English language deficiencies mean a large
number of foreign accountants being granted permanent residence
status in Australia are not finding work as accountants, despite a
nation-wide skills shortage, new research has found.

The study by Monash University Centre of
Population & Urban Research director Bob Birrell and research
manager Ernest Healy noted more accountants are gaining permanent
residency under skilled migrant status in Australia than any other
profession.

Most are former overseas students trained in
Australian universities. However, few are obtaining employment as
professional accountants, mainly because they lack the required
English skills.

In 2007-2008, there were 52,417 applicants
granted visas under permanent entry as skilled migrants. Of these,
9,107 were accountants. In 2006-2007 the parallel figures were
49,273 and 10,688 respectively.

The main source of these accountants were
former overseas students who completed their training in Australia.
In 2007-2008, 67 percent came from this source. In 2006-2007, it
was 78 percent.

The number of accountants sponsored by
employers was tiny by comparison. There were only 116 of these in
2007-2008 and 68 in 2006-2007. The fact that employer nominations
was so low indicates a global shortage of accountants with the
expertise and communication skills Australian employers are looking
for, or prepared to pay the market price for, the researchers
said.

This raises “serious questions” about why
Australian employers can’t find suitable accountants when there is
a huge influx of migrants who have gained permanent residence based
on their accounting qualification, they noted.

A flood of accountants

The researchers were unable to obtain
exact numbers of domestic students completing accounting
qualifications at Australian universities. But they estimate the
number of domestic graduates in 2006-2007 was about 7,000. With the
10,688 qualified accountants granted permanent entry visas, this
meant at least 17,000 new accountants.

As of November 2007, the total number of
employed accountants in Australia was estimated at 158,400. The net
growth in employment in the five preceding years averaged about
3,500 per year.

This meant an influx of 17,000 accountants
should have “slaked the market’s thirst”. The researchers said it
did not, which indicated the shortage for employers was due to the
standards of the job applicants.

One employer from a professional services
firm, interviewed by the researchers, said that of 8,000 recent
applications, 50 percent were dismissed straight away. Only 12-13
percent of all applicants received a job offer. The employer said
just 1 percent of the former international students who applied to
his firm received an offer.

Responses were consistent in other interviews.
For example, the manager of recruitment at KPMG said that in 2007,
the firm sought to employ 570 entry-level accountants. It received
950 applications from international students, but only 10 were
appointed.

Census statistics add up

The researchers use statistics from
the 2006 Australian census to compound the difference in employment
levels between qualified accountants who are Australian born,
compared to migrants.

According to the 2006 census, there were
10,407 overseas-born, degree qualified accountants aged between 20
and 29 who had arrived in Australia between 2001 and 2006.

Only 33 percent were employed as professionals
or managers. By contrast, 85 percent of the Australia-born degree
qualified accountants in the 20 to 29 age group were employed as
professionals or managers.

The researchers said employers’ negative views
about the capabilities of former overseas students are due to
insufficient English language skills. They noted that the English
language skills required to be accepted into university and pass
permanent residency tests in Australia are much lower than those
required by professional services firms.

They concluded that the obvious answer to
meeting the profession’s skills shortage is to increase the number
of accounting places for domestic students in Australia.

They also stressed the need for better English
language standards for overseas students and called for the
accountancy accreditation bodies to require a minimum level of
English when they assess individuals’ credentials before they apply
for permanent residency visas. These bodies are empowered to make
judgements about whether these credentials are adequate for
professional practice in Australia and although CPA Australia has
indicated it favours such a move, so far there has been no
action.