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A Global Labor Market: Factors Motivating the Sponsorship and Temporary Migration of Skilled Workers to Australia1 International Original XXX Global Articles Migration Market Review Blackwell Oxford, International IMRE © 0197-9183 2007Labor by UK Publishing the Migration Center for Ltd Review Migration Studies of New York. All rights reserved
Siew-Ean Khoo The Australian National University Peter McDonald The Australian National University Carmen Voigt-Graf University of the South Pacific Graeme Hugo University of Adelaide
The recruitment of skilled foreign workers is becoming increasingly important to many industrialized countries. This paper examines the factors motivating the sponsorship and temporary migration of skilled workers to Australia under the temporary business entry program, a new development in Australia’s migration policy. The importance of labor demand in the destination country in stimulating skilled temporary migration is clearly demonstrated by the reasons given by employers in the study while the reasons indicated by skilled temporary migrants for coming to work in Australia show the importance of both economic and non-economic factors in motivating skilled labor migration.
1The
research reported in this paper was funded by a Linkage Project grant from the Australian Research Council with the support of the Australian Government’s Department of Immigration and Multicultural and Indigenous Affairs (DIMIA) as the industry research partner. We thank the staff of DIMIA for their collaboration in conducting the surveys of employers and migrants and especially David Ward for his management of the project. We also thank Karen Ewens for her assistance with the online surveys and data management, and Jacob Lasen for research assistance. Special thanks go to all the employers and skilled temporary migrants who responded to the surveys. An earlier version of this paper was presented at the IUSSP XXV International Population Conference in Tours, France, July 18 –25, 2005. © 2007 by the Center for Migration Studies of New York. All rights reserved. DOI: 10.1111/j.1747-7379.2007.00076.x
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IMR Volume 41 Number 2 (Summer 2007):480–510
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INTRODUCTION A recent report by the Organisation for Economic Co-Operation and Development (2002a) has indicated that more and more highly skilled people are moving abroad for employment. The increasing importance of highly skilled migration has been noted especially in the context of countries in Western Europe and in the United States (see for example, Salt, 1992, 1997; Lowell, 1999). This migration has involved computer programmers, engineers, nurses, and other professionals, mainly from both developing and developed countries to other developed countries, although some flows also occur between developing countries (Ouaked, 2002). Various factors contributing to the rise of skilled migration have been identified in the literature. Globalization and the advent of the knowledge economy have increased the demand for highly skilled workers in many industrialized countries, especially in the rapidly developing information technology sector (Ouaked, 2002). It has been suggested that the temporary movement of skilled labor “reflects the reality of today’s global marketplace” (Lowell, 2001:54). The structure of business, particularly the process of internationalization by large employers, is leading to increasing international mobility among highly skilled employees of these companies to meet client needs, provide input into project teams, and aid in professional development (Beaverstock, 1994, 2005; Salt, 1992, 1997). Transnational corporations (TNCs) have emerged as central economic actors and are responsible for an increasing share of world employment, production, and trade. The circulation within and between transnational corporations of highly skilled professionals and their role as important constituents of the global economic system have been widely discussed (see, for example, Salt, 1988; Beaverstock, 1994, 2005). The global competition for skilled labor has also intensified because of a shortage of skilled labor in many developed countries that are also facing an aging labor force. To meet this shortage, some of these countries are implementing policies to facilitate the recruitment of skilled migrant labor (OECD, 2002a). Some nation-states are regulating migration according to their labor requirements, putting in place mechanisms that facilitate the admission of managers, professionals, and highly skilled workers (Rosewarne, 2001). Many small businesses and public sector institutions such as hospitals and education departments are also beginning to recruit globally for skilled labor that is in short supply in the domestic labor market. A substantial share of highly skilled migration is temporary in nature. Developed countries competing to attract skilled migrants have simplified and
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streamlined visa procedures for their temporary entry. Countries such as Germany, the United Kingdom, and the United States of America now have visa programs specific for the temporary entry of highly skilled labor. The traditional countries of immigration have been particularly quick in revising their entry and visa policies. The acceleration of regional integration during the 1990s has also had a profound bearing on migration policies. Some regional free trade areas including NAFTA and the EU have removed some of the previous restrictions on the movement of labor. Regional and global trade regimes are likely to become more important vehicles for managing the mobility of skilled migrants. Mode 4 of the General Agreement on Trade in Services (GATS) under the WTO includes provisions to facilitate the transfer of skilled workers to provide services. GATS Mode 4 negotiations have generated the expectation that the agreement represents a first step toward labor market liberalization. A successful completion of the ongoing GATS Mode 4 negotiations potentially leads to a drastic change of the terms under which highly skilled workers move for temporary work abroad (see, for example, Nielson and Taglioni, 2003; Global Commission on International Migration, 2005). Many highly skilled people in developing countries may also have been forced to leave because of adverse conditions in their home country, such as political conflict or economic collapse (OECD, 2002b). While receiving countries of highly skilled migrants reap economic benefits from this migration, the effects on source countries are more ambiguous and include both costs and benefits. Skilled emigration is not a serious problem in countries with a broad and flexible human resources base and a capacity to replace the outflows through increased training or immigration. Australia, for instance, sends skilled migrants to other developed countries (Hugo et al., 2003), and in turn receives skilled migrants from both developing and developed countries. However, for poor countries that are already short of human capital, skill migration can be a major impediment to future economic growth (see Wickramasekara, 2003; IOM, 2005). It is estimated that some 400,000 scientists and engineers from developing countries (between 30 and 50 percent of the total stock) are working in research and development in the developed countries (IOM, 2005). Highly skilled individuals are disproportionately more likely to leave developing countries. With human resources becoming increasingly important in knowledge economies and with developed countries competing for the most highly skilled, few developed country governments are concerned about the impact of skilled migration on countries of origin.
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While it has been acknowledged that highly skilled migrants represent an increasingly large component of global migration streams, it has also been suggested that the current state of theory in relation to skilled migration is far from adequate in terms of explaining its motivating factors (Salt and Findlay, 1989; Salt, 1997; Iredale, 2001). Most theories of international migration are focused on low-skilled migration from less developed to more advanced economies, emphasizing the importance of wage differentials and other labor market factors (see Massey et al., 1993). Salt and Findlay (1989) have suggested that a theoretical framework to examine highly skilled migration needs to consider the international spatial division of labor and the role of transnational companies and recruitment agencies in stimulating international migration, arguing that the structure of business and the organization of work in a globalized economy place migration demands on individuals. Goss and Lindquist (1995) have proposed that both individuals and institutions, including employers and the state, are important factors in motivating skilled migration, while Iredale (2001) has noted that national policies and bilateral and multinational agreements also play a facilitating role in the international migration of skilled labor. Taking account of these arguments to examine the role of employers and labor demand as well as individual factors in motivating skilled migration, this paper examines the contexts and reasons for the sponsorship and temporary migration of skilled people to Australia from the perspectives of both employers and skilled migrants. It is based on data from two surveys, one of employers that have recruited and sponsored the temporary migration to Australia of skilled workers and the other of the skilled migrants themselves, that were conducted as part of a major research project on temporary skilled migration to Australia. Based on the findings of the data analysis, the paper discusses the relevance of current theories of international labor migration to the present era of economic globalization where employers think globally in labor recruitment.
TEMPORARY SKILLED MIGRATION TO AUSTRALIA In 1996, in response to the new global economy and business groups wanting more flexible arrangements for bringing in skilled workers from overseas on a temporary basis, the Australian government introduced a new temporary business entry visa (subclass 457) that allowed employers to sponsor skilled workers for a stay of up to four years (Birrell and Healy, 1997; Business Advisory Panel, 1999). The new visa program involved a radical simplification of the rules and procedures governing the temporary entry of skilled workers. Employers were no longer required to demonstrate that they were unable to find a suitably
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qualified Australian resident to fill the position or that there was a training benefit to Australian workers. Other requirements such as medical checks of the migrant workers were also streamlined to achieve a faster visa processing time, and since November 2003 both sponsorship and visa applications could be submitted online for even faster processing. Employers that have been approved by the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA) are able to sponsor overseas workers in the first four major occupational groups: managers, professionals, associate professionals, and tradespersons.2 They have to pay their foreign employees on the same basis as Australian residents. There is a minimum salary threshold (currently at A$41,850 or A$57,300 for occupations in the information technology sector) aimed at excluding low-skilled or unskilled workers. Employers are monitored annually by the Department of Immigration for compliance with the terms of sponsorship. The temporary business entry visa, subclass 457, may be compared with the H-1B visa in the United States. It is similar to the US H-1B visa in that it is tied to an employer sponsor. However, unlike the H-1B visa, there is no restriction on the number of 457 visas that can be issued annually and no limitations on renewals. Also unlike the H-1B visa, intracompany transferees, as employer-sponsored migrants, are eligible for the 457 visa. Spouses and dependent children can come to Australia with the skilled employee, spouses have full work rights, and there is no restriction on visa holders applying for permanent residence. Other countries that have comparable temporary skilled migration programs include Canada, New Zealand, France, Germany, Ireland, and the United Kingdom, although the visa arrangements in these countries may differ from one another and from Australia’s 457 visa in terms of their definition of skills and other eligibility criteria, work rights for spouses, duration of stay, and whether an annual quota exists (see OECD, 1998; Joint Standing Committee on Migration, 2004 for comparisons of the temporary skilled visa arrangements in some of these countries). Australia has had a formal immigration program since the end of World War II that has always emphasized permanent settlement. Therefore, the skilled temporary visa program represents a new direction in Australia’s migration policy. However, it is also complementary to the General Skilled Migration (GSM) visa program that seeks to attract skilled migrants to Australia for permanent settlement. The largest number of GSM visas issued annually is the 2
Employers in designated regional areas may be exempt from this restriction to the first four occupational groups.
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Independent Skilled visa that has no need for sponsorship by an employer, unlike the 457 temporary skilled visa. Other categories of GSM skilled visas may be sponsored by relatives or a state government in the case of visas to attract skilled migrants to regional areas. There is also an Employer Nomination visa that is the permanent entry equivalent to the 457 visa. However, unlike the 457 temporary entry visa, the GSM visas select immigrants on the basis of a points test, with points awarded for age, skills, and English language proficiency (DIMIA 2006). Potential permanent migrants have to meet a minimum number of points set by the Department of Immigration to qualify for a skilled migration visa. Applications for the permanent migration visas take a longer time to process than for the temporary skilled visas, requiring applicants to have health and character checks. Thus, employers are more likely to use the 457 temporary visas instead of the GSM permanent visas to bring in skilled migrants. While skilled permanent migration remains important for Australia, the introduction of the 457 visa has resulted in temporary migration becoming a significant component of total skilled migration to Australia. In 2004–2005, a total of 49,855 temporary skilled visas were granted, an increase of 24 percent from the previous year. Compared to the 77,880 permanent skilled visas issued during the same year, temporary skilled migration yielded nearly 40 percent of all skilled migrants. As of June 2005, the stock of skilled migrants temporarily resident in Australia was 62,700 (DIMIA, 2006). Compared to the vast amount of research on permanent or settler migration to Australia, there have been fewer studies of temporary migration. Prior to the introduction of the 457 temporary business entry visa, a few studies had examined the different types of temporary movements (Sloan and Kennedy, 1992), the role of temporary migrants in the labor market (Brooks et al., 1994), and Japanese workers in the tourism industry (Bell and Carr, 1994). The study by Brooks et al. found that skilled temporary residents increased opportunities for Australian workers through skill transfers and economic benefits and did not disadvantage Australian workers in the labor market. More recently, after the introduction of the 457 visa, the Department of Immigration and Multicultural Affairs has commissioned three studies of the impact of temporary skilled migration on government budgets and Australians’ living standards (Access Economics, 2002a, 2002b, 2002c). It is not unexpected that these studies have found that temporary skilled migration has positive economic effects since the migrants pay taxes and contribute to the Australian economy through their consumption of housing, goods, and services but make little use of government-provided benefits in health and education services because they are not eligible for them.
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It is also important to understand the determinants as well as the consequences of skilled temporary migration. However, there has not been a study of the factors that motivate temporary skilled migration to Australia. The objective of this paper is to examine this issue from the perspective of both employers that have sponsored temporary skilled migrants and the migrants who have come to work in Australia to obtain a better understanding of this new and increasingly important pattern of international migration to Australia. The paper aims to examine the following research questions: Which employers bring in skilled migrants from overseas on a temporary basis and what are their reasons for doing? Who are the skilled temporary migrants? Where do they come from and what kinds of skills do they have? What are their reasons for coming to work in Australia?
DATA AND METHODS OF ANALYSIS The paper is based on data from two surveys conducted in 2003–2004 in Australia. The surveys were an integral part of a major research project on temporary skilled migration undertaken with the collaboration of DIMIA. The first survey, conducted in mid-2003, was of a sample of 135 employers that had sponsored skilled temporary migrants to Australia in recent years. The second survey, conducted between November 2003 and May 2004, was of a sample of 1,175 skilled temporary migrants. The survey questionnaires were designed by the research team to address a number of issues relating to the motivating factors and outcomes of skilled temporary migration to Australia. In both surveys, letters were mailed by DIMIA to employers and temporary migrants randomly selected from DIMIA’s administrative records informing them about the research project and inviting them to participate in the surveys. A total of 295 employers and 6,000 temporary migrant workers were contacted. Survey respondents had two options for completing the survey questionnaire. A copy of the questionnaire was mailed with the approach letter and respondents could complete and return it to the research team in the reply-paid envelope provided. Alternatively, they could go to the survey Web site on the Internet and complete the questionnaire online. A reminder letter was sent out one month after the first letter. Completed questionnaires were received from 135 employers, yielding a response rate of 46 percent. The survey was anonymous and collected information about the employer, their employee recruitment process, reasons for sponsoring overseas employees, and their views about the sponsorship application process. The research team also conducted face-to-face interviews with ten
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TABLE 1 EMPLOYERS AND MIGRANTS IN THE SURVEY BY LOCATION AND SIZE AND INDUSTRY OF EMPLOYER Employers
Migrants
Number
%
79 20 12 4 5 15
58.5 14.8 8.9 3.0 3.7 11.1
552 261 52 32 78 200
47.0 22.2 4.4 2.7 6.6 17.0
No. of People Employed by Company/Organization
