Australia’s Skills Recognition Gap Costs Economy A$4 Bn: CEDA
Synopsis
The think tank says thousands of migrants remain underemployed because overseas qualifications are recognised too slowly, urging faster reforms as migration returns to pre-pandemic levels.
Key Highlights
- According to CEDA, Australia is missing out on A$4 billion in wages each year because of its skills recognition gap.
- Returning Skilled Migrants earn between 10 and 15% less than their comparably-skilled Australian-born counterparts for the first two to six years after settling in Australia.
- The report recommended quicker recognition of foreign credentials.
A Committee for Economic Development of Australia (CEDA) report says the Australian economy is losing A$4 billion every year in wages it could be paying migrants whose skills and experience are not being recognised.
Many are underemployed, particularly in the first two to six years in Australia, and so earn 10 per cent less than Australian-born workers on average over this period, the report said.
Migration Continues to Shift
At the same time net overseas migration is expected to fall from 555,800 in the year to September 2023 to reach just above 3000,955 last year and then 225,000 by the 2027-28 financial year according to CEDA.
Of the 185,000 permanent migration places for this year, 90,000 have been reserved for migrants currently onshore and working in Australia.
Higher migration levels are being contributed to by New Zealand citizens, working holiday makers and temporary skilled workers, especially in healthcare and social assistance, it added.
The Committee for Economic Development of Australia noted one in three workers is an overseas-born person in healthcare, logistics as well as the professional and manufacturing industries.
Skills Recognition Remains a Challenge
Slow and costly skills recognition processes have seen hundreds of thousands of migrants working below their skill level in ICT and other industries, the report stated.
Many employers still dismiss overseas skills and experience because they are not easy to compare with Australian qualifications, according to SkillsAware co-founder and director Yasmin King.
She stated that employers tended to want someone who had done the same role in Australia rather than appreciating transferable skills.
SkillsAware has already launched pilot programs with organisations in construction, local government and a regional employment service provider to map the skills and qualifications of their workers.
AI Hiring Raises Concerns
King said increased utilisation of AI in recruitment may pose additional challenges to not having migrants’ skills recognised.
She said arguments surrounding the use of AI systems include that they can also have inbuilt biases, which work against applicants with overseas experience and qualifications.
CEDA said with an ageing population and ongoing skill shortages migration continues to be crucial and that the policies should concentrate on improving recognition of overseas qualifications.
Source: Information Age
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
You Might Also Like
Rising Prices or Market Rebalance? Understanding Housing Trends in 2025
NATO Vows Continued Support For Ukraine’s Peace
