24 May

3 things to consider before hiring overseas contractors in Australia in 2018

Dane Latham

At Latham we’ve had the good fortune of having our skill needs met by Australian workers. However, some organisations in the construction and manufacturing industries don't have the same luxury, with many facing constant skill shortages and budget constraints. In such instances often the only option is hiring overseas building contractors to tap into a wider pool of skilled talent.

It’s no
secret that construction is a highly regulated sector, operating in a complex legal, bureaucratic and political environment with a range of laws, building codes, industry standards and stakeholders to take into account. The challenge of hiring overseas building contractors is no exception to this complexity - and a pressing consideration for the industry.

What’s more, there are a whole new series of factors to take into account given the recent changes announced to the
457 visa scheme for temporary skilled workers. These changes effectively tighten the controls and limit visa eligibility to a handful of occupations.

To help ensure that you meet any hiring needs for overseas contractors without harming your budget, project timeline, site safety and of course client satisfaction, we’ve broken down three factors to simplify the process of hiring construction contractors: legal considerations, timing and safety factors.


3 factors to consider when hiring overseas contractors in Australia

1. Legality

As of April 2017, the Australian Government abolished the Temporary Work (Skilled) visa (subclass 457) to replace it with the Temporary Skill Shortage (TSS) visa by March 2018. Until phase out, the 457 visa will see numerous changes, of which a notable one is the number of eligible occupations being condensed from 651 to 435. The aim of this change is to incentivise Australian businesses to prioritise local workers.

As a result, project managers can now only hire overseas contractors who have skills considered by the government to be in “short supply” in Australia. These are broken down into two categories:

  • the medium and long-term strategic skills list
  • the short-term skilled occupation list

Removals from the list of eligible skilled occupations that will affect the building and construction industry include:

  • construction estimator
  • conveyancer
  • electronic engineering draftsperson or technician;· floor finisher
  • plumbing inspector 

Other changes to look out for in employer sponsored permanent skilled visas include:

  • To apply for a visa, candidates must have at least two years work experience in their occupation
  • Applicants must speak fluent English
  • The permanent residence eligibility period will be extended from two to three years
  • The provision of penal clearance certificates is now mandatory
  • Applicants must be under 45 years old at the time of application 

Note that some concessions are available to those in regional Australia as different eligible occupation arrangements apply in these areas.

The short-term skilled occupations list will be updated every six months according to Department of Employment recommendations.


2. Timing

Given the key importance of maintaining a smooth delivery and meeting client expectations and deadlines, timing is an especially crucial factor to keep in mind.

In addition to the length of time it takes to actually put together a visa application with all the associated paperwork, you should consider the 457 visa processing time. According to the Australian government, 75 per cent of applications are processed in 51 days and 90 per cent are processed in six months.

Another important factor to consider for your project timeframe is the duration of time for which the contractor in question is able to stay and work in Australia, depending on whether they’re on the two or four year stream. The TSS visa program allows short term workers to stay for up to two years, and medium-team workers to stay for up to four years.


3. Hidden costs

Of course, it’s dangerous to assume that by contracting work to overseas professionals you’re cutting costs. Contracted employers must be paid the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold requirements, which were set at $53,900 on 12 April 2016.

Other important factors to consider are the economic and time-based costs involved in training an overseas worker, given the varied levels of training in different countries.

This is particularly crucial in regards to OH&S issues. For the sake of maintaining construction safety, you should always ensure that overseas contractors undertake necessary safety training and site-specific briefings to make sure they’re familiar with Australian context. After all, every worker plays a role in keeping a construction site safe.

If you’re looking at employing staff from overseas on your next big project, use our Project Efficiency Template Pack to keep track of contractors. Click the image below to get the free spreadsheet templates. 


Dane Latham

Dane is Latham’s trusty Office Manager. For more than 20 years he’s been looking after all things finance, HR, marketing and IT here. As an avid supporter of Australian made and owned products, Dane is most proud of the role that Latham's premium grade products play in iconic Australian buildings like the Sydney Opera House and the MCG, as well as international structures such as the Petronas Twin Towers in Malaysia.

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