Skills in Demand visa falling short for Australian employers

Australia's Skills in Demand visa is struggling to deliver on its promise of a faster, simpler pathway to filling critical workforce gaps, with processing delays of up to seven months and a restrictive occupation list leaving employers in limbo, according to immigration law specialist Cherie Wright, partner at Vialto in Sydney.

Vialto, a silver award partner of the HR Awards 2026, advises some of Australia's largest organisations on corporate migration and global mobility.

Introduced in December 2024 to replace the former Temporary Skill Shortage (subclass 482) visa, the Skills in Demand (SID) visa was designed to streamline employer-sponsored migration under three streams: Core Skills, Specialist Skills, and a forthcoming Essential Skills stream. But nearly 18 months on, Wright says the system is still falling short for many businesses relying on overseas workers to plug genuine skills gaps.

"I don't know if it necessarily simplifies the program when you have the bulk of the people still having to meet an occupation list," Wright told HRD.

The gap between policy intent and reality

Analysis by Jobs and Skills Australia (JSA), published in May 2026, found that the SID program is broadly meeting the government's migration strategy objectives, but noted data is still limited.

However, Wright points to a more telling finding buried in that same report: over 90 per cent of occupations being sponsored under the SID visa would have qualified under the old Temporary Skill Shortage (TSS) visa program, which was subject to far more rigid occupation lists.

"It's kind of interesting because it shows that it's still the same types of occupations by and large that are coming through under this new program," Wright said.

The report also revealed a 180 per cent increase in visa grants to chefs – a figure Wright says raises bigger questions about what the program is actually achieving.

"Is it really catering for occupations that are in critical shortage and emerging occupations, or is it really catering to those occupations where perhaps we're just not investing enough in skills in Australia to build up the talent pool here?" she said.

Salary thresholds: a step forward, but not for all

From 1 July 2025, the Specialist Skills income threshold – which applies to highly paid workers not subject to an occupation list – sits at $141,210 per annum, while the Core Skills income threshold (CSIT) is $76,515, both indexed annually.

Wright acknowledges the salary indexation is an improvement on the old TSS visa, where the minimum salary floor – known as the Temporary Skilled Migration Income Threshold (TSMIT) – went without an increase for more than a decade. But she notes the settings still create friction for industries like hospitality, where workers may technically fall below the threshold on base salary despite regularly earning above it through weekend rates and overtime.

"You might have somebody where the hourly rate, when you kind of annualise it all out, is going to be below that minimum salary threshold, but they're always guaranteed to do overtime because they might always work Saturdays and Sundays," she said. "That's just the nature of the industry."

The problem is especially acute in regional Australia, where employers are heavily reliant on working holiday makers to fill skill gaps and where the local labour pool is thinnest.

Processing times: the number-one complaint

For senior HR leaders, the most pressing issue is not eligibility but speed. The Department of Home Affairs' own published processing times for the Core Skills stream have blown out to around six months, well beyond the 21-day target announced when the reforms were introduced. For the Specialist Skills stream, processing is significantly faster, but that pathway applies only to a minority of applicants.

Wright says the imbalance reflects a design flaw. Under the former TSS visa, a ministerial direction governed processing arrangement, prioritising certain sectors – including health, education, and regional Australia – as well as applications from accredited sponsors. No equivalent directive currently applies to the SID visa's Core Skills stream.

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

This mirrors concerns raised by HRD earlier this year, when Wright warned that global mobility is increasingly central to workforce strategy for HR leaders, yet the framework they must use is often too rigid, slow and complex to meet business timelines.

The situation is compounded by the fact that accredited sponsor status – a designation the Department actively encouraged employers to pursue – no longer confers any processing priority under the SID program, leaving businesses questioning its value.

The occupation list problem

For trade occupations and machine operators, the hurdles compound. These roles are specifically excluded from the Specialist Skills stream regardless of earnings, meaning they must come through under the Core Skills stream and appear on the Core Skills Occupation List (CSOL).

Wright cites a concrete example: a client with a chronic need for crane operators, some of whom earn above the $141,000 specialist threshold, but who cannot be sponsored because their occupation code is explicitly carved out of that stream and does not appear on the CSOL.

"They've had to look at a labour agreement as an option," she said. "But unfortunately, the Department of Home Affairs is just taking years and years to process these labour agreements."

The Labour Agreement stream – intended as a fallback for employers whose workforce needs fall outside standard settings – is itself backing up. Industry groups, including Ai Group, have warned that restricting skilled migration access would worsen workforce shortages in critical sectors, especially construction and infrastructure, noting that electricians, carpenters, crane operators and construction managers are all officially classified as being in national shortage.

What HR leaders should do now

Wright's practical advice to senior HR leaders is to plan earlier and engage immigration specialists at the outset of recruitment, not after a candidate is found. She recommends mapping critical roles against the occupation lists to identify which stream applies and whether a labour agreement or a Designated Area Migration Agreement (DAMA) may be necessary.

For employers in health, education, and regional industries, Wright urges active engagement with the Department's accreditation program, even if the processing benefits have not yet materialised – on the basis that reform is likely to eventually restore its value.

Australian businesses already taking deliberate steps to address skills shortages are flying overseas to personally select workers and building long-term talent pipelines in source markets, an approach that requires early immigration planning to be viable.

At the policy level, Wright argues the government needs to revisit the composition of the CSOL, introduce a ministerial direction for priority processing – particularly for critical infrastructure, health, and regional roles – and ensure the accredited sponsor program is backed by meaningful operational benefits.

"The number-one complaint we get from clients is just that it's taking too long," she said. "If you can't wait the requisite time for the time it's taking to process the applications, then the pathway, however good it might be on paper, isn't working."

Vialto is a silver award partner of this year's HR Awards 2026. Here, attendees will celebrate excellence across Australia's HR profession, recognising the people and organisations driving the industry forward. For more information and to register your interest, visit HR Awards 2026.