‘Thousands’ of businesses unable to recruit overseas as visa limit is breached for sixth consecutive month

19 Apr 2018 By Miriam Kenner

Restrictions on employing non-EU nationals continue, with companies facing £50,000 salary cap

UK employers are being heavily impacted in their attempts to recruit foreign workers, as new government data on Tier 2 visa allocations in March revealed that sponsorship certificates hit their limit for the sixth month in a row. 

The government UK Visas and Immigration department recently published its March report listing monthly allocations of restricted ‘certificates of sponsorship’ under the permanent limit on migration through Tier 2, which covers non-EU workers.

For the sixth month running, the limit was breached, with reports suggesting that the government had turned down ‘thousands’ of applications from businesses. The number of restricted certificates of sponsorship that went unused from the 2017-18 annual limit was only 67, following the introduction in December 2017 of a salary cap of £50,000 for most roles covered by Tier 2. 

“The impact of the Tier 2 cap is now starting to bite and is definitely having an impact on some industry sectors,” Tony Haque, lawyer at Baker McKenzie, told People Management

“The growing pressure on the monthly quota has led to it being exceeded for the last six months in a row,” Haque said. This was having “a significant impact on UK employers and their ability to recruit newly hired talent from overseas”, he added.

Tier 2 applicants range from general skilled workers and graduates to intra-company transferees. It is thought to be the most widely used category in the visa system.

Restricted certificates of sponsorship are needed to employ non-EU or EEA nationals on Tier 2 visas who are resident outside the UK, or who need to apply for a Tier 2 visa from outside the UK. 

As the Tier 2 visa is now the main UK immigration route for skilled workers coming to the UK to take up employment, these figures are now creating a recruitment crisis in some sectors, with employers already under pressure from lower migration from Europe ahead of the UK’s exit from the European Union.

According to a March Migration Advisory Committee interim report, “employers in all sectors are concerned about the prospects of future restrictions on EEA migration”. Organisations expressed fears that tighter migration rules would harm UK business, highlighting the need to ease restrictions around accessing EU workers.

Haque said the current Tier 2 system was “designed to give preference to local workers if they are able to do the job and to limit the number of migrants entering the UK to take up such roles.

“However, it has taken some time for these provisions to truly bite because of the fact that when the cap was first introduced in 2011 – when we were recovering from a recession – the demand for such visas wasn't as high.

“With record levels of unemployment and the negative impact of Brexit on recruitment, many employers have now been forced to look further afield to meet their staffing needs.”

UK organisations rely on Tier 2 visas for employing foreign staff. Any UK-based organisation seeking to employ a non-EU overseas applicant in the UK on a Tier 2 visa must have a valid Tier 2 sponsorship licence. 

Nationals of countries outside the European Economic Area (which covers the EU and Switzerland) normally need to apply for a Tier 2 visa if applying from overseas.

To apply for the visa, both a job offer and a certificate of sponsorship from a UK employer with a valid Tier 2 sponsorship licence are required. 

The issue is that the minimum salary needed to obtain the required number of points to qualify for a visa is usually £30,000 a year. But when the cap is exceeded, the required points and salary are raised proportionately to limit the number of successful applicants. The minimum this month is likely to be £50,000, said Haque.

“This is creating a headache for many employers that have acted in accordance with the current rules and gone through all of the hoops to obtain a visa, such as advertising the position for a four-week period, only to find that they fail at the last hurdle because the bar has been raised higher,” he said.

“The lack of certainty is causing a crisis in certain sectors, such as science and health,  especially for those that rely on less well-paid skilled workers.”

The fall in EU nationals coming to Britain since the EU referendum in June 2016 is worsening the situation.

Philip Campbell, policy lead at the Recruitment & Employment Confederation, said: “More pressure on the Tier 2 visa scheme is the inevitable consequence of making the UK a less attractive place to work for candidates from the EU.

“If the government wants to avoid hampering business growth and damaging the economy, it needs to ensure employers can access the people they need via a swift, flexible, low-cost immigration system – both now and post-Brexit.” 

When the Immigration Act 2016 came into force, it substantially amended the rules for recruiting non-EEA nationals under the Tier 2 category of the points-based system. 

Experts predicted that this would significantly affect UK businesses because of their reliance on overseas workers.

This January, immigration rule changes also facilitated those wishing to switch from UK Tier 4 visas to Tier 2 visas, affecting companies’ graduate recruitment. Students were previously required to show that they had successfully completed their degree course before being allowed to switch visa tiers.

“Unfortunately, that meant most students were unable to switch until they had received their formal results or degree certificate. The rule change in January now allows students to switch prior to receiving their results, which should make the process for employers looking to hire such individuals easier,” said Haque.

The 2016 Act also introduced a ‘skills charge’ or levy for each certificate of sponsorship, with a reduced rate for organisations with fewer than 250 employees. The revenue raised was used to fund apprenticeship schemes, to encourage employers to invest in training young UK workers. It did not apply to graduate trainees or students switching to Tier 2 visas.

Acknowledging the skills shortage, the government allowed in the Act for interim relief for recruiting healthcare and education professionals, though fees are to be introduced in these sectors from July 2019.

The UK Visas and Immigration department did not reply to a request for comment. 

Head of Workforce OD

Head of Workforce OD

Birmingham, West Midlands

Salary scale £63,751 to £73,664 pa

University Hospitals Birmingham NHS Trust

People and Transformation Director

People and Transformation Director

DECA Sealand, North Wales or DECA Stafford, West Midlands

£64,520 - £75,293

Defence, Electronics & Components Agency

Associate Director of People Experience

Associate Director of People Experience

Leeds, West Yorkshire

£63,751 - £73,664 Per Annum - AFC Band 8c

Leeds & York Partnership NHS Trust

View More Jobs

Explore related articles