Alongside many other industries, the hospitality industry is a major contributor to Australia’s economy and was one of the first industries impacted by COVID-19 and mandatory lockdown. Based on statistics from the Australian Bureau of Statistics (‘ABS’), Accommodation and Food Services generated revenues exceeding A$90 billion in FY2019 and employed over 900,00 people as of February 2019, which makes up 7.1% of the Australian workforce.
Those numbers have clearly been affected by COVID-19 as a drive through Sydney and its suburbia will show many locations (once) housing local dining institutions, now closed in the midst of uncertainty and mandatory lockdown.
Whilst the ABS Labour Force Survey predicted very strong job growth with between 25,001 and 50,000 job openings from 2015 to 2020 and Restaurant & Catering Australia (‘RCA’), (which is the national peak industry body) estimated demand for a further 28,000 cooks and chefs across Australia over the next 4 years, it is clear that there is a long path ahead for the industry to recover.
STSOL, generational shifts and confusion!
With the introduction of the STSOL and MLTSSL, occupations listed on STSOL can only obtain a Subclass 482 visa for up to 2 years (instead of the 4 years previously granted) and therefore are no longer relevant to providing an employer sponsored pathway for permanent residence after March 2018. The trickle down effect of this proposition is the immediate departure of talent and a shift in the education framework for a generation of potential culinary students (which we discuss in more detail below).
This has had a major impact on the hospitality industry with a number of hospitality occupations being placed on STSOL. One of the major drawcards for potential foreign candidates is job security.
As a consequence of these changes, employers can now only offer 2-year employment contracts and are unable to provide any incentive that they will support the applicant for permanent residence.
This has largely led to many of our clients reporting a reduction in high quality candidates and feedback from candidates that the shorter 2-year contract and a lack of a pathway for permanent residence is a huge disincentive for them to consider job opportunities in Australia rather than overseas.
Furthermore, it is a disadvantage to employers as these jobs require substantial training and proprietary experience in the business and to lose the candidates after 2 years poses a training expense that cannot be ignored. Therefore, it is in both the employer and candidate’s best interests to offer the candidate a contract with a longer term as it will allow the employer/employee to grow with the business and progress.
It is also important to consider the macro work force environment of Australia in the up and coming years when considering the hospitality industry and the overarching argument of this submission.
To compound the talent drought in hospitality, the fact is that we are currently in the middle of a generational shift when it comes to the makeup of the work environment. The Baby Boomer generation is in their soon – to – retire phase and Millennials are reaching their peak employment phases. By 2020 it is expected that millennials will comprise 50% of the global workforce.
By 2025 they will be expected to make up 75% of the global workforce. This is significant especially when we flesh out the characteristics of the millennial group including intangible qualities including mindset, psychology and other career drivers.
Compared to the Baby Boomers and the Generation X, Millennials are the most educated generation.
‘In 1976, less than a third (30%) of young adults had obtained a non – school qualification and only 5% had a bachelor degree or higher qualification. In contrast, over half (52%) of young adults had a non – school qualification, and around a quarter (26%) had a bachelor degree or higher qualification in 2011’.
By demographic construct, we are now witnessing a generation moving past the hospitality industry and dabbling in Arts, Humanity, Nursing, Education and Commerce, to list a few. Collectively, the skill set required by restaurants of Café/Restaurant Manager, Chef and cook, is not seen to be sufficiently possessed by millennials.
Furthermore, the millennials’ attitude in the workplace and work in general is distinct from previous generations with many reports suggesting that at least 50% of the millennial population would prefer to work under a freelance arrangement and this to be a growing trend.
Here are some statistics for millennials engaging in freelance work:
- 41% of freelancers obtained a freelance job online in 2015 – that’s a 11% increase on 2014 stats
- 69% of freelancers earned more than they did in their traditional employment within a year or less
- 73% of freelancers would recommend freelancing to family and friends
- 72% of freelancers believe the best days are ahead for freelancing
- 59% of freelancers are male
- 47% of freelancers are under 35 years old
- 17% of freelancers are over the age of 55
- 36% of freelancers have a university degree
- 33% of freelancers live in Sydney where job retention is by choice substantially fluid and tumultuous.
In addition to these statistics, I have been recently reminded by a colleague about the notion of the lazy Aussie who finds hospitality work too intense. A number of our hospitality clients have placed paid job advertisements online for three months or more and have not been receiving suitable skilled candidates from the local market. It is often that the businesses will receive only a few applications from Australian citizen or permanent resident candidates. Other applications received will be highly skilled candidates who hold temporary visas which only enable them to work in Australia on a part-time basis or for a short-term period.
Now add COVID-19 and lockdown to the mix and we have a recipe for disaster (pun intended).
COVID-19, rebuilding hospitality and the TSS visa!
Our hospitality clients are some of the hardest working entrepreneurs and managers that I have ever met. The challenges of running a restaurant are not lost on me and I marvel at how they manage to turn a profit despite the competition, human resource constraints and compliance risk.
Below you will find a now typical request for information from the department in respect of a position nomination for a restaurant.
Evidence of genuine full-time position and/or occupation alignment
In order for me to assess whether the position associated with the nominated occupation of Cook – 351411 is genuine and/or aligns with the nominated occupation as it is described in the ANZSCO, I require additional information. Please provide written confirmation that the nominated position is available within the business, and that the business wishes to continue with the application. Please provide additional information relating to the current nature of your business, business operation and the nominated position.
Whilst seemingly innocuous in nature, this type of request is more a loaded question. Seemingly, the department is asking how you could possibly validate sponsorship when there are over 800,000 unemployed with many of whom being in the hospitality industry.
Despite that statistic, the hospitality industry is facing a real threat that is nuanced, layered and masked under a response to COVID-19.