Australia’s skilled migration settings ‘not fit for purpose’, HR warned

Australia risks missing its housing, infrastructure and productivity goals unless it urgently overhauls its skilled migration settings, according to immigration law specialist and Vialto partner, Cherie Wright.

Speaking with HRD, Wright says the current system is out of step with labour market realities – especially for regional employers and organisations seeking specialist trades and intra‑company transfers – and is weighed down by red tape and slow processing.

Vialto has lodged a detailed submission to the federal government’s inquiry into the value of skilled migration, calling for targeted reforms that would directly impact how HR leaders attract, sponsor and retain global talent.

Skilled migration: Critical, but constrained

Wright argues that migration is “part of the solution, not the problem” in the current environment of housing shortages, major infrastructure projects and persistent skills gaps.

“Yes, we have a housing shortage, but the issue is that to fulfil the government’s commitment on housing, you need trades workers,” she said. “We have a chronic shortage of trades workers in Australia that we can’t fill from the domestic market, so we have to rely upon overseas workers.”

On top of housing, employers are competing for the same finite pool of skills to deliver mega-projects such as the Brisbane Olympics and AUKUS-related defence work.

For HR leaders, that means global mobility is increasingly central to workforce strategy – yet the framework they must use is often too rigid, slow and complex to meet business timelines.

Raising the age bar

One of Vialto’s headline recommendations is to raise the upper age limit for employer-sponsored permanent migration from 45 to 55 and expand age exemptions for critical sectors such as health, aged care, education and construction.

Wright highlighted a case study of a regional healthcare provider struggling to secure geriatric nurses: “They can sponsor under the 482 temporary work program where there’s no age limit, but where they’ve got nurses above the age of 45, the only way they can be sponsored for permanent residence is where they can meet the rather limited age exemption.”

Currently, that permanent pathway is largely restricted to very high-income earners – those above the Fair Work high income threshold (around $183,000). For frontline roles in health and care, particularly in the regions, market salaries will never reach that level.

Vialto argues that age settings should reflect longer working lives, the time needed to reach senior roles, and the need to make regional and critical roles genuinely attractive to experienced talent.

For HR, a higher age cap would significantly expand the available candidate pool – particularly for mid-career and senior professionals who bring deep expertise but currently hit a hard barrier at 45.

Regional Australia: Good visa, wrong settings

Wright says regional employers are also being held back by the design of the Skilled Employer Sponsored Regional (subclass 494) visa – a five‑year visa with a path to permanent residency after three years living and working in a designated regional area.

“I think by tweaking that program they can really achieve what they want to achieve,” Wright explained.

“But one of the restrictions… and why a lot of our clients don’t currently use it is, for the same reason, there’s an age limit of 45 with very limited age exemptions.”

On top of that, the 494 carries a mandatory skills assessment requirement in many cases, adding both cost and time. Bodies, Wright said, are “very prescriptive”, which can shut out otherwise well-qualified candidates.

“There’s just a bit more red tape involved in that employer sponsored program and so as a result it’s just not as attractive,” she added.

Yet, from an HR perspective, the model is sound: the visa ties workers and their families to the region for five years and allows them to pursue permanent residence without further employer sponsorship once they’ve met the residency and work requirements.

Vialto is urging government to relax the age limit and expand exemptions for regional visas, remove mandatory skills assessments for regional visas except where licensing is required, and simplify regional sponsorship by relying on Regional Certifying Body approval and streamlining Designated Area Migration Agreements (DAMAs) into a single, concurrent process.

These changes would make the regional pathway more usable for employers while still achieving the policy goal of long‑term settlement in the regions.

Occupation lists and specialist trades

Beyond age limits, the way occupation lists and labour agreements operate is causing real pain for HR teams, especially in construction, engineering and mining.

Wright cited an engineering client with large regional contracts who simply cannot find domestic workers for roles like scaffolders, riggers and crane, lift and hoist operators.

“They’re specialised roles, but they’re not on the current occupation list, which is restricted to what they call ANZSCO skills level 1 to 3,” she explained.

Because these specialist trades are excluded from the core skills occupation list, employers are pushed into complex, slow pathways.

“With one client we worked out they would essentially need to look at five different agreements, as well as their own company-specific labour agreement, just to get the skills that they need,” Wright said. “It’s crazy.”

Vialto’s submission calls on government to broaden the Core Skills Occupation List to include more of these critical trades and to reduce reliance on labour agreements and DAMAs for clearly in‑demand roles.

For HR, a broader list and simpler access would mean fewer bespoke agreements to negotiate, clearer, more predictable recruitment timelines, and more flexibility to deploy workers across both regional and metropolitan sites.

Red tape and processing times

According to Wright, the biggest issue that needs addressing is processing times. Currently, it can take up to six months.

Under the previous Temporary Skill Shortage visa, certain employers – such as those in health, education, regional Australia or accredited sponsors – received priority processing under a ministerial direction.

By contrast, the new Skills in Demand visa, introduced in December 2024, currently prioritises only the “specialist” stream (for those earning above $141,000), with everyone else processed largely in order.

“So even if you’re talking about AUKUS projects, for example, unless the person is earning above $141,000, they’re just going to come through under the same core skill stream as everybody else and they may take up to seven months to process,” Wright said. “For a once‑in‑a‑generation project, that’s just not feasible.”

Vialto is urging the government to reintroduce targeted priority processing for regional, health, education and accredited sponsors, introduce streamlined processing and potential auto‑granting of visas for low‑risk applicants sponsored by accredited employers, and consolidate sponsorship applications and provide more transparent processing timeframes.

For HR, that would mean more predictable onboarding timelines and less project risk linked to visa delays.

A dedicated intra‑corporate transfer (ICT) visa

Wright also said Australia is lagging comparable economies by not having a dedicated intra‑corporate transfer visa, which is found in both the UK and US.

Currently, even intra‑company transfers are subject to labour market testing and other requirements, with some limited workarounds.

Vialto is recommending a new ICT visa that would exempt genuine intra‑company transfers from labour market testing, occupation lists and English thresholds, provide priority processing, and include safeguards such as salary thresholds and caps.

From an HR lens, a tailored ICT pathway would allow global companies to move key talent quickly and predictably into Australian operations, supporting knowledge transfer and project delivery without unnecessary administrative friction.

Labour market testing

Perhaps Vialto’s most provocative recommendation for HR policymakers is to abolish labour market testing (LMT) – or at least radically simplify it.

Wright argued that if Jobs and Skills Australia has already identified occupations as being in shortage, forcing employers to run highly prescriptive advertising campaigns adds little value.

“Why do you need to advertise as well? It doesn’t really make any sense,” she said. “It only really makes money for people like Seek.com. It doesn’t really serve any other purpose.”

Under current rules, employers often must advertise for at least four weeks, use specific platforms, include defined content in ads, and lodge nominations within a set timeframe after advertising.

For overseas businesses entering Australia for the first time, Wright says, these requirements are especially confusing.

Vialto’s submission proposes that, if LMT is retained at all, it should be shorter (e.g. 14‑day advertising period), less prescriptive about salary disclosure and platforms, and waived in clear low‑risk scenarios, such as existing employees of the sponsor or accredited sponsors able to provide a robust business case.

Skilled migration and HR

While it’s unclear how much of Vialto’s wish list will be adopted, Wright said there are still practical steps HR and talent leaders can take in the current environment:

• Map critical roles against occupation lists to understand which streams are available – and where labour agreements or DAMAs may be unavoidable.
• Plan earlier and build in longer lead times, particularly for roles not eligible for specialist or priority processing.
• Leverage regional pathways where they work, especially for roles and candidates that meet current age and skills settings.
• Engage closely with immigration advisers to manage risk on complex files and to explore creative but compliant options.

Above all, Wright urged HR professionals to stay engaged in the policy conversation.

“These are business-critical issues,” she said. “The more employers – and HR leaders in particular – can articulate the real-world impacts of delays and red tape, the more likely we are to see a migration system that actually supports growth, innovation and the regions that need it most.”