The Australian government should replace its ANZSCO industry and jobs classification system with a “more flexible” system that better reflects today’s job market, a Parliamentary committee has recommended in handing down its final report of Australia’s skilled migration program that also recommended the increased use of permanent residency to attract and keep skilled staff in Australia.

Called in February to evaluate the processes available for employers needing to bring talented staff from overseas, the Parliamentary Joint Standing Committee on Migration’s Inquiry into Australia’s Skilled Migration Program ultimately handed down 18 recommendations that would overhaul the way technology and other high-skilled jobs are staffed.

Among the recommendations in the final report is the retirement of the ANZ Standard Classification of Occupation (ANZSCO), a hierarchical jobs index that was introduced in 1986 and last revised in 2013.

The Australian Bureau of Statistics announced a further update in March “to allow the ABS to be more responsive to changes in the labour market and the needs of stakeholders” – but the inquiry’s recommendation has called time on the ageing standard, which in conjunction with the Skilled Occupation List (SOL) underscores government policymaking around skilled migration.

National Skills Commission (NSC) and allied experts, the report recommends, “should develop a new occupation and/or skills identification system for the skilled migration program… [that is] more flexible to adapt to emerging labour market needs, with consideration given to how the new system would integrate with other functions of government currently utilising the ANZSCO.”

The overhaul would be part of a broader dynamic national workforce plan that would be co-ordinated between state and federal governments to improve the interplay between Australia’s higher and vocational educational systems, employment services, and its skilled migration program.

Framework for a workforce plan

Improving visibility of current demand requires the development of a cross-portfolio interagency committee to meet regularly, the inquiry found, as well as the development of a data aggregation system “that identifies skills shortages at a regional level by occupation”.

The absence of such granularity in the ANZSCO’s characterisation of contemporary jobs, in tech and elsewhere, have muddied efforts to target migrant visas to areas of strong need – as have a proliferation of policies and arbitrary divisions, such as the maintenance of separate Strategic Skills Lists for short-term and medium to long-term needs.

Fast-growing fields in desperate need of additional talent – in areas such as quantum information, advanced digital, data science, MedTech, Energy and Mining Technology, AgTech, Space and Advanced Manufacturing, FinTech, and Cyber Security – were dominating applications under the Global Talent (Independent) Program, but these emerging industries, ACS wrote in its submission to the inquiry earlier this year, are poorly represented within the ANZSCO hierarchy.

“Many ICT roles are not sufficiently covered by the current classifications under the ANZSCO occupation codes,” ACS warned, adding that the body “would urge these codes are reviewed along with increased support for the Australian Bureau of Statistics to improve its reporting on the ICT sector.”

The government should also, the report recommends, develop “accepted definitions of acute skills shortages and persistent skills shortages” considering issues such as recruitment difficulty; the length of time the shortage has existed; the number of job vacancies and their geographic spread; the criticality of the occupation if left unfilled; and the criticality of the occupation to temporary circumstances.

A sense of permanence

One of the key issues addressed by the inquiry is the need to provide clearer long-term options for Temporary Skills Shortage visa (subclass 482) migrants – who should, it recommended, be given “a pathway to permanent residency” that could be fast-tracked for highly-skilled visa holders.

The pandemic’s disruption has dramatically changed the balance of skilled migrant visas, with workers migrating before the pandemic – and currently working – staring down the expiration of two-year working visas whose renewal has been in limbo for many months.

“The lack of skilled migrants and near record low unemployment has resulted in major skills shortages in the Australian economy impacting the viability of businesses,” the report notes, adding that “the pause in the skilled migration program has provided an opportunity to have a less constrained examination of the skilled migration program than might ordinarily be possible.”

This included considering “whether the skilled migration settings are serving Australia’s interests and its traditions of being selective about who we take in, while remaining internationally competitive to ensure Australia remains an attractive place for skilled migrants.”

Such changes would be critical to ensuring that Australia – which has lost over 500,000 temporary migrants since March 2020 and is expected to farewell another 77,000 this financial year – can reverse the exodus of the skilled staff needed to drive the post-COVID recovery, which will in large part hinge on our ability to innovate in areas like science and technology.

“Competitor destinations have not stood still,” Chartered Accountants ANZ and CPA Australia wrote in a joint submission recommending the creation of “safe corridors” for international students’ return.

“Their actions in this space have created challenges for Australia, which needs to act now to transform and future-proof its approach to skilled migration.”