Presentation March 2021 on the opportunities for Filipino recruitment agencies to place skilled workers in Australia despite COVID

1. Australian Economy and Emerging
From COVID: The Future for
Filipino Skilled Workers
Tony Mitchener
Manager, In Work International Pty Ltd
and
© Australian International Skilled Recruitment Services
March 2021

2. Introduction
• Impact of COVID:
• Lockdowns and first wave response
• Unemployment and underemployment
• China
• GDP
• Structural consequences
• Future demand for Filipino Workers

3. Impact of COVID
• All industries impacted by lockdowns, except emergency services & health
• Many employers used COVID & lockdowns as an opportunity to dismiss
problematic Australian staff:
onormally not possible due to restrictive laws about workplace dismissals
• Australia’s international borders closed on 22 March 2020 (first time ever):
oentering Australia: requires a visa, border exemption & must quarantine (14 days)
oAustralia’s success in minimizing COVID has been ‘hard border’ (unlike UK)
• Immediate responses to COVID outbreaks (ie major cities going into
lockdown and businesses having to close)

4. Lockdown Melbourne CBD: lunch time, work day

5. Lockdown Melbourne: Saturday night

6. Contraction in Employment in Australia 14 March- 2 May 2020
Source: https://theconversation.com/australias-first-service-sector-recession-will-be-unlike-those-that-have-gone-before-it-137994

7. • Impact on economy from COVID related dispute with China:
oeconomic coercion & retaliation because Australia called for international
enquiry on origins of COVID
oChina accounts for almost 39 per cent of Australia’s exports
oWill impact on industries employing Filipinos that are reliant on exports to China
• China significantly increased tariffs on Australian goods (despite FTA):
oMore than $20 billion of exports impacted
obarley, wine, beef, lamb, coal, cotton, lobsters, timber
otariffs prevent these exports being sold at a reasonable price
oChinese students discouraged from studying here when economy re-opens

8. • Unemployment rate increased from 4.9 per cent (December 2019),
peaking at 7.5 per cent (June 2020): now dropped to 5.8 per cent
oOver year to February 2021, employment decreased 1,800 people
• National level data masks variations at a state level in unemployment
and whether a large proportion of state population was unemployed
• Also masks gendered inequality:
omost job losses occurred in highly feminised industries (ie services sector)

9. July: 7.5%
May: 7.1%
April: 6.4%
March: 5.2%
August: 6.8%
October: 7%
January: 6.4%
Melbourne Lockdown

10. • Underemployment rate (ie unemployed and those looking for full
time work, but can only work part time) shows a more extreme
snapshot of the impact of COVID
• underemployment rate increased from 8 per cent (December 2018)
to almost 14 per cent (June 2020), before dropping to 8.5 per cent
(February 2021):
• Again, national level data masks the different impact on men and women
• for women the underemployment rate peaked at 15 per cent, while that for
males peaked at 12.3 per cent

12. • Impact of COVID for different industries depended on the amount of public
contact in which the business was engaged:
o …..and whether it could adapt to a workforce that worked from home
• Many industries with multi layers of middle management found working
from home accelerated push for delayering businesses and introducing
flatter structures:
o Already in play before COVID, but has now accelerated
o White collar middle managers most at risk
o businesses now realise that middle management can be counter-productive
o Senior managers realise opportunities to be gained by empowering lower level staff

13. • Significant employment restructuring:
o move online
o increased automation
• Acceleration of trend moving jobs from permanent to contract:
o Concerns about future of the business and how best insulate it from economic shocks
o significant impact on professional jobs that are eligible for 482 skills visas
o Particularly noticeable in businesses involved in professional services
o Businesses now buying in ‘skills & mindsets’ they require for a specific period of time
o Often ‘skills & mindsets’ can not be found in only one person
o Businesses usually compromise & find best fit for a full time role even if the person did
not satisfy all requirements
o Now businesses are contracting 3 ‘subject experts’ for 3-4 months on a part time basis,
rather than having a full time permanent employee on the payroll on an ongoing basis

14. • Working from home:
o Huge impact on work (CBDs deserted), empty offices
o Despite initial challenges, most have adapted well
o Businesses and Government found an increase in productivity due to:
 Lack of visibility to senior staff meant that many went ‘over and beyond’ to demonstrate their
usefulness and their work
 Concern that the supervisor may think that they are not working as regularly
 staff had flexible hours (ie children at home due to schools, child care closed): worked when
convenient
o Many staff do not want to return to the office
o Some agencies are rotating staff into the office for 1-2 days per week
o Work that was previously done by overseas skilled workers (ie predominantly professional),
who were required to work from home in 2020, may see that work in future be outsourced
overseas and not require overseas skilled workers to be physically working in Australia

15. • Industry level data masks the impact on sub sectors:
owhile retail dropped overall, grocery retailers expanded (ie home delivery
services);
onon essential retail (ie electrical, clothing, fashion and bookstores) closed
oRetailers that already engaged in online sales or were able to move quickly to
an online platform, found that businesses expanded significantly
• Some industries have expanded:
oHardware stores (growth in ‘do it your-self’ or home renovations)
oOnline education and training

16. • Many overseas skilled workers lost their job due to businesses closing
or were stood down due to lockdowns:
oMany could not afford to live in Australia without income, visas expired &
returned home on sweeper flights (Philippines, Brazil)
oGovernment estimates around 500,000 temporary visa holders left Australia
(includes international students)
oOverseas skilled workers did not attract JobKeeper wage subsidy for employers
oMost have now returned to work and are very busy (ie overtime)
oeconomic growth phase means skills shortages have worsened, due to:
o Natural attrition (retirements & older workers leaving industry & work elsewhere)
o Skilled workers leaving Australia
o Not having incoming skilled workers for 1 year

17. • Skills shortages persist:
oExisting shortages before COVID have worsened
olack of new skilled workers since March 2020
o5 years to FY 2018-2019, temporary skilled workers 83,000 per year
oFY 2019-2020 (4 months COVID), temporary skilled workers: 55,060
oFY 2020-2021 (up to Dec): only 20,893 temporary skilled workers:
 Most of these skilled workers were already in Australia
 Only 2,795 of those were overseas and obtained visas

18. • Australian economy is now growing again:
oAustralian unbroken record (29 years economic growth), until COVID
reduced growth by 0.3 % (March 2020 qtr) & by 7 % (June 2020 qtr)
oGDP increased more than 3.4 % (September 2020 qtr) & 3.1 %
(December 2020 qtr):
oFirst time an increase of this magnitude in 60 years
oGovernment is projecting:
o5 % GDP growth for 2020-2021
o4.5 % GDP growth for 2021-2022

19. • Australian economy is only 1.1 per cent smaller than before COVID:
oUK: 10.5 per cent smaller
oPhilippines: 9.5 per cent smaller
oItaly: 9 per cent smaller
oFrance: 8.5 per cent smaller
oCanada, OECD average, Germany, Japan: all around 5 per cent smaller
oUS: 3.5 per cent

20. Challenges Faced by Employers and Placement
Agencies
• Skills shortages:
oOngoing and worsening
oGovernment acknowledges that the border closure has meant that Australia
has a skilled migration shortfall of more than 200,000 people
• Australian border remains closed until mid June 2021
• Border exemptions:
oNot uniform application:
 ie diesel mechanics getting exemptions to work for mining companies, but
car and truck dealerships unable to obtain exemptions
onumber of exemptions granted are restricted due to hotel quarantine places

21. • Perception that impact of COVID & China means there are many
unemployed people across all industries:
oimpact is not uniform in all industries
omany question need for overseas skilled workers due to concerns that
unemployed Australians will miss out on jobs
oend of JobKeeper in March 2021 may read to a rise in unemployment
oemployers of around 900,000 workers are still receiving JobKeeper
onumber of industries at risk at end March 2021 to job losses

22. Source: https://www.businessinsider.com.au/jobkeeper-job-losses-industries-travel-accomodation-aviation-lay-offs-2021-3?utm_source=Business+Insider+Australia+-
+10+things+you+need+to+know+in+the+morning+in+Australia&utm_campaign=0bc3c8334a-businessinsider_2021_03_10&utm_medium=email&utm_term=0_8a990bd96b-0bc3c8334a-280779749

24. • Job advertisements:
oUp 19.8 per cent compared to February 2020
oCleaning, sanitation & community & social services: up > 60% (cf Feb 2020)
oHospitality and tourism: down by 40 per cent

25. • $1.2 billion JobTrainer provides 50 per cent wage funding for first year of
apprenticeship:
ofunding ceases for new applications in October 2021
oto lead to 70,000 additional apprentices and trainees
oLikely that apprentices will lose their jobs when wage subsidy expires
osome occupations in shortage may not be eligible for skilled visas 4 years from now
oUnlikely to be successful:
 Apprentice attrition rates needs to decrease: approx 52 % of apprentices resign
 Many young people do not want to become apprentices
 Most applications are for trainees rather than long term in trades (ie low-paid
retail and hospitality jobs compared to apprentices

26. Future Demand for Filipino Workers
Short Term (ie next 4-5 months) demand will be contingent on:
• Number of Australians stranded overseas seeking to return (around 36,000):
oThey require flights (scarce) and quarantine spots (scarce)
• DoHA granting border exemptions:
ooccupations eligible for exemptions needs to include supporting essential services
• Additional places for quarantine:
oThis limits the number of people entering Australia
• Pressure on Australian Government from industry to open border for skill workers

27. Long Term (>6 months) contingent on:
• Borders to open to skilled workers & international students in July 2021
• the number of quarantine places and whether they increase
• success of vaccination and whether variants develop
• countries being proactive with vaccination
o Philippines: 50 per cent of population will not be vaccinated until May 2022

28. Forecasts for 50 per cent of Population to be Vaccinated
2021
April: Britain July: Australia
May: USA October: China and Korea
June: EU
2022
January: Thailand, Malaysia May: Philippines
March: India, Indonesia
Source: Goldman Sachs estimates

29. Job Orders with POLO 2020-2021
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Total
Metals, Machinery & Other Related
Industries 380 481 199 13 155 50 1 105 2 60 72 83 1,601
Electricity, Electronics & Other Related
Industries 11 86 33 1 25 15 5 176
Agriculture 4 28 13 11 27 5 25 36 149
Construction & Other Related Trades 2 36 23 20 34 115
Healthcare Industry & Professions 41 22 11 5 1 1 7 4 5 2 8 1 108
Engineering & Related Industries 42 11 3 5 1 2 2 1 17 2 16 102
Professionals- Accountants, Tax
Managers, Multimedia Specialists etc 16 23 8 3 2 2 4 1 2 3 3 6 73
Hospitality Industry 11 11 9 13 1 3 1 1 1 51
Food Processing 3 3 1 5 23 35
Seabased Professions- Fishermen,
Deckhands, Roughneck, Stewards 1 17 2 3 23
Total 511 718 299 47 241 55 8 108 9 19 97 113 46 162 2,433

30. • Australian Parliament has a review on migration and impact of COVID:
• Joint Standing Committee on Migration looking at impact of COVID and fine
tuning required for skilled worker visa programs
• Opportunity for PH Government to make submission before end March 2021
• Prime Minister has already flagged:
o Focus for agriculture and hospitality
o Visa conditions tailored to regions
• Opposition flagged concerns with large numbers of temporary visas issued and
prefer permanent visas:
o Permanent visas mean that skilled workers could be on less than $53,900 (the minimum for
temporary visas)
o Increased risk to employers regarding long term employment as worker can move to another
employer at will
o Permanent visas are paid by the candidate not the employer

31. • Interim Report issued 18 March 2021:
o12 recommendations
oEase labour market testing
oAbolish Skilling Australians Fund:
 If retained, provide exemptions for employers that spend at levy on training
oSkilled workers in certain industries be permitted to work for multiple employers
without new applications
oPriority Migration Skilled Occupation List (PMSOL) be expanded urgently to
include: chefs, veterinarians, care and restaurant managers and seafarers
oPMSOL be expanded: focus on civil engineers, electrical engineers, cooks, motor
mechanics, carpenters, electricians, hospitality, health, trades & manufacturing
oThe various Skilled Occupation Lists be reviewed
oReserve places on flights and quarantine for migrants

32. ANY QUESTIONS
tony@inwork.com.au
+61 408 084 525

33. Australian GDP Growth 1960-2021

34. Drake Australia CEO, Christopher Ouizeman described it as a "major shift" in the
employment landscape.
“….You know organisations can avail themselves of high-end technical specialists for
defined periods of time for a fraction of the cost of putting someone on a permanent
payroll," he said.
"The bottom line is companies are frightened,… but it doesn't stop them from
wanting to progress, and contracting is an elegant solution to that problem….“
Source: https://www.abc.net.au/news/2020-08-19/some-jobs-lost-forever-as-coronavirus-pandemic-drives-
change/12571648?utm_source=sfmc&utm_medium=email&utm_content=&utm_campaign=[news_sfmc_newsmail_am_df_!n1]%3a8935&user_id=1effc0ea37d2bdded477ba170f1ba0a
cee6e5329138923d1661aa2db90e14b5a&WT.tsrc=email&WT.mc_id=Email|[news_sfmc_newsmail_am_df_!n1]|8935ABCNewsmail_topstories_articlelink

35. Employees on JK 1.0
('000)
Share of pre-COVID
employment (%)
Employees on JK 2.0
('000) (Dec qtr)
Share of pre-COVID
employment (%)
Change in number of
employees (%)
Accommodation and
Food Services
317 34 154 17 −52
Arts and Recreation
Services
122 49 77 31 −37
Construction 420 36 217 18 −48
Education and
Training
131 12 65 6 −50
Health Care and Social
Assistance
373 21 81 5 −78
Professional, Scientific
and Technical Services
450 39 215 19 −52
Rental, Hiring and
Real Estate Services
111 52 49 23 −56
Retail Trade 323 26 104 8 −68
Transport, Postal and
Warehousing
174 26 112 17 −36
Wholesale Trade 172 44 49 12 −71
The sectors leaning on JobKeeper
Average number of employees receiving a JobKeeper 1.0 payment over April to September, versus average number of employees receiving a JobKeeper 2.0 payment over October to December, by selected industry.

36. • ABS survey (March 2021) assessing impact of COVID found that a
large proportion of people will upskill in the next 6 months (ie study
or train) to adjust to the changing job market:
o18 to 64 years olds: 30%
oaged 65 years and over: 4%
oPeople employed: 29%
oUnemployed and left labour market due to retirement, disability: 17%
oborn overseas: 34%
oMigrants arriving in the past 10 years: 25%
oPeople born in Australia: 24%