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The 457 Visa Programme in Australia Report

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Updated: Feb 12th, 2020

The Australian Government introduced the concept of 457 visas in order to limit the number of immigrants into the country. Australia had witnessed an increasing number of migrants occupying various job positions before the second half of the 1990s. Markedly, the government moved in to ensure that employers give priorities to Australian citizens during job recruitments.

Of late, this issue has been a controversial topic with the government’s increased sanctions and stringent measures, which has made the program an expensive venture for business owners. The government added additional cost in sponsoring a 457 immigrant.

For example, employers have to meet the costs of recruitment, provide equal terms and conditions, meet the cost of return travel, and meet nomination and sponsorship costs. These new adjustments took effect on 1st July 2013 amidst opposition from companies that had relied heavily on the cheap labour from the 457 visa immigrants.

Businesses, especially in non-metropolitan areas have been relying on this group of immigrants to run their activities since most Australian citizens prefer working in towns. This report discusses the implications of the 457 plan in the construction industry and goes further to recommend the industry’s levels of involvement in the programme.

The discourse also offers suggestions on how to adjust the organizational behaviour in order to accommodate the interests of the immigrants without compromising on the firms’ productivity. Lastly, the treatise evaluates both the long and short-term risks that this visa programme has in the construction industry.

According to Elliott 2013, the federal government believes that companies have been misusing the 457 Visa Programme by not only recruiting cheap foreign workers at the expense of the local workers, but also retaining them beyond their period of stay as per the visa requirements.

The constructions, mining, and tourism industry have been the great beneficiaries of the programme since they reduce the cost of management and maximises on profit making as a way of gaining competitive advantage over their competitors in the market (Gamble & Thompson 2009).

Organisations tend to minimise their expenses by capitalising on cheap labour to continue operating at high levels of working capital. Evidently, the move by the federal government to add terms and conditions to the scheme presents vast challenges to the management in the key industries, which have relied on foreigners to run their services.

If the government insists on recruiting locals at the expense of immigrants, companies will have to pay high wages and salaries in order to remain operational. From economists’ point of view, when a company changes from low-wage workers to high-wage workers, it will decrease the demand on labour to maintain the daily operations (Krugman & Wells 2006).

Consequently, companies will hire a few workers and extend their working hours as a way of compensating the normal time with the foreign workers. In essence, these radical reforms will not decrease locals’ unemployment rate given that the companies will absorb sizeable number of employees that they can sustain. The skilled local personnel will have to increase the amount of labour supply in their respective places of work.

From the aforementioned implication, it is clear that the Management Foundations Construction Company will experience employees’ shortage given the nature of the work. Building of houses and apartments also requires unskilled labourers, which most Australian citizens do not prefer.

In the construction industry, the 457 visa reforms will result in low development outputs since most employees will be locals. In addition, Management Foundations Construction Company will experience low competitive advantage in Sydney, Melbourne, Bourke, and Dubbo if other firms opt not to adopt the government reforms on employment policy.

Notably, not all jobs are the same; some are risky while others are safe, some require manual labour while other require expertise, and some offers more flexibility while others offer less.

For example, the construction and mining industry has many risks; therefore, it should be on employee’s willingness to work in such environment. These changes will hit the construction industry since skilled Australians will not accept low wages for manual jobs at the construction sites.

Over the years, the 457 visa programme workers have benefitted the government in terms of revenue submission thus playing crucial roles in developing the Australian economy (Bartlett 2013). The government should note that businesses in the current world have to outsource part of their services from other nations, human labour included.

The government’s demand for employers to prove their inability to find a local staff before opting for temporary migrant workers is prejudiced. The entire concept of 457 Visa Programme adds more burden and cost to employers. Some companies may decide to shift their operations to other countries like India and Philippines where cheap and reliable labour is a guarantee.

If companies adopt such moves, Australian workers will be redundant in the job market. For instance, IBM has recently shifted its job market overseas and even expanded its 457 Visa Programme to maintain their profit levels at lower operational costs. IBM opted for this move citing the outcomes of an internal research that showed that Australian locals are 40% more expensive than their overseas counterparts are (Howe 2013).

It is always the need of all profit-making firms to operate at low costs in order to get high returns on investment. When these restrictions deny firms such strategic opportunities, they often look for other cheaper options provided they achieve the set objectives.

Numerous policy changes in the 457 Visa Programme imply that employers will not have variety of applicants to consider in offering job opportunities. In the IT industry, employability does not only rely on qualifications, but also on technical skills, willingness attitude to work and vibrant work ethics (Pennington 2013).

There are high possibilities of companies absorbing locals who are only after high salaries at the expense of their willingness to deliver on the objectives. Consequently, Australian Companies will not produce quality products albeit high expenditures hence losing trust in the global market.

At the same time, the companies will submit low tax returns to the federal government, which will result in low economic development due to poor quality services from the government. This move represents the government’s indirect way of reducing competition within the Australian market. In the end, there will be low creation of opportunities and innovation owing to low competition from the locals.

Reforms in the 457 Visa Policies imply governments fear for foreigners, and in employment terms, it represents acts of discrimination in terms of nationality and race. This act of demonising asylum seekers puts Australia in bad light in terms of international relations. In the reforms, applicants applying for a 457 Visa after 1st July 2013 have to table satisfactory evidence to prove the need for the visa (Hugo 2013).

Given the aforementioned implications, the board of Management Foundations Construction will have to analyse the technicality of all their jobs in order to determine if there is need for foreign workers. Since the company operates in Bourke, which is a local town, the 457 programme is essential to the operations of the construction company.

Factually, locals prefer securing jobs in metropolitan areas to non-metropolitan areas like Bourke. Other locations like Melbourne, Sydney, and Dubbo are metropolitan areas that favour the employment of locals. Even though the government views the visa programme as a threat to locals in terms of securing employment, the culture of its citizens necessitates the need for foreigners in other working areas (Stockwell 2013).

The government should involve the board in the 457 programme when the company intends to hire unskilled employees. Since other immigrants have earlier violated the terms of the policy, the company will be able to monitor the actions of its foreign employees in order to take responsibility for any occurrence.

For that reason, the company should engage the government in understanding the need for employing temporary migrant workers albeit the repercussions that the immigrants have brought in the job market. The tightened conditions will make the company lose competitive advantage in the construction industry.

Government data has it that over 10, 000 visas were of the 457 programme in the 2013 financial year, and the Gross Domestic Product (GDP) has been on the rise with the increase in the number of immigrants (Elliott 2013). Notably, the programme has allowed Australia to tap skilled foreign employees into its market as the economy dictates.

On the other hand, the government should recognise the important roles that these immigrants have played in sustaining the economy; therefore, should not act ruthlessly in handling them (Robbins, Campbell, & Judge 2010). Further, the construction company ought to advice the government on the intended return on investments that foreign employees have been providing in their capacities.

The Management Foundations Construction Company be involved in the 457 programme during the legislation of the policy. The whole issue has been a controversial debate, attracting likes and dislikes of equal measure. As a result, such industries should have representatives in the Committees of Australian Immigration Department so that the government can consider their interests in employability.

The raging debate makes it necessary for the involvement of the Management Foundations Construction in order to make decisions that will affect their operations positively. In areas like Sydney and Melbourne, locals can easily accept job offers as opposed to the Northern town of Bourke.

Organisational behaviour touches on the thinking, feelings and actions of human beings in a given setting (French & Schermerhorn 2008). Organisational culture affects the performance of a company, and with the government’s involvement in the 457 programme, the CEO of the Management Foundations Construction should create and adopt a managerial style that accepts and appreciates diversity.

Several firms reveal the benefits of employing immigrants in other sectors in the economy. In connection to this, the CEO should create laws that prohibit discrimination at the workplace in order to reap from the pool of talents in foreigners.

If the construction firm can manage diversity, it is clear that immigrant workers will feel secure and valued hence motivating them to work towards achieving the company’s key strategic objectives (Gamble & Thompson 2009). Besides, local employees will learn to accommodate their foreign counterparts in management and other processes within the firm.

This trend enhances unity among workers thus reflecting on productivity of the firm. For sustainable development, resolution of interpersonal conflict is significant in addressing the challenge of the 457 programme. The management should include a structure that accommodates the interests of immigrants as this makes employees feel worthy.

Additionally, the company should perform uniform rewards for its outstanding employees irrespective of originality. A discriminatory-free environment and openness increases employees’ trust thus resulting in increased productivity.

The concept of sustainability arises when the construction firm absorbs employees that it can meet their cost with ease and recording favourable returns from all the engagements. In addition, the organisation can improve communication between the subordinates and superiors so that immigrant workers can express their dissatisfaction at any time.

A good organisational climate promotes performance as employees feel inspired and motivated hence increasing their overall participation (Muondo 2013).

The construction industry will easily benefit from varied pools of employees that the 457 Visa Program guarantees. Given that most foreign workers come from developing countries like India and Philippines, companies will spend fewer funds in managing foreign employees than local employees (The Government’s misguided crackdown on 457 visas 2013).

In this aspect, companies like Esanda Financial Services and Promina Group Insurance will record higher profits than when they could have absorbed all locals. This form of outsourcing, in long-term perspective, results in massive growth of companies thus dominating their fields of operation.

Cheap and skilled labour also translates to quality service provision. For example, if Promina Group Insurance commits minimal funds to pay its employees, it implies that excess funds will remain as working capital. A high level of liquidity will enable the insurance company to re-insure its services and even offer variety of cover for the public (Clancy 2013).

At the same time, cheap labour at Esanda Financial Services will allow the firm to offer more financial products to its customers hence developing trust among the customers. Even though cheap labour from immigrants of 457 Visa Scheme is beneficial both in the short and long-term perspectives, there are possible risks that come with allowing such immigrants to dominate the job market of a country (Carisbrooke 2012).

Since national firms offer promotions in terms of experience and technical knowhow of an individual, most Australian firms risk losing the managerial positions to foreigners who are extremely aggressive in their lines of duties. In line with this, Australian citizens and the federal government will not have full control of their local firms, which immigrants will have dominated.

Some immigrants also changes the terms of the 457 Visa Program and end up staying in Australia illegally. Markedly, not all Australian citizens are expertise; therefore, they can work in informal jobs, but since the ready-to-work immigrants will have occupied such positions, majority of the locals will be jobless.

Unchecked immigration can also result in production of low quality products as majority of some firms will absorb low-salaried employees in order to cut on cost of management. When this occurs firms will not be open to competitions from the global arena given that most of immigrant workers are only after wages at the expense of the company’s growth.

A food and beverage company like Dick Smith Foods can risk producing low quality foods to its customers and even lose the country’s trust since most of the clients are locals.

If the government does not check the migration trends, there may be revolution and mass actions from the jobless locals who feel neglected by their own companies. Although the Labour government is fast at reforming the 457 Visa Programme, it should come out clearly on the problems that it experience with the scheme.


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