Skilled migrants with experience managing small businesses abroad struggle to bring those talents into Australia because of “arbitrary” skills assessment criteria, immigration experts say.
Those bottlenecks may be depriving the workforce of productive entrepreneurs, while complicating a migration system some advocates claim is geared against small businesses.
SmartCompany has detailed how prospective migrants are obtaining skills assessments in the ‘wrong’ occupations, owing to complex rules and differing eligibility criteria across 39 assessing authorities.
Those skilled migrants are not just tradespeople or technical staff, but white-collar workers, chief executives, and managing directors, responsible for overseeing complex business operations.
However, according to one lawyer, the criteria set for those individuals is far from straightforward.
Jackson Taylor, managing partner at Roam Migration Law, told SmartCompany that a “lot of white collar managing directors do not have viable options to obtain a skills assessment” due to what he calls “arbitrary” criteria set by assessing authorities.
Each occupation on Australia’s skilled occupation list correlates to a code within the Australian and New Zealand Standard Classification of Occupations (ANZSCO).
According to Taylor, the ANZSCO system only has one specific ‘Managing Director’ classification, often used by businesses with under $10 million in annual turnover.
“But the skills assessing body is really only focused on roles which are in the corporate sector. As such, people who require a skills assessment but are in an organisation with less than 50 people are unlikely to qualify,” he said.
Skills assessments for the Managing Director classification are overseen by the Institute of Managers and Leaders (IML).
According to the eligibility criteria published by IML, “it is unlikely that employment within an organisation with a total staff of less than 50 employees would support employment experience at the required level,” leaving some individuals who require a skill assessment in the lurch.
In a statement provided to SmartCompany, IML CEO Sam Bell said, “For those coming from a smaller workforce background, we often find their managerial responsibilities are absorbed by daily operational activities which can limit their strategic decision-making capacity”.
According to Bell, having a successful Australian business requires people with strong management and leadership skills.
“The basic expectations for a Managing Director are to have experienced management and leadership at the highest levels, with exposure to strategic and operational responsibilities to enable them to contribute to the Australian professional workforce as expected,” he added.
Bell noted that nothing prevents highly skilled Managing Directors from taking roles with smaller organisations in Australia once approved.
“To ensure high-quality applicants are applying for the Managing Director occupation, a set of high standards is necessary and we need to set the bar somewhere. We believe these requirements ensure high-quality skilled migrants are coming into Australia,” he said.
When asked if individuals with experience managing smaller businesses are positively assessed by IML, Bell said, “We can’t provide specific information on assessments but it’s worth noting that most applicants applying for the Managing Director occupation are approved”.
“This shows Australia is attracting quality Managing Director applicants with quality skills and experience and the potential to enrich the national workforce.”
Trent Wiltshire is the deputy program director at the Grattan Institute, one of Australia’s leading independent think tanks focused on public policy.
According to Wiltshire, the skilled occupation lists and the assessment process are “not a great indicator of capability”, especially when it comes to such white-collar jobs.
“Someone could be working as an engineer but also have experience as a manager,” he said.
Wiltshire advocated moving away from the current skills assessment process and adopting a broader approach to assessing individual skills.
Aman Sethi, the founder and managing director of Job Search, Immigration and International Education Consulting Services, says the ‘Managing Director’ occupation is listed on the Medium and Long-term Strategic Skills List (MLTSSL), indicating that it is in high demand within the Australian labour market.
However, due to the criteria set by the assessing authorities, individuals have to look for alternative occupations, or “they can focus on business growth and apply when they are meeting the eligibility requirements”.
In other cases, they might have to explore other visa options such as business visas, Sethi said.
Taylor argued the system could still exclude migrants, with significant management skills, for whom ‘Managing Director’ is not a perfect match.
“ANZSCO has no alternative ‘Managing Director’ classification for a large number of roles, though there are specific manager/owner occupations for some sectors such as ‘Caravan Park Manager’ or ‘Transport Company Manager’”, he said.
“This means a lot of white collar Managing Directors do not have viable options to obtain a Skills Assessment. This may be required for people seeking permanent residency who will turn 45 prior to completing sufficient full-time work in Australia.”
According to the draft Core Skills Occupation List published by Jobs and Skills Australia, Chief Executives or Managing Directors remain in shortage in the country and are proposed to remain on the official list.
Those executives are responsible for determining, formulating, and reviewing the general policy programs that are central to a business’ success.
From authorising the resources of a business to implementing organisational policies and programs, their decisions have a material effect on a business’ financials and staff.
If a local business cannot develop or recruit that talent locally, or entice the right leader from abroad, they could underperform or wind down, with the Australian economy taking a hit in the process.
Taylor said the criteria set by assessing authorities is not always consistent with reality.
While Bell acknowledged it could be possible to define alternative pathways for Managing Directors working in smaller companies, he said “the existing pathways are offered based on the needs of the Australian workforce based on input from many stakeholders”.
“For those who act as a Managing Director in a smaller company, there are other occupations to apply for if they have some hands-on experience in these areas in a smaller company, such as Corporate General Manager or Sales and Marketing Manager,” Bell said.
“It’s up to each applicant to choose which way to go considering their skills and experience.”
According to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), 97.2% of all Australian businesses were small businesses in June 2024, followed by medium-sized businesses, which accounted for 2.6% of all businesses.
The problem with the overall migration strategy “stems ultimately from a lack of training of Australians and a lack of investment in vocational education over decades,” said Taylor.
“Rather than looking at competitive international sectors such as Germany and the Scandinavian countries for models of vocational education/apprenticeships, we have limped along with an underfunded and anemic system.”
Bell said it is pertinent that the country attracts the best talent from around the world to be successful, and high-quality managers and leaders are vital for all businesses whether big or small.
“The Skilled Migration Program is a dynamic system and is continuously updated to meet Australia’s workforce requirements. As an assessing authority, we try to make the process as smooth as possible to assist potential applicants to migrate and settle in Australia as their new home,” he added.
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Production Editor
Prior to joining SmartCompany, Mrinaal was the content head at Lawctopus. She has a dual degree in business and law, with a Masters in constitutional law. You can follow her on Twitter at @mrinaaldatt.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
