Australian Hospitality Skills Shortage:

What is the Real Story?

Background, discussion and analysis of data from a survey of hospitality
venue owners and managers responding to questions related to training,
recruitment, skills shortage and the employment of non-Australian residents.

CREATED IN PARTNERSHIP BY
 Contents About
In late 2016 a decision was taken by two major
professional bodies in the Victorian hospitality sector
pg. 3 About to conduct a small scale survey of their membership.
The issues and businesses that brought the survey to life
There was a perception at a grass roots level that the
accusations made against the sponsors of 457 visas
pg. 4 Background were detrimental to business, and were unfair in that
An overview of the key concerns relating to hospitality recruitment and retention that they lacked balance in respect of general practice by
Australian employers face venue owners in the hospitality sector. The Australian
Hotels Association Victoria (AHAV) and Community
Clubs Victoria (CCV) reflected the concerns of their
pg. 6 The Survey members and wanted to respond to a succession of
An outline of the demograpics created by survey participants media reports critical of the 457 visa program.

pg. 8 Apprentices AHA and CCV have collaborated with TSS to survey
A lack of participation in vocational training opportunities is generally seen as a their memberships. Questionnaires were developed
contributing factor in the diffi culties venues face in sourcing skilled workers locally. around issues of recruitment, apprenticeships
and training in general, and the employment and
sponsorship of people on temporary visas. The
pg. 10 Perception of Skills Shortages attached report considers the results, and highlights
An analysis of current local recruitment practices, temporary visas and the use of 457s practices and perceptions in the industry at present.

pg. 12 JobOutlook Data and Worker Retention Australian Hotels Association

Government data collected through JobSearch, education and training courses on the For more than 150 years AHA (Vic and NSW) has
myfuture website as well as other sources to shed light on local working conditions provided industry leadership, lobbied on behalf
of their members and promoted best practice in
hotel management with a commitment to effective
pg. 14 The Transition to PR communication with members. AHA (Vic and NSW)
Does the hospitality industry play a unique role in attracting potential perminant works to promote the hotel industry and protect its
residents? members so they can remain at the heart of their
local community.
pg. 15 Conclusion and Key Findings Community Clubs Victoria
A succinct outline of the surveys results
Community Clubs Victoria is an industry association
representing the needs of Victorian community clubs
of all shapes and sizes. Members vary from small
volunteer-based sporting clubs through to very large
clubs with multi-million dollar turnovers. They are
not-for-profi t entities designed to provide facilities,
support and entertainment for their communities.

TSS
TSS is an Australian owned company of recruitment
and immigration specialists providing services to
numerous hospitality venues as well as services
across other industry sectors to some of Australias
largest employers. The company was a pioneer of the
one-stop-shop combination of hospitality recruitment
services with immigration for venues needing to
sponsor workers from overseas, and is dedicated to
2 long term staffi ng solutions for its clients. 3

Background
In recent years hospitality employers have reported
an increasing shortage of skilled and dedicated long-
term employees in the local labour market, especially
in roles like Chef, Cook, Baker and Restaurant Manager.
While attempts have been made to understand
the cause and comprehensive impact of this skills
shortage, it is fair to say that the focus of concern
in the public debate has often shifted instead to the
use of temporary skilled visas that are used to fi ll the
gaps. This in turn sparks review and debate around
these programmes on both sides of the political
spectrum. Reviews by the Australian immigration
department and a Senate Committee Inquiry in 2015
are examples of recent efforts.
The public debate on the issue has continued in
parallel to these reviews. The ACTU has long held the
belief that the 457 visa system is broken . . . rorted .
. . and needs a complete review.1 On the basis that
salaries in the hospitality section do not appear to
be rising, academic researchers have questioned
whether acute skill shortages actually exist2, and
consequently have questioned the sectors inclusion
in and its alleged misuse of the 457 visa program3.
Both major political parties appear sympathetic to
greater controls. The Leader of the Opposition Bill
Shorten has spoken about constant reports of people
coming in from overseas . . . and taking Australian
jobs, which could be done by locals.4 The Minister
for Immigration Peter Dutton has asserted Every
Australian teenager should have the chance to get a
job at the local shops . . . [and] shouldnt be knocked
out of the job by a foreign worker . . .5.
Most recently the Prime Minister announced in April
of 2017 that the 457 visa programme will be abolished
and replaced with a new employer-sponsored
Temporary Skill Shortage (TSS) visa. The announced
changes will have a dramatic effect on the hospitality
industry as visa holders in most of the hospitality-
related occupations will no longer have a pathway to
employer-sponsored permanent residency.
4 5
When looking at the wider industry it is clear that
the use of skilled working visas is just one part of
understating the skill shortage problems the industry
faces. Apprenticeship training and strenuous working
conditions also play key roles.
In January 2015, Hospitality Magazine published
an analysis of training and retention issues in the
hospitality sector. The organisers of this survey - based on their on-going experience
Along with addressing the fact that the number of with issues of training, recruitment and employment of staff -
apprenticeships commencing in commercial cookery question a number of the assumptions which appear to underpin
has been dropping in recent years, key concerns for the current public debate as they affect the hospitality sector,
prospective apprentices included: particularly where a claim is made that foreign workers are taking
jobs from Australians. It appears legitimate to ask:
long hours
repetitive work - Is there a case to argue that there is a skills
remuneration too low for living costs in a
metropolitan location
shortage in the hospitality sector?
costs to employers of apprentices time spent
at TAFE - Is it correct to argue that Australians are being
courses without suffi cient focus on denied jobs due to a lack of training opportunities
productivity in the fi rst year
employers not providing appropriate on-the- or competition from foreign labour?
job training
large chains focussed on short-term profi t The organisers put together a questionnaire to examine these
and other issues, which appear to have been overlooked to date:
over investment in talent
a few unscrupulous operators who tarnish
the industry - How the use of workers holding Working
Holiday and Student visas interfaces with
sponsorship under the 457 visa program;
- The extent to which 457 visas in the hospitality
sector can be understood as a step in a process
of permanent migration rather than solely as a
set of temporary work issues;
- Whether dierences between metropolitan
and regional areas suggest dierent policy
approaches might be warranted.
Survey questions were assembled with these issues in mind, and
are presented here for consideration.
Footnotes
1 ACTU http://www.actu.org.au/actu-media/media-
releases/2016/457-visa-system-is-broken-actu-calls-for-major-
reform-of-occupation-list
2 Wright & Constantin. An analysis of employers use of
temporary skilled visas in Australia Submission to the Senate
Education and Employment Reference Committee, May 2015 pp
30-31
3 Wright. Evidence of employers misuing 457 visas shows need
for reform in Hospitality Magazine 11 November 2015
4 ABC, interview 15 November 2016
5 http://www.couriermail.com.au/news/peter-dutton-foreign-
workers-get-the-flip-from-australian-fast-food-jobs/news-story/3
12164b377504b7e0ea3e25f27f0a62e
 The Survey
The survey was conducted on-line with members of AHA Vic and CCV able to respond on an anonymous
basis. TSS has a substantial client and subscriber base within the hospitality industry. These businesses were
also given an opportunity to take part anonymously. As the responses were provided on a voluntary basis, it
is a self-selecting sample.
The respondent base included venues employing temporary visa holders on 457 visas, Working Holiday Maker
visas and Student visas. The respondents were also asked about their sponsorship of Permanent Residency
(i.e. the employment of ENS/RSMS visa holders):

The survey was conducted between November 2016 to February 2017. A total of 131 responses were received. 58% of respondents employ staff holding 457 visas
45% of respondents employ staff holding Working Holiday Maker visas
35% of respondents employ staff holding Student visas
38% of respondents employ staff holding ENS/RSMS visas
22% of respondents employ no staff holding any of the above visa types

42% of respondents indicated they do not take part in the 457 visa program.
Do you or have you employed any international staff on the following Australian visa types?

Venue Type
The types of venues that participated in
the survey were self-described as indicated
in the pie chart. The sample is weighted
towards pubs, but includes a range of venue
types, with hotels, restaurants and clubs
together making up 36% of the sample.
Locations
The locations of respondents were spread
across seven states and territories (only the
ACT is not represented), but are weighted
heavily towards Victoria (over 60% of
respondents).
There was a 58% regional / 42%
metropolitan split in the respondent base.

Size of Venues
The size of the venues captured
a range in terms of the numbers
of employees, but was weighted Use of Multiple Visa Types
towards medium sized venues. 86% Further, 69% of employers of 457 visa
of respondents were from venues holders surveyed also employ people on
with 11+ employees. 37% were from other temporary visas and/or permanent
venues with 51+ employees. 19% were residency. This represents 41% of the
from venues with 101+ employees. respondent pool.

6 7
Apprenticeships The Commonwealth convened the
Apprenticeships Reform Advisory Group
(ARAG) in September 2015 to provide advice
With specifi c reference to apprentices, 49% of respondents reported employing apprentices, with 62% of
respondents indicating they would like to hire more employees eligible for apprenticeships or traineeships.

to the Australian Government on options for

Training in the hospitality industry is an issue of
professional and commercial concern to all parties
involved in the industry. A lack of participation in
vocational training opportunities is generally seen
as a contributing factor in the diffi culties venues Recommendations targeted three key
face in sourcing skilled workers locally. The issue of
apprenticeships has come under particular scrutiny.
Training has routinely been a basis for criticism of
the industrys use of 457 visas, with a perception that
venues bring in workers from overseas to avoid the
need to train staff locally.
Would you hire more apprentices given the A breakdown of those businesses employing apprentices
reform of the Australian Apprenticeships
opportunity? with relation to visa sponsorship
system.
The Group reported in 2016.
areas pre-apprenticeships, incentives
and alternative delivery models as well
as providing options for broader systemic
reform. Recommendations included a
comprehensive review into apprenticeship
arrangements.

Training The survey results indicate a marked difference in the employment of apprentices with regards to 457 visa
Survey respondents were asked about their training practices. A range of training opportunities are employment:
on offer within the hospitality sector as demonstrated by the table below. 457 visa sponsors 63% reported that they employ apprentices
What types of training do you offer your current employees? non-457 visa sponsors - 28% reported they employ apprentices

457 visa sponsor respondents represent 75% of venues that employ apprentices.

Hospitality is a massive growth area, and were just not attracting enough people to
meet that increase in the market.
Anne Cazar, Assistant Director of Tourism and Hospitality at TAFE NSW
Apprentices: fi nding and training the next generation, Hospitality Magazine 29 January 2015

Australian Training Models Are Failing Apprentices

Apprentices and trainees have been failed by the
system as a result of funding models that require
completions without expertise in many cases. The
industry suers from a lack of career awareness and
the schools systems (VET & TAFE) are not industry
focused.
Venue, Hobart
Training organizations currently hand out certicates
to under-prepared and under-skilled individuals who
then believe a certicate dictates high wages and no
further training: all care and no responsibility. They
know their rights but ignore the fact rights are often
earned.
Pub Owner, Metropolitan Melbourne
Training funding has been so fragmented across
multiple RTOs that there is no clear trainer doing an
exceptional job just many that accept barely adequate
performance as competent.
Pub, Regional Victoria
There needs to be a long term national strategy to train
Australians in this industry because if there isnt things
dont bode well for the future of tourism in Australia.
A well-trained hospitality professional will always have
a job and the more experience and the better trained
they are the better they will be paid and be sought after
by businesses like ours
Resort, Regional South Australia

8 9
Perception of Skills Shortage
Local Recruitment, Temporary Visas and the Use of 457s

Easy Local Recruitment

Of the 15% of respondents who reported that it is easy
to recruit from the local labour market, the sizeable
majority (89%) were metropolitan respondents. This
indicates a more acute perception of skills shortage
How difficult do you find it to hire and retain
in regional and remote locations.
hospitality workers from the local labour market?
The survey contained a series of questions designed
to explore perceptions of the existence of skills
shortages in the industry.

77% of respondents expressed the view that staff

shortages are holding back the growth or viability of
their business. Notably, 83% of respondents indicated
it is difficult or very difficult to hire and retain staff
from the local labour market.
What recruitment options do you usually use?
Could your business opperate effectively without
the 457 visa pogramme?
As noted, 83% of respondents reported it is difficult or
very difficult to hire and retain hospitality workers from
the local labour market. This figure may explain why
businesses turn towards international recruitment.
Indeed, 57% of 457 visa sponsor respondents
indicated that their businesses could not operate
effectively without the program.

Respondents dont prefer employing visa holders

The data suggests that the use of 457 visas is not a preferred initial recruitment option for venues in the first
instance. Moreover, comments from respondents indicated specific factors that dissuade them from using
457 visas, including the paperwork and costs involved:

The immigration process is far too long and you never
know how long it will be and its pot luck as to when they
arrive We need quick access to staff as our business
suffers at the very long process.
Pub, Regional Victoria
Speed the process up or let them start on interim
approval.....its ridiculous, no chef can wait 4 months to
Only 15% of respondents turned to international recruitment or professional recruiters in the first instance, be approved before starting work? No one can for that
with 85% preferring to try local recruitment strategies. When faced with the inability to find staff locally, the fact
percentage turning to international recruitment or professional recruiters rose to 29%, with 71% of respondents
still preferring more local recruitment strategies. Restaurant Metropolitan Sydney
As a small business it is very hard to justify the cost
of recruiting overseas staff through an agent and this
is when funding for small business can be used as it
is the only possible way of getting the right person for
your business and recruiting firms have the skills and
correct practices to obtain skilled migration and should
be encouraged to cut out the illegal use of immigration
and under-paying these people.
Pub, Metropolitan Melbourne
For small business the initial costs which total over
$5,000 make it [457 visa sponsorship] un-achievable.
Pub Metropolitan Melbourne

10 11
JobOutlook data
2017 data
JobOutlook is an initiative of the Commonwealth
Department of Employment. The Agency reports
on data collected through JobSearch, education and
training courses on the myfuture website as well as
other sources.
JobOutlook reports a growing number of vacancies
for chefs and cooks:
The JobOutlook data suggests a major exit from the
industry for chefs and cooks at around the age of
35. It is possible this creates structural impediments
New hospitality apprentices need a to keeping the labour market primed with skilled
nancial incentive after each level of people. This is in part reflected in the survey data.
completion subsidies by the Government. 28% of respondents reported employees leaving the
I see this as the only way to motivate profession as a reason for an employees departure.
application from Australia.
When someone leaves your business, what is the
Hotel, Regional Victoria most common reason?

Chefs - Over the fi ve years to November

2019, the number of job openings for Chefs is
expected to be high (greater than 50,000).
Cooks - Over the fi ve years to November
2019, the number of job openings for Cooks is
expected to be above average

The data also shows a skewed career pattern,

both Chefs and Cooks display a notable drop off in
employment numbers between the 25-34 year and
35-44 year age brackets:

Chef employment continues to decline

from that point. This is consistent with all
occupations, but chef data indicates a lower
participation rate than the national average in
all age brackets outside 25-34 and 35-44. 457 visas - Retention
Cook employment indicates a greater degree The majority of 457 visa sponsors responding to the
of fluctuation in employment over time, survey appeared to employ staff on other temporary
suggesting cooks may re-enter the trade after working visas. It is reasonable to consider they may
the age of 44. have hired these employees through local recruitment
efforts, but it is also a possible indication of a shortage
Source: of Australians in the local job market.
http://joboutlook.gov.au/occupation.aspx?search=alpha&tab
=stats&cluster=&code=3513 Respondents were asked about their employment
http://joboutlook.gov.au/occupation.aspx?search=keyword&tab
=stats&cluster=&code=3514 of Working Holiday Maker Visa holders and Student
Visa Holders. While many positives were cited, the
overwhelming majority of businesses stated that
the work restrictions of these visa types presented
a major problem (85% for Student Visa Holders and
61% for WHM Visa Holders).

By contrast, in response to the benefits of sponsoring

The rules around a working holiday Visa 457 visa workers, employee retention was the single
should be more exible for regional areas. largest benefit cited.
Often they want to stay and have the skills
but they cant.
Hotel, Regional Victoria

12 13
 Transitioning to Permanent Residency
One of the few instances where a specifi c immigration
pathway between two different visa types has been
What percentage of your 457 visa holding
established in Australias legislative architecture is
the transition from a 457 visa to employer-sponsored
permanent residency. Essentially, those workers who
have been employed full-time on 457 visas for at
least 2 years may on that basis qualify for permanent
residency sponsorship subject to an offer of on-going
employment for at least two years going forward.
There are also mechanisms in immigration law for
hospitality establishments to sponsor employees for
permanent residency without the employees having
worked for two years previously. The rules to qualify
are more stringent.
Signifi cant changes to this transition pathway apprentices by survey respondents who are 457 visa sponsors
accompanied the Prime Ministers announcement
on the abolition of 457 visas. Chefs will still remain
eligible for transition, but with more stringent
requirements. It will be no longer possible to sponsor
Cooks for permanent residency under the new rules.
Key Findings
While it is not possible to know the basis for self-selection in deciding to take part
in the survey, the profi les of respondents suggest that the sample base is relatively
employees transition to PR?
diverse.
While there are weightings in relation to venue types, venue size, etc, and the sample
size is small, we believe there is merit in considering the fi ndings as indicators for the
pursuit of further research into the areas of training, recruitment and visa policy in
the hospitality sector, particularly where responses indicated a majority of responses
in one or another direction.
An example is the high proportion of employers in the hospitality sector
that fi nd local recruitment diffi cult, with more diffi culty experienced in
regional locations than in metropolitan locations.
A second example is the apparently higher incidence of employment of
Third-party data suggests that a growing vacancy rate in the hospitality sector
coupled with problems in the training framework and a propensity for early exit
from the profession appear to create structural impediments that inhibit labour
supply from the local market. Against this backdrop, key survey findings are:

The respondents were asked to comment on their
sponsorship activity, and the results suggest that
90% of 457 visa sponsors transitioned staff from 457
visas to permanent residency.
Transition to Permanent Residency appeared
marginally greater in metropolitan than regional
locations.
The data suggests wide-spread industry reliance on
these transitional pathways is integral to employers
use of sponsored visas to achieve longer-term
stability in their kitchens.
The announced changes changes which will prevent
the sponsorship of Cooks look set to disrupt this
signifi cantly.
- 85% of employers prefered local recruitment when it is available to
them. 457 visas are not a preferred avenue of recruitment, and used
only by a proportion of hospitality employers after other attempts
have proven unsuccessful;
- Rather than avoiding the training of local sta, 457 visa sponsors
exhibited a greater willingness to employ apprentices;

Our Conclusions - A notable proportion of 457 visa sponsors attempted to ll

vacancies through the employment of Working Holiday Makers
The AHA (Vic) and CCV both support and encourage members in the diverse training opportunities they offer and international students, a possible indication of a shortage of
and the efforts they apply to ensuring their staff receive training that makes for a high professional standard. Australians in the local job market;
The AHA (Vic) and CCV are also both aware that their memberships include numerous venues that do not
encounter problems with the recruitment of staff from their local or wider Australian labour market. Both - The major benet of the 457 visa program for hospitality employers
bodies, however, are conscious of the crucial role played by temporary visa holders for some of its members. is retention of sta;
The statistical results of this survey suggest reasons to differentiate the hospitality sector from other industries
in areas including: - The transition from temporary 457 visas to permanent residency is
- the support needed for vocational training a notable feature in the hospitality sector.
- the use of employer-sponsored visas;
- the role played by the transition to permanent residency in creating long-term successful settlement
opportunities

The organisers of the survey would welcome further investigation of the issues raised - particularly in relation
to co-ordinated and facilitative training and immigration policy with a view to a helping hospitality venues
achieve stability of employment within their kitchens.
14 15
TSS Immigration Australian Hotels Association (NSW)
www.tssimmigration.com.au www.ahansw.com.au
hello@tssgroup.com.au enquiries@ahansw.com.au
(03) 9421 1020 (02) 9281 6922

Level 3 131 Macquarie Street

7 Howard St Sydney, NSW
Richmond, 3121 2000
Victoria

Australian Hotels Association (VIC)

www.ahavic.com.au
info@ahavic.com.au
(03) 9654 7100

Level 1
1 Little Collins St
Melbourne, 3000
Victoria

Community Clubs Victoria

www.ccv.net.au
ccv@ccv.net.au
(03) 9419 8505

5/19 Gertrude St
Fitzroy, 3065
Victoria

Media Enquries
For all media enquries please contact TSS Immigration at hello@tssgroup.com.au or call 03 9421 1020