Looking after #1

It's funny, on Whirlpool and similar job discussion forums,  a frequent discussion is a person wanting to back out of a job offer they have verbally accepted or have even signed paperwork. Posters will often jump on with the comment "you have to look after your career" or "you have to look after number 1".

Yet these are the very same posters that rant about recruitment agencies and recruiters having no morals.....

457 Visas - impact on Australian IT Job Market

457 visas (that is Temporary Work (Skilled) visas) have been getting a lot of press of late, largely due to the downturn in the job market and the upcoming federal election.

457s aren’t though well understood, so I thought I’d shed some light as to how and where they are being used, and how they are impacting on the local IT market.

It’s not just a simple case of Johnny Foreigner, the Java Developer, arriving in Australia, applying for a bunch of Java roles on SEEK, pricing himself sharply, and an employer hires him over the local options and sticks him on a 457. In fact it’s far more complex.

In the scenario above, the employer would be highly unlikely to be able to sponsor Johnny’s 457s visa (few companies are approved to do so). And even if they could, there is no guarantee than Johnny would be offered a visa. In fact, he almost certainly wouldn’t.

So how does all this 457 stuff work?

The companies that tend to be approved for 457s are outsourcing firms. Not though companies like IBM & Fujitsu. Rather outsourcers like Wipro, TATA, HCL– outsourcers with their roots overseas. These companies are coming in a competing with IBM and Fujitsu and the like. And when they win the pieces of business they largely use overseas resources. Hence they are very cheap and win a lot of business.

Now offshoring isn’t new, nor does it explain where 457s fit in. The connect is the business model these companies like TATA, HCL and Wipro now don’t run a purely offshore model with the entire team sitting offshore. Instead they bring a small though significant percentage of their team to Australia (on 457s). This gives their people a good insight into the culture of business they are working with, enables them to put some faces to names of the local stakeholders, and also provides a handy channel of communication should problems arise. Combined it makes the offshoring/outsourcing model run far more efficiently.

And that’s the thing about the new model off offshoring/outsourcing. It gives far better outcomes than going down this path has yielded previously. The technology has also gotten better. It’s no longer a massive headache.

The cost savings are massive. A developer of around 5 years experience costs around $90000 per annum in wages in Australia (give or take). In India – less than $10000 per annum. When companies are looking at a 10-15 person project team that becomes a massive gap. It makes it incredibly easy for the offshore based outsourcer to outcompete local options.

The 457s are a key piece of the puzzle though. By bringing some team members to Australia, it makes the projects run far more smoothly and yields superior outcomes to where the team is100% overseas. Yes it is more expensive for them than 100% offshore, but they have a lot of wiggle room on dollars.

So, yes, the 457s are denting the Aussie job market, albeit you are unlikely to be in direct competition with the visa holder. These offshore outsourcers are beating the local outsourcers to projects, and that in turn means less jobs for Aussies. That role that would have been with IBM is now with TCS, and they aren’t hiring someone locally.

So would a crackdown on 457s help the local IT job market? In short, yes, provided the crackdown targets the right businesses.

I do though think local IT people need to be aware of this phenomenon, and lift their game &output accordingly. IT departments don’t enjoy the best of reputations in Australian business, and at a time when the local MD is being pitched far cheaper IT options, you need to make sure your IT department is delivering.

(note – even though I have used developers as my example above, the same is equally true of infrastructure engineers)

Not the right time to be changing careers…

If you’re contemplating trading your career in, our strong recommendation is don’t. Unfortunately the softening job market now means there is something of an oversupply of available qualified candidates in most sectors. Why would a company take a punt on the person with no experience in Project Management when there is a bunch of experienced Project Mangers available? It's not the time to push into a new sphere.

 Over the last couple of downturns people have considered it quite a good time to re-skill. The logic being: why fight the market? Now is a good time to be out of the market while it is a little flat, and I’ll make sure I’m well positioned when the market does improve. Previously I’d regarded this as a good idea, but this time I think we’re facing not only a downturn but a major change in the market. I actually can’t point to a single sector of the market I think is a certainty to fire when the market does improve.  As such spending time and effort trying to re-skill into a new sector doesn’t make much sense when you can’t be sure the new sector won’t be a healthy one.

Now is the time to batten down the hatches, stick within your current domain and fight for roles in the market, even if it is a bit tough. The grass isn’t always greener.