Recent changes to the 457 Visa scheme is creating market confusion and contributing to a worsening skills crisis, according to contract management agency, Entity Solutions.

Contract professionals on existing 457 Visas and those seeking entry into Australia are being warned to tread with caution when signing Labour Agreements with on-hire agencies.

Entity Solutions, which manages the engagement of 2,500 contract professionals claims that in the short-term rush to be first to market, individuals on 457 Visas may be left high and dry by agencies unable to continue to meet the new strict requirements.

A number of changes have been introduced to the scheme in recent months including new English language requirements, and stricter controls around past work experience. New applicants must have English language skills equivalent to an average band score of 4.5 in an International English Language Testing System (IELTS) test.

The changes follow the federal government's joint standing committee on migration inquiry into temporary business visas earlier this year where the Information Technology Contract and Recruitment Association (ITCRA) called for tougher penalties against businesses that exploit the temporary 457 Visa program.

At the same time major changes to the General Skilled Migration (GSM) program were introduced on September 1, 2007.

Keen to clarify all of these changes, Entity Solutions has written to both the Department of Immigration and to the Minister, Kevin Andrews.

Head of Entity Migration, Lindy Northover, said she has been working hard to allay concerns from enterprises that the changes will cause disruptions and bottlenecks to critical business projects.

"The financial obligations on every company subject to these changes are significant and not correctly managed, it could mean companies that rush in now let everybody down in 24 months time," she said.

" We are taking our time to thoroughly review and research all the implications of these changes before we progress and we urge business and individuals alike to be wary of rushing into new agreements.

"The on-hire market is a highly competitive environment and there may be the temptation for some organisations to not fully disclose their status under the new rules and regulations."

Prior to the rules being tightened, a record number of 457 visas had been issued to IT professionals.

In the nine months to March 31, 2007, 4290 visas were granted to IT firms.

Immigration Minister, Kevin Andrews, said this number is more than the entire previous financial year.

During the previous 12 months a total of 4190 visas were issued.