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457 Visa Program: Business Report Report


Executive Summary

The proposed change to the 457 Visa Program is historically progressive. It will benefit the government, the industry players, and workers (both Australian Nationals and temporary immigrants). They will enjoy better treatment and wages. However, the discussion is spiraling into a tug of war full of uninformed rhetoric with dangerous political overtones. Hence, Management Foundations Construction should take decisive steps aimed at calming and assuring its employees. These include team building, workshops, and communication of organizational stands. The risks associated with the program should also inform the CEO of Management Foundations Construction in promoting a stand. The short-term may have disruptions such as industrial actions, but the benefits in the long-term, such as healthy competition in the construction industry, outweigh the disruptions.


Since its inception in 1996, the 457 Visa Program was intended to cure employment scarcity. For a period of five years, the program was also used as a labor-testing tool. In 2001, this was abolished (Junankar, Satya & Wahinda, 2004). Subsequent governments have maintained the 457 Visa Program as it was in 2001 until recently (Hubbard & Tham, 2013). The government seeks to reintroduce the labor-testing clause to the program. The reintroduction is meant to instill fairness in hiring and to remedy a burgeoning unemployment situation. However, the government’s initiative, though pristine in its endeavor, has been dogged with rhetoric. The manner in which the initiative has been politicized is threatening to spiral into a debate about xenophobia and racism. The temporary workers covered in the 457 Visa Program are few compared to other immigrants such as New Zealand nationals and international students (Hubbard & Tham, 2013). Hence, the critics’ standpoint that the government is racist and xenophobic is overblown.

It is also true that the government is culpable in politicizing the affair. Understandably, the employment of Australian nationals should be the main concern of the government. It is also true that the government should be concerned with the possibility of misuse of a program whose agenda was to enhance internationally accepted labor standards and practices in Australia (Hubbard & Tham, 2013). However, the manner in which the government is driving this message home is wont to disenfranchise a particular section of the population. The construction industry is particularly culpable. Most of the immigrants under the 457 Visa Program work in the construction sector (Hubbard & Tham, 2013). Figures indicate a growth of over 70% between the years 2010 and 2011 among immigrants in the construction industry (National Visas 2013). Owing to the debate surrounding the program, the CEO of Management Foundations Construction is not sure about the modus operandi. This paper will provide a perspective to the CEO weighing both options with particular regard to the construction industry. Among other things, the paper will explore risks in the short-term and long-term, recommendations, and detail an informed analysis. It will use the illustrations of two Australian companies in this endeavor.

457 Visa Program – Construction Industry

As noted earlier, the construction industry is the main beneficiary of the 457 Visa Program. The number of temporary immigrants working in the sector has been growing at an average of 50% since 2001. It is instructive to note that in 2001 the labor testing of the 457 Visa Program was repealed. The growth is occasioned by growth in the industry and the economy at large. Additionally, the growth can be occasioned by the government’s assertion that the temporary immigrants and the employers are in cahoots in exploiting the generous 457 Visa Program (National Visas 2013). The Government is pushing for the reintroduction of the labor-testing clause, particularly for this reason. The clause will restrict employers from hiring a temporary immigrant if an Australian national who is readily available can fill the position.

The construction industry is already feeling the pinch owing to the growing calls for industrial action to stop the government from enacting this clause. Although official numbers may not be readily available, industrial observers are reporting an already reduced number of immigrants seeking work. Reeling from this pinch, the industry is already starting to accumulate jitters as to the full impact of the end to this seemingly endless tug of war. However, industry players of good faith should welcome the discussion because it will heal existing malpractices whose evidence cannot be readily available. It is a possibility that the players in the industry are using the 457 Visa Program to gain undue advantage in tendering. This brings unfair competition. The CEO of Management Foundations Construction should actively participate in the discussion highlighting the positives. However, the CEO should have a clear understanding of the long-term catastrophic dents it will leave in the human resources department. The administrative costs will skyrocket as organizations grapple with a possible employee go slow. The supply for labor will also be hurt. Projects already underway may experience serious delays and contracts may have to be reviewed to reflect drastic changes in the costs structures.

457 Visa Program – Opportunities

The discussion regarding the 457 Visa Program has been intense in the past seven months. The government’s stand is that labor malpractices must be curtailed. This remains to be the gist of the program. The construction industry is the main beneficiary of the program. The education system in Australia does not train sufficient workers in this field. Additionally, trained and highly skilled Australians demand high and unsustainable wages. This forces organizations to hire externally. To do this, they use the 457 Visa Program as the gateway. Owing to the benefits of hiring a temporary worker from outside, the organizations occasionally misuse the program to gain undue advantage. This breeds unfair competition because it leads to lower bids for tenders among other injustices to hurt competition. Additionally, it gives undue advantage to temporary immigrant workers over the Australian nationals. Therefore, the discussion is good as it is likely to lead to permanent cures to these malpractices. It will introduce a straightforward way to vet immigrant workers to reduce cases of unskilled workers doing work that is not fit for them. It will also tame the wayward behavior of Australian nationals in their demand for high and unsustainable pay. Hence, if the antagonists can find common ground, the 457 Visa Program is beneficial to all and the discussion is good (Junankar & Mahuteau, 2005).

457 Visa Program – Involvement

The CEO of Management Foundations Construction should be actively involved in the discussion. His stand should be that the program makers had a clear intention of instilling fairness in labor. In addition, the CEO should impress upon workers the loopholes in the current version that allows unfairness in labor. These loopholes are also unfair to workers if the government’s allegations are true. The 457 Visa Program may allow competitors to hire unskilled temporary workers cheaply at the expense of skilled workers who are either resident in Australia or not (Australia Immigration 2013). The program has always intended to supplement skills not replace them. After this clarion call, the CEO should forge ahead with a strategy aimed at ensuring everyone tones down on the rhetoric, which is likely to distort the intended cause. The CEO, for example, can write newspaper commentaries that are rubber-stamped by the construction workers’ union to let everyone understand the government’s intention and workers’ take. This will diffuse any accusations of a passive look to a sensitive situation and will enhance employee trust and motivation (Junankar, Satya & Wahinda, 2004).

457 Visa Program – Adjustments in Organizational Behavior

Employees will choose sides regarding the proposed changes to the 457 Visa Program. It is a damning situation as whichever side an employee chooses in light of the emotive nature of the discussion will not look good to the other side (Design-Build Source 2013). An employee who chooses to side with the government will be painted xenophobic and racist. An employee who chooses to oppose the changes will be labeled conservative. Organizational relations are likely to frosty in the short term and uncomfortable in the long term. Management Foundations Construction will have to adjust organizational behavior. The CEO will most likely have to organize seminars that try to bring harmony to the team. Additionally, team-building activities will ensure that there is a united front of the organization. This will drive administrative costs up. In case the proposed changes sail through, the company will have to hire more expensively. Management Foundations Construction will have to be careful in handling cases of xenophobia and racism, as Australian nationals are likely to overbear their immigrant counterparts. The CEO will also have to devise a way to motivate immigrant workers whose morale will drastically reduce because of a feeling of nostalgia associated with been labeled ‘second tier employees’ (Design-Build Source 2013).

457 Visa Program – Short-term Risks and Benefits

Already, there are numerous signs of possible risks. Experts in the issue are already saying that immigrant workers are canceling visas to watch the developments. In the short term, there is likely to be a shortage of workers (Design-Build Source 2013). The motivation levels at also likely to be quite low. Go slows and industrial actions are already in the offing as civil society groups and workers’ unions start to take sides. Individual organizations such as Management Foundations Construction are experiencing a possible delay in projects. As employees take either side in the discussion, tension will be felt among them. It is possible that operating budgets will burgeon to unprecedented levels, which will lead to short-term financial strains in some companies. There are likely to be short-term benefits owing to already existing political overtones, accusations, and counter-accusations that restrict a healthy discussion. The government is keen to ensure the change. Hence, in the short term, one side will definitely feel disenfranchised (Nasu, 2008). 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.

457 Visa Program – Long-term Risks and Benefits

The risks in the long term do not stand out much. The adjusted 457 Visa Program that brings back labor testing is beneficial in its intent but disruptive in the short term. The possible misuse of the program to gain undue advantage over competitors will be eliminated (Australia Immigration 2013). This happens because temporary immigrant employees’ skills do not need verification. Additionally, since an employer will have to hire both Australian nationals and immigrants (optional, depends on whether a nation is unavailable), wage harmonization will be realized to the benefit of all employees.

This will eliminate a situation where companies can hire 100% temporary immigrants and pay them cheaply despite been as skilled as the Australian nationals will they overlook. The benefit will also extend to the government and the economy. The government will have cured (albeit partly), the problem of unemployment. The economy will enjoy a boost of a large section of the population with a new impetus to purchase. The main disadvantage is that industries affected will have to increase their costs of doing business to factor in higher wages. In addition, the human resources administration costs will increase as organizations grapple with possible rifts associated with inferiority and superiority complexes emanating from immigrants and Australian nationals respectively. Lastly, although far-fetched, racism and xenophobia may define work relations in the future. This may drive away immigrants to other countries that will deny Australia much-needed skills (Migration Alliance 2012).

457 Visa Program – Recommendations

It is my recommendation to the CEO of Management Foundations Construction to view this discussion positively. The main spoiler of the discussion is the rhetoric from politicians, media, and the government at large. The aim of the Proposed Bill that seeks to prioritize the employment of Aussies is pristine. This has been the intention of the 457 Visa Program since its inception anyway (Kneebone & Hay 2009). The program was supposed to inject skilled workers in a situation where such skills were temporarily inadequate within Australian nationals. Discussions emanating from Management Foundations Construction should be meaningful and communicated to employees. The CEO should reiterate the importance of every employee in driving the company agenda. Additionally, it is crucial for the company to let the employees understand that no employee is superior to the other and promote equality. The company will weather the 457 Visa Program potential dangers with such assurances and direct stands.


The 457 Visa Program was intended to benefit the Australian labor set-up during its inception. It would inject skilled temporary workers to fill gaps in employment. However, the repeal of a clause that sanctioned labor testing in 2001 has created loopholes that companies use for labor malpractices, in view of the Government. Hence, the government wants to reintroduce the clause amid growing discord from critics and unending rhetoric from media, politicians, et al. Management Foundations Construction, a company in the midst of the storm, should take a decisive stand and promote the change. The government’s strong stand and the faultless nature of the change should be crucial in rendering support. The company should do this by understanding fully the short-term and long-term risks. The short-term risks may be disruptive but the long-term benefits outweigh these disruptions (Rynes, Gerhart & Minette, 2004).

Reference List

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

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

Hubbard, L & Tham J 2013, , Web.

Junankar, R & Mahuteau, S 2005, ‘Do Migrants Get Good Jobs? New Migrant Settlement in Australia’, Economic Record, Vol. 81, No. S1, pp. S34-S46.

Junankar, R, Satya, P, & Wahinda, Y 2004, ‘Are Asian Migrants Discriminated Against in the Labor Market? A Case Study of Australia’, Harvard Journal of Law and Public Policy, Vol. 33, pp. 607-638.

Kneebone, S & Hay E 2009, ‘Refugee Status in Australia and the Cessation Provisions: QAAH of 2004 v Mimia’, Alternative Law Journal, Vol. 31, No. 3, pp. 147-152.

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

Nasu, H 2008, ‘Reform of Subclass 457 Visa Scheme: Proposal of Three Models’, Alternative Law Journal, Vol. 33, No. 3, pp. 147-150.

National Visas 2013, , Web.

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.

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