated a lot of discussion. Companies such Management Foundations Construction is following the discussions keenly. The construction industry is likely to be most culpable owing to the many temporary immigrant workers it employs. The government claims that industry players employ such workers despite their lack of skills.

The government’s aim to attach certain skill levels to possibility of employment and to keep Australians at the forefront in consideration for employment is seen by many as racist and xenophobic. Some of the possible short-term risks include go-slows and industrial actions. Long-term risks span from economic slowdown to perennial xenophobic attacks. In addition, this is likely to pitch one group of workers against another.

The possible benefits of the 457 Visa Program include a permanent solution to labor problems in the country. It is also likely that Australia will solve problems associated with semi-skilled employees that companies hire to reduce costs. However, disgracing immigrants will also keep skilled immigrants away, which may create employee shortage in the future.

Introduction

The Australian Government intends to introduce a Bill in Parliament that seeks to regulate the manner in which companies located in the country hire workers. A cursory look at the Bill highlights a situation where native Australian workers will be given priority over immigrant workers. Currently, a number of organizations and companies based in Australia have more immigrant workers than native Australians.

This is because these organizations find it easier to employ such workers. Immigrants do not demand too much. The 457 Visa Program aims to inject “fair play” in labor according to the Australian Government (Hurst, 2013). It follows that more immigrants are employed in the lower tier jobs compared to Australians despite the fact that they may be more qualified and skilled.

The Australian Government is grappling with a rising level of unemployment and wants to keep that figure low. On the other hand, organizations want to increase shareholder value by reducing costs. Hence, the 457 Visa issue has generated a lot of debate in the media and civil society who vehemently oppose this move citing xenophobic and racist overtones (Migration Alliance 2012).

The labor market and companies located in Australia are at a confused trance. Management Foundations Construction, a construction company with vast interests in Australia, is one such company.

This report will advance this discussion and offer possible solutions to the CEO of Management Foundations Construction with regard to construction industry. It will also weigh the long-term and short-term risks associated with hiring immigrants (which the CEO prefers) with illustrations from comparative companies.

457 Visa Issue in the Construction Industry

The construction industry is at the center of 457 Visa Program. Majority of the work available in the industry goes to immigrants. Enactment of the program will have a profound effect on this industry. This is because there will be possible skyrocketing of labor costs, industrial actions from immigrants, and an enactment headache arising from the ground. Statistics indicate that over 70% of the work in construction is temporary.

Contractors do not engage workers for more than six months before a building is complete. They also try as much as possible to engage the worker within this period to be within the law. Enactment of this program is likely to stall construction work. Immigrants who remain at work after a section of their lot are kicked out to create space for the incoming Australians will have a go-slow.

Additionally, civil society groups and workers’ unions are likely to go ahead with the imminent strikes to force the government to back down. In light of this entire clamor against 457 Visa Program changes, a shrewd Company Management should choose sides. Many companies are likely to ignore the government. Management Foundations Construction should weigh the options critically too (National Visas 2013).

457 Visa Program Opportunities/ Possible Organizational Adjustments

The 457 Visa Program is crucial for the construction industry players. It allows them to hire immigrant workers at a lesser cost. This reduces budgets and ensures that the industry remains competitive which fuels economic growth. Failure to have a thriving construction industry is instructive of an economy in limbo. Most of the immigrant workers affected by the 457 Visa Program are in the construction industry.

The growth of immigrants between 2011 and 2012 was over 70% (Design Build Source 2013). This indicates a robust industry. However, it also indicates a situation where the Australians do not take up construction jobs or ask for too much in wages.

It may also indicate that industry players are greedy and want too much in profits. At Management Foundations Construction, this Bill that seeks to alter the 457 Visa Program to cap the number of Australians at a certain percentage and to prioritize their employment over immigrants’ will have a negative organizational effect (Design Build Source 2013).

The immigrant workers may have a negative view of the native Australian worker. The discord will not be good for work. The immigrant worker may also feel belittled. The CEO of Management Foundations Construction may have to engage the workers at a personal level so often, which will drive administration costs high (Perry, Mesch, & Paarlberg, 2006).

For any successful organization, the five pillars (dimensions) of organizational structure has to be set, defined, and finally made operational. These five dimensions of organizational structure include specialization, standardization, centralization, and finally configuration. From examining how the dimensions of a given organizational structure have been put in place, the efficiency of a company can be easily determined.

Large organizations such as Management Foundations Construction need to have an organizations structure, which consist of the above activities. For maximum productivity, a company’s management has to blend the organizational dimensions in such a way that they facilitate optimum production (Manzoor, 2012).

Several factors determine an organizational structure. These factors include but are not limited to, technology, size, and environment. These factors determine the organizational structure by imposing economic or other types of constraints. This forces the organization to choose certain structures over others. These dimensional factors are unique in such a way that they are independent of each other.

Moreover, the organizational structures are more bureaucratic in one characteristic and less bureaucratic in other characteristics. At Management Foundations Construction, the structures are such that there is flexibility in decision-making.

Hence, the organizational structure is hugely horizontal or flat after the CEO who makes strategic decisions. The proposed changes to 457 Visa Program will alter the structure resulting to skyrocketing administrative costs (Rynes, Gerhart & Minette, 2004).

Recommendations for Involvement in the 457 Visa Program

Most construction industry affiliated companies and unions are demanding the government to leave the 457 Visa Program as it is. Citing possible skills requirement in the sector, owing to its growth, the unions are highlighting a need for skilled workers to fill future demand (Australia Immigration 2013). It is instructive that many people in Australia are averse to construction work.

There are no enough programs aimed at making students warm up to construction holistically. Hence, many Australians fit in a small part of the entire construction industry. The requirements of the industry, however, when it comes to skills, are wide spread.

Hence, the input of immigrants is highly fundamental to bridge this skills gap. The immigrants are also needed to fill even larger gaps in the industry not related to the 457 Visa Program (Hubbard & Tham 2013).

The foregoing scenario will push away investors who would not want to be associated with local investors. Failure to have external investor input will dampen purchases and economic growth. The construction industry will also suffer costs escalations owing to lack of employees. The companies will have to adjust budgets, which may lead to potential losses.

The important projects, which are nearing completion, may be delayed. This delay will bring forth a situation where lenders are seeking repayments of loans but the monies are not available because the projects that were supposed to generate money are not complete (Hubbard & Tham 2013).

Since Management Foundations Construction is part of the construction industry, these scenarios are quite true. I would recommend that the CEO deal with the available projects first before taking up new projects. This will shelve the negative possibilities. Secondly, it imperative that that the employees of the company understand the company’s position on the issue.

This will curtail possibilities of go slows and participations in imminent industrial actions. Additionally, the employees will feel confident about their work (Aucoin, 2011). The position of the company should be that the 457 Visa Program, although needing improvements, should be left as it is.

Henceforth, the government should engage all the necessary stakeholders in drafting the changes. Although the government’s intention is not to hurt immigrants, it should not be viewed as favoring a section of the population, as this will lead to further discord among employees (Hurst, 2013).

The company in expressing these sentiments should also write a protest letter detailing the need for competition in labor. The letter should be addressed to the labor ministry. Management Foundations Construction should advise the need to exercise restraint in handling the matter as it has both short-term and long-term implications.

In whatever way, the implications will hurt the entire economy because of shocks in other sectors (Silverman, 2011). However, the company should follow strictly the laid down regulations in the 457 Visa Program, as this is the basis for the government’s current interference (Australia Immigration 2013). It must also agitate for other organizations to follow the laid down regulations in hiring.

The government says that some of the immigrants do not have valid skills and hence deny validly skilled Australians a chance to be employed. It is imperative that Management Foundations Construction strictly counter checks the credentials of its immigrant workers to denounce this assertion.

Employees found to have acquired work fraudulently should be kicked out immediately and reported to the authorities. This will increase the government’s confidence that other players can do the same. The result is that the government will denounce its clamor for stricter regulations of the immigrant workers (Hurst, 2013).

Reengineering of business processes is one of the most radical and effective methods of dealing with change. Reengineering is also effective in reducing costs and improving quality of service. A far-reaching method requires thorough evaluation before a firm embarks on it to refine its processes.

Many firms may try to fail to carry out Business Process Reengineering successfully. The reason is that the process requires a lot of time, resources, and knowledge for successful implementation. Management Foundations Construction may employ it to tackle the imminent changes in organizational behavior (Borghans & Heijke, 2005).

Long-term Risks and Benefits

Many organizations are apprehensive of the short-term risks. However, the long-term risks are the bane of the Australian economy. Many workers are likely to flee to neighboring countries with less strict labor laws. The demand for labor in Australia will sky rocket and employers will have a smaller pool of employees. The construction costs will increase sharply.

Investors are likely to shun the Australian construction industry, which will be left at limbo. The labor sector may be hurt by this twists and turns. This may reach irreparability levels. Xenophobia and racism, which is what many pundits fear, may be implanted in the Australian labor sector.

This will lead to high organizational administrative costs associated with creation of harmony at the work place (Manzoor, 2012). On the other hand, this may finally lead to cure in the labor market. The sector is full of much instability including wage differences. It may create jobs and enhance fair employment practices in Australia.

Short-term Risks and Benefits

The immediate risks associated with the passage of this draft Bill are already been felt. Unions are vowing to hold demonstrations to lobby the workers against this policy. Hence, work is likely to be interrupted (Manzoor, 2012). Organizations such Platinum Sign Installation Pty Ltd depends highly on immigrant workers.

The main reason for hiring the workers is that their wage demands are consistent with the work the company does. This is the same case with Management Foundations Construction. There will be possible adjustments to budgets and contract renegotiations (Doyle, 2008) However, the likeliest scenario is deficiency of workers before the adjustments. This will lead to losses.

Conclusion

The 457 Visa Program is hugely beneficial to the Australian economy. This is particularly true in the construction industry. This report, for the CEO of Management Foundations Construction, has highlighted crucial aspects about the program. The report can also be taken into consideration by any CEO in the construction industry.

Owing to the high media attention the 457 Visa Program has attracted over the last few months, any false move will have a lasting impact (Hubbard & Tham 2013). The impact may have catastrophic aftershocks that will shake the entire economy, leave alone the construction industry. However, the construction industry will have the highest casualties.

This is because of the ever-growing perception that the government’s move will attract xenophobic attacks from native Australians and is racist which will push away potential immigrants (Hubbard & Tham 2013). It will also push the already existing immigrants out at the slightest availability of an employment opportunity elsewhere. This will paint the government and Australia in a bad picture.

Reference List

Aucoin, R. 2011, ‘Information and Communication Technologies in International Education: An Australian Policy Analysis’, International Journal of Education Policy and Leadership, vol. 6 no. 4, pp 1-11.

Australia Immigration 2013, Changes to the Subclass 457 program. Web.

Borghans, L. & Heijke, H. 2005, ‘The Production and Use of Human Capital: Introduction’, Education Economics, Vol. 13 no. 2, pp 133.

Design Build Source 2013, Construction Industry Needs 457 Visas. Web.

Doyle, A. 2008, ‘Educational performance or educational inequality: what can we learn from PISA about France and England’? Compare, vol. 38 no. 2, pp 205.

Hubbard, L. & Tham J. 2013, . Web.

Hurst, D. 2013, . Web.

Manzoor, Q. 2012, ‘Impact of employees motivation on organizational effectiveness’, Business Management and Strategy, vol. 3, no. 1, pp. 1-12.

Migration Alliance 2012, Flexible visas ‘key’ to meeting construction demand. Web.

National Visas 2013, . Web.

Perry, J., Mesch, D., & Paarlberg, L. 2006, ‘Motivating employees in a new governance era: The performance paradigm revisited’, Public Administration Review vol. 66, no. 4, pp 505-514.

Rynes, S., Gerhart, B., & Minette, K. 2004, ‘The importance of pay in employee motivation: discrepancies between what people say and what they do’, Human Resource Management, vol. 43 no. 4, pp 381-394.

Silverman, D. 2011, Interpreting qualitative data, 4th edition, SAGE Publications, London.

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