Net overseas migration has dropped by nearly half since its post-pandemic peak, yet a new analysis by the Committee for Economic Development of Australia (CEDA) warns that migration remains a politically contentious “flashpoint” due to the lingering failure to improve a skills mismatch that’s costing $4 billion per year.
While Australia welcomed 555,800 migrants in the year to September 2023, the new CEDA report found, by last year this figure had dropped by 45.8 per cent to 300,955, with forward estimates suggesting a drop to 225,000 by fiscal 2027-28 – returning to pre-pandemic levels.
Yet for all the politically toxic narrative around migrants creating competition for housing and local jobs, CEDA noted fully 90,000 of the 185,000 permanent migration places allocated this year were allocated to migrants who are already living and working in Australia.
The figures reflect the outcome of a “stable and skills-focused” migration program that’s favouring onshore pathways in what CEDA called a “deliberate shift” – with a further 55,110 offshore places “reserved for highly skilled migrants aligned to long-term workforce needs.”
Indeed, the organisation noted, contrary to popular opinion persistently high net overseas migration levels are actually being driven by higher migration from New Zealand citizens, working holiday makers and temporary skilled workers – with healthcare and social assistance roles dominating.
With around 1 in 3 healthcare, logistics, professional services and manufacturing workers born overseas and sectors like aged care facing “a gap domestic supply alone cannot fill,” CEDA said, migration’s bigger challenge is Australia’s inability to tap migrants’ full skills base.
Expensive, slow, and onerous skills recognition processes have left hundreds of thousands of migrants working below their skill level in ICT and other industries – costing the national economy $4 billion in lost wages annually in what CEDA called “a poor result for migrants and a waste of the economy’s capacity.”
Breaking down the barriers… or trying, at least
Those barriers have persisted for years and, SkillsAware co-founder and director Yasmin King told Information Age, current migration policies still struggle to recognise that many skilled migrants have skills and experiences that can be hard to translate to an Australian context.
SkillsAware is as an AI-based platform that aims to improve the mapping of migrants’ experiences and qualifications to skills recognisable by Australian employers.
Given that many Australian employers remain inflexible about the skills they expect hires to bring, King said, “if the solution tends to be somebody who has done the exact same job somewhere else, how do you get innovation, and looking at things differently?”
“You’re not looking at what other outside transferable skills somebody can bring, and that’s the big problem for migrants because they’ve had their experience somewhere else, and for some reason employers think that’s not relevant here.”
“But think about the richness of what that experience could bring.”
A strong response in the program’s early months has led to pilot programs with customers in industries like construction, government services, and even a regional employment service provider that wants to use the platform to inventory what practical skills its employees have.
“These people have been working for them for many years but have no formal qualifications,” King explained, “and they wanted to go through a process to make sure these people have their skills recognised and mapped.”
“People are understanding they need to do something differently,” she continued, “and we’re trying from the ground up to complement regulators by identifying the gaps and the roadmaps towards somebody getting some form of accredited qualification.”
Fighting the bias of AI
Even as they fight to normalise recognition of migrants’ skills, advocates also warn that poor skills recognition is exacerbating the challenges migrants face because so many employers and recruitment firms have offloaded much of the vetting and hiring process to AI.
Without a formal rubric for assessing applicants’ talents, allowing AI algorithms to make hiring decisions – which has been sold to employers as faster and cheaper than manual vetting, but has been labelled as “high risk” in Parliamentary analyses – remains contentious.
“Inherent biases” in AI systems tend to disadvantage migrants’ skill sets and experience, King said, warning that what initially seems like a time-saver can quickly become a real business problem.
“We have encountered people who just want AI to make the decision,” she explained, “and I find it extraordinary that companies are happy to pay big bucks for recruitment processes and largely outsource to AI the filtering of whether they’re getting the right people.”
“The biggest issue I saw with small businesses was the challenge when they hired the wrong person, and the impact on their businesses of trying to correct that.”
With major parties pushing emotive migration policies based on inflammatory housing and cultural claims, CEDA emphasised the importance of coolly impartial analysis in formulating and evaluating migration policy that must find a way to recognise overseas qualifications.
Migration “remains essential as our population ages and skill shortages persist,” the report said, adding that “debate should be informed by evidence and clarity regarding policy intentions and implementation strategies.”
