Why Employing Overseas Workers Is Critical To UK Tech

I’m reading more and more hype about employing overseas workers to support understaffed sectors including IT, engineering, hospitality, and care. And yet, our Home Secretary Suella Braverman has promised that she will be taking a tougher approach to immigration in 2023, directly contradicting the efforts of other departments within the government.

A recent survey by CBI found that almost 75% of UK companies have suffered from labour shortages in the past year. Some due to a lack of bodies, and others due to skills shortages. When you drill down to the nitty gritty, it’s quite simple.  We do not have the number of people required for the vacancies that exist in post-Brexit UK.

In this blog, I discuss how highly skilled workers enter the UK and the key changes that must be made to our UK visa and immigration rules to suit our current labour market and economic challenges.

A barrier to UK growth

Off the back of Hunt’s Autumn Statement, Tony Danker, CBI Director-General addressed his worries around immigration in his opening speech of the CBI Annual Conference 2022. In his address, he discussed how immigration is one of the core barriers to UK growth.

“First is immigration. Our labour shortages are vast. First, we have lost hundreds of thousands of people to economic inactivity post Covid. And anyone who thinks they’ll all be back any day now – with the NHS under the pressure it is – is kidding themselves. Secondly, we don’t have enough Brits to go round for the vacancies that exist, and there’s a skills mismatch in any case.

Let’s have economic migration in areas where we aren’t going to get the people and skills at home anytime soon. In return, let’s make those visas fixed term. At the same time, let’s double down on incentives for technology and automation. And let’s agree a skills policy that works to fill these roles from the UK in the medium term.”

How do highly skilled workers enter the UK?

Pre-Brexit, employing overseas workers was relatively straightforward – at least if the individual was from the EU. Workers from EU countries had freedom of movement and could choose the UK or any other EU country as their home. Many highly skilled workers would come from EU countries to the UK, working as permanent employees or setting up UK limited companies in order to work as contractors. This would benefit the UK tech industry which has long suffered from sector-specific skill shortages in key areas such as development, cyber security and BI/data.

When employing overseas workers with nationalities outside of the EU, the employer had to be an approved Home Office Sponsor company. Securing this licence to sponsor in itself wasn’t easy, the process would take at least four months, involve a bundle of documents around two inches thick, and an interview with a Home Office servant who would do their best to find a reason not to issue a licence. Sponsors could then provide sponsorship for up to 5 years on a permanent employment basis. The visa would only be secured if the worker had a ‘high demand’ skill, included on the government’s ‘Shortage Occupation List’.

However, since Brexit, the ability of any worker, no matter their skill level or specialism, to enter the UK for work has been highly constrained by the current Home Office visa and immigration rules.

For highly skilled workers, the main route into the UK is via the ‘Skilled Workers’ visa, formerly known as ‘Tier 2’. Like before, the company must justify the visa by highlighting the worker’s high demand skills, however, now this applies to everyone. It doesn’t matter what nationality the worker is.

Why aren’t more UK companies sponsoring workers from overseas?

Shockingly, a report by Personnel Today suggests that only 3% of UK employers possess the license for sponsoring overseas workers (both EU and non-EU) to work in the UK. In numbers, that’s just 50,000 employers out of approximately 1.4 million private sector UK employers.

Despite numerous changes to the UK immigration system, since 2020, the number of UK employers with sponsorship licenses has only risen by 1.5% in two years. With burgeoning skills shortages, these numbers simply aren’t good enough. Why are UK tech employers, the vast majority of which are suffering from technical skills shortages, not taking advantage of the fact there are hundreds of thousands of highly skilled workers outside of the UK who could work for them?

The common thread is time and money. Many employers have reported concerns over the complexities of obtaining a sponsorship license and the red tape around it. Additionally, there are serious costs to take into consideration. For example, the Immigration Skills Charge is payable by employers per year per worker – this can range between £364-£1000. For UK employers already in possession of a sponsorship license, they have a renewal every four years hanging over their heads. These continual charges and hoops employers must jump through are simply make employing overseas workers unattractive, even if they are highly skilled workers.

What changes must the government make in 2023?

There was a 23% increase in work visas issued in the second quarter of 2022 compared to the first. This is seemingly good news, however, 35% of all works issued in the year ending September 2022, were to dependents of a main applicant, and a large percentage of this rise can be equated to the ‘Skilled Worker – Health and Care’ work visa.

Like Visa expert Yash Dubal, director of A Y & J Solicitors recently said: “Despite some of the anti-immigration messaging coming from sections of the government, there remains an urgent need for workers in Britain and in the short to medium term at least, the only option many businesses have is to seek personnel from overseas.”

Make hiring workers from overseas attractive

I am continually perplexed why the government keeps obstacles in place in the visa process that make hiring workers from overseas unattractive to both parties – the employers and potential employees from overseas. Overseas employees are subject to costs like the NHS surcharge which can range from £470-624 per person and is payable before an application can be submitted and for a minimum of a three-year instalment. If a highly skilled worker is considering moving to the UK through a Skilled Workers visa, they have to take into account costly charges for themselves and any dependents (spouse and children <18) they might have. Other EU countries do not have such charges in place, so they are winning the attention of these talented individuals.

In my opinion, we should be appealing to the Home Office to make vital changes to the cost of Skilled Worker visas through the removal of the Immigration Skills Charge. Employers are being put off the sponsorship process by the expensive and complex system the Home Office has in place. Large companies looking to grow their technology personnel might be able to shoulder this costly and extensive process, but smaller businesses suffering from tech-related skills shortages are being restricted from securing this overseas talent and growing as a result.

Additionally, the NHS surcharge should be scrapped entirely to make the UK an attractive place for highly skilled workers to make their home. Not only must they pay this ‘NHS surcharge’ to the NHS to submit their application, but as tax payers they are paying double towards the NHS.

Medium to long term skills strategy

The recent Autumn Statement was heavily criticised for a lack of focus around skills reform. I am pro-immigration through and through, but I also believe that education and training should be a top priority for our government when it comes to supporting the UK tech sector. Only through new initiatives and training programmes will we teach, upskill and reskill our population to close the skills gaps we suffer from in the medium to long term.

Interested in hiring workers from overseas to join your UK business, but not sure where to start?

As a business, we were trailblazers when it came to employing highly skilled workers from overseas to join our team in the UK. Since 2016, we have been an approved sponsor company, with a license to hire overseas workers using the Home Office’s ‘Skilled Workers’ visa.

This license allows us to sponsor highly skilled workers and their families, to bring their much-needed technical skills to the UK. In the beginning of our journey into hiring workers from overseas, we welcomed multiple developers from the Philippines and Vietnam into our team. Hiring overseas developers certainly had its challenges – previously, I mentioned perceived red tape around obtaining a license – unfortunately, I can confirm this was my experience too. In my interview with the Home Office, I got the distinct impression that the interviewer had a quota of applicants to deny.

However, I would still whole heatedly recommend becoming a sponsor employer. In fact, we’ve supported numerous clients in fulfilling their resource planning through hiring workers from overseas. I remember the vast majority of our clients being very dubious about the approach, however, the tides have changed since Brexit. We have seen an increase in demand for sponsoring workers from overseas, especially when it comes to hiring overseas developers. I just hope the government considers the changes myself and so many others believe should be made to increase this interest further.

When we assist clients with sponsoring workers from overseas to join their teams in the UK, we handle every aspect of the recruitment process – from candidate sourcing in native languages and travelling with clients internationally for in-person interviews, to working alongside immigration teams/HR and supplying our ‘landing’ and aftercare packages.

If you’re interested in hiring workers from overseas, but need some guidance on the processes involved, please get in touch.