Therese Raft
Welcome to Navigating the New Normal – Grant Thornton’s podcast exploring trends in business and the marketplace.
I’m Therese Raft and today I am joined by Thomas Isbell, partner and Remunerations Tax specialist. In light of the new FTA with the UK – agreed in principle – including new visa arrangements for Australian and British citizens, and increasing demands from businesses for better access to skilled migration, today we’re talking about the current state of play for global mobility and what the future of skilled migration could look like.
Welcome, Tom!
Tom Isbell
Thanks Therese for having me.
Therese Raft
So, Tom, there’s a lot of unknowns at the moment. Last Friday the Prime Minster outlined a bare bones plan to reopen Australia to the world and by all accounts, our international borders likely won’t open until mid-next year at the earliest. What kind of pressure is this putting on businesses?
Tom Isbell
Well Therese, I think it's putting a huge amount of pressure on businesses. When I think about this, just across my own experience, in my own client base – in recent months, there's been a lot of inhibitors for our clients in their ability to be able to attract talent – for one. In their ability to be able to, raise capital and access markets. In their ability to make sales or resolve supply chain issues. And I think the longer that we stay closed, the more and more difficult this is… this is going to get.
Just this morning I was reading an article that was in the AFR, and it's mostly focused around start-ups. They were really sort of focused on those start-ups in their ability to survive and create scale so long as they can't travel. It's interesting because a lot of our clients have taken this issue as a reason to pivot. And a lot of them have gone to new solutions in terms of how they deal with these issues. For example, a lot of our clients are looking to retain talent in overseas locations where the person sits, rather than bringing them into Australia as they traditionally would have done. Whilst this is a great solution and fixes a lot of short term issues, especially around, you know the tech space and other types of roles where people can work remotely, there are issues that are arising in terms of the compliance risks and also, I suppose, the ongoing litigation risk associated with hiring people in foreign jurisdictions.
Therese Raft
And there’s a bigger, badder, longer-term issue as well. The Government has also recently released the Intergenerational Report, predicting we’ll have a much smaller and older population in the years ahead – meaning we will need to rely on migration for growth.
Tom Isbell
Yeah, and I mean, I suppose that's always been the case. I read an article the other day that said that we have 30% of our citizens were born overseas. So whilst that's nothing new, it does feel like we're going to have to focus more on migration to get that growth and to maintain that chequebook that we rely so heavily upon. And the other thing is we're seeing…is we're seeing expats starting to spill out of Australia. You know, I'm acutely aware this of this both on a personal level and a professional level. Early in the piece, we saw a lot of expats coming home. They'd already started coming home to Australia from Hong Kong. Then as COVID started to bite, we saw Australian expats coming home from Singapore, New York, you know, the US the UK as things got worse there. And with that, they brought a lot of capital with them. And we've seen a lot of, I suppose, high level of skills returned to Australia and bringing capital with them. The tide turns and we start to see the Northern Hemisphere open up. I really start to see more and more, both my professional network and my personal network, look to the Northern Hemisphere as not just somewhere that they'd like to be professionally, but somewhere they'd like to be personally. And I feel like the longer we stayed closed, the more we're going to see that skills extract and the departure of skills from Australia into the Northern Hemisphere.
Therese Raft
That’s certainly something I think all of us have experienced in our personal and professional networks. So when borders open – whenever that may be – can we expect a deluge of skilled people to want to come to Australia?
Tom Isbell
I certainly hope so. I came here from the UK many, many years ago. And certainly the lifestyle is what attracted me in the first place. But I think that – you know – the longer that we stay shut the more the Northern Hemisphere business’ going to be looking to swallow up that talent. You know, we've read about the skills shortage in the US. We read about the skills shortage in the UK. They're coming out of lock down. They do have probably deeper pockets than a lot of organisations here so they can afford to do more with remuneration. But if it's hard to get into Australia, while people might be accepting roles here currently, they will obviously have to make alternative arrangements if those rolls can't be sustained for a longer period of time. We do need to remember that – you know – when we're looking at that level of skills required to really stimulate an economy, there is a bit of a shortage of that talent pool of STEM type roles and so on and so forth. So we really are competing on a global level, not just a local or regional level.
Therese Raft
Like you say, the competition for talent is now global – not just within Australia. What do we need to do to incentivise people to come here? I’m not sure we can just rely on lifestyle.
Tom Isbell
Yeah, it’s good. No doubt Australia does have a great standard living. There's no two ways about that. I suppose when you think about the high achievers of the world, if you're in finance you probably want to go to New York or London because they're the financial centres. If you're in IT you probably want to go to Silicon Valley. I think one of the many things that we need to do in Australia has start moving to be perceived as a centre of excellence in the areas that we want to compete in.
And I know that there's Minister Peter Verwer, in a special envoy for global business and talent attraction, has been working across multi agencies to try and achieve that. What they're trying to do is look at things like the time it takes for businesses to set up here, incubation for great ideas, especially in the fields that we want to operate in, and really making some great moves in that direction. I mean, a lot of those efforts are some more inhibited so long as the borders are shut.
And we are, as a nation, with the Free Trade Agreement that we signed that sign with UK, trying to position ourselves as a springboard into the Asia Pacific region. And Peter Verwer’s efforts in that vein are going in the right direction. But we do have that ongoing issue that Singapore has that mantle pretty well tied up already. And they already have the ease of doing business. And they have additional tax incentives that we don't currently have. And are possibly quite attractive to organisations looking for a suitable jurisdiction.
Therese Raft
So that all sounds like positive movement. However, we can’t ignore the fact that the way we work has fundamentally changed. We’re seeing many stories come out from different parts of the world about companies telling their people they can work from home “forever”. So if you can work from home – or from wherever you want in the world – why would anyone want to relocate to Australia?
Tom Isbell
Well, obviously, in my opinion Australia is the best place in the world to live. Hence why I’m here so I’m a bit biased! But I think we do have the tyranny of distance and that’s something that we should also be cognisant of. I mean, flexible working arrangements are, I think, somewhat oversold by some organisations. But they are definitely a part of our future and going to be very much part of our way of working into the future – and I think forever. You see some organisations are starting to encourage or call people back into the office, and that's their cultural decision. However, if you are going to have a flexible working arrangement, you do have to be cognisant that there is a lot of risk associated with that. And it's not just the obvious risks associated with employment law or tax. Really, you can't control where people are, and our ability to collaborate if you're not seeing each other face to face on a regular basis.
I think there's going to be a lot of movement towards that remote work infrastructure put in place. And obviously there's things such as cyber risk and so on and so forth that people are talking a lot about. Also thinking about the health and wellbeing of your team, wherever they may be. Thinking about – you know – how you can manage productivity, especially if you've got a multi-time zone issue. But also how do you manage the day-to-day communication interactions with each other? So what I think that the flexible working arrangement is very much here to stay, I think that firms will find that there's difficulties associated with managing not just the compliance and risk side of things that we talked about a lot, but also managing the day today practicalities of doing so.
But I think – you know – in that war for talent, as we were talking about earlier, people are going to expect the ability to work remotely, and the ability to work where they want, and to some degree when they want, with a level of autonomy that they want. So it's something that we will need to be cognisant of as organisations and build into our overall value proposition.
Therese Raft
So that's flexible working. I am wondering, though, are you seeing any other interesting or innovative ways that companies or clients are looking to remunerate their people or attract people, incentivise them, retain them?
Tom Isbell
I think the key, the key that we're seeing now is far more flexibility around that. And I think one of the points that way see quite a lot is the bigger, more established organisations would typically have policies and procedures associated with attracting and retaining people – and are sometimes less able to pivot from that framework into a new framework. And what we're seeing now is a lot of the smaller to medium size enterprises are able to do that a lot quicker, and what they're offering is different incentives, such as employees share schemes where appropriate. But also looking at job share arrangements and pivoting and types of roles that people do to make sure that they can be as flexible as possible and retain the staff that they have, but also the ability to attract staff from other areas where they may not have been able to do so in the past.
Therese Raft
Well, Tom, that sounds a little bit like a levelling of the playing field there.
Tom Isbell
I hope so. Fingers crossed.
Therese Raft
If we turn to the Government now. Obviously they have priority skill lists for migration, and new visa arrangements under negotiation – with, I’m sure, plenty more to come... Is there anything we’re missing from them, perhaps in terms of policy or investment that can help make Australian companies more attractive for skilled migrants down the track?
Tom Isbell
I mean, it would be interesting to see what the global business and attraction team do. As I said earlier, they’re taking big strides towards attracting businesses and talent to Australia. And you might remember that the UK had their whole “The UK PLC” is open for business campaign and there was a lot of moves made in the UK to make it simpler and easier for businesses to set up and operate there.
So I'm expecting to see something broadly similar come out of the team here. But I suppose at a really basic level – you know – if we want to talk about once the borders open, getting expatriates into Australia… You may remember many years ago we had the Living Away From Home Allowance regime, which was almost a concessional…concession for expatriates relocating to Australia. And I'll be the first to admit, perhaps it was possibly a bit too generous, and perhaps it was maybe too readily available to people taking advantage of it and exploiting it. However, since that's been restricted so that the expatriates coming in can't use it, I really do feel like we're left wanting for any type of concession. And it's very expensive to get people to relocate here in the first place. So, I really would like to see maybe a reintroduction of the Living Away From Home Allowance regime. Perhaps it will be somewhat limited – a shorter period? Also, I’m keen to see what the ASEAN visa regime will look like. I see that's really targeted at the agricultural industry. But I wonder if we could leverage that ASEAN visa regime for broader skill shortages in Australia. Obviously, that would help contribute to the overall migration deficit in the medium term as well.
Therese Raft
So plenty to look forward to. But in the meantime, do you have any advice for companies struggling with global mobility – or the lack of global mobility – in their organisations right now?
Tom Isbell
Yeah, I think that the interesting thing about that question is I don't really look at our industry as global mobility per se anymore. It's more of a global talent management role and what we're really looking at is, as I mentioned earlier, if you have a traditional mobility policy, then…and you're trying to operate within that traditional mobility policy, I suggest that you probably want to tear that up and start again. And your framework should offer the flexibility that you need to employ talent where they are, as required. To deploy talent to where they may want to be, as required – and offer the flexibility to do that. But also, I suppose, the rigidity to manage the risks associated with it within your organisation's risk parameters. That's the greatest piece of advice I could give you in the current climate.
Therese Raft
Well, Tom, thank you so much for your time.
Tom Isbell
Thank you, Therese.
Therese Raft
Can people track you down on LinkedIn, phone or email if they would like to talk more about what’s next for skilled migration and global talent management?
Tom Isbell
Yeah, absolutely. My contact details are on all of the above, Grant Thornton’s website, or also on LinkedIn.
Therese Raft
Wonderful. If you liked this podcast and would like to hear more, you can find and subscribe to Grant Thornton Australia on Apple Podcasts or Spotify.
