Employers braced for ‘perfect storm’ as UK reaches non-EU migration cap for second consecutive month

2 Feb 2018 By Emily Burt

Visas will only go to those earning more than £50,000, expert predicts, as drop in number of EU migrants impacts demand

Employers must plan ahead to avoid a scramble for skilled migrant workers, experts have warned, after it emerged that the UK had reached its cap on Tier 2 visas for non-EU migrants for a second consecutive month.

Under the British points-based immigration system, employers are granted a sponsorship licence by UK Visa and Immigration to employ non-EU workers. Visas are then made available by the Home Office on a month-by-month basis, and granted according to a series of points – measuring professional qualifications and existing skills shortages.

The annual quota of 20,700 Tier 2 visas was in previous years split evenly across the course of the year but, after a 2016 change in the law, a new system implemented in 2017 meant the number of visas was front-loaded at the beginning of each financial year, to allow for high demand in the summer months.

Consequently, the number of available visas of this type dropped from 2,200 in April 2017 to 1,500 in December. This drove up the minimum salaries needed to qualify for a visa from an average of £30,000 to £55,000. It also left industries such as the NHS in a skills crisis, with recruiters reporting that they had been forced to turn available doctors away because they lacked visas.

Managing director of Migrate UK Jonathan Beech told People Management: “This is a short-term situation, but one that will get worse before it gets better. The cap on available visas turns overseas recruitment into a fight to see who can get the most points to get their certificate through.

“This coming month, I would anticipate visas only going to people who earn more than £50,000 – which has never been seen before. 

“It’s hitting the industries that need these people the most – doctors have widely spoken out against it, as the NHS needs the workers but many don’t qualify for the relevant shortages and qualifications.” 

Demand for skilled non-EU migrants is anticipated to increase further in coming months, as data showed net immigration from within the EU continued to plummet following the 2016 referendum on leaving the EU. 

The Office for National Statistics saw overall net immigration drop by almost a third to 230,000 between January and June 2017, while figures published in December revealed that a net figure of just 9,000 EU migrants arrived in the second quarter of 2017. 

“It’s the first time we’ve seen the cap reached in two consecutive months, and it’s impacting on all sectors,” Natasha Chell, partner and head of risk and compliance at Laura Devine Solicitors, told People Management

“The reduction in EU workers has increased the need for non-EU workers, so there is a pressure mounting, and valuable roles across sectors are unfortunately not getting their workers.

“In addition, a salary minimum of at least £50,000 will have a knock-on effect for the start dates for a lot of new hires, which is having a wider impact on businesses, and current migrant workers employed in the UK who hope to transfer to a Tier 2 are having to return home to transfer, and finding themselves unable to come back into the country because there are no visas available.” 

Jessica Pattinson, head of immigration at Dentons UK and Europe, said the UK labour market was experiencing a ‘perfect storm’ of conflicting immigration problems, exacerbated by uncertainty over Brexit. 

“Statistics show fewer people are coming to the UK from Europe, which, combined with the front-loading of visas and taking on so many Tier 2 migrants at the beginning of the year, leaves many companies stretched for talent in the months leading to April,” she said. 

“Unfortunately there’s no guarantee things will return to normal after April, because as we get closer to Brexit people will be waiting to make their mind up about whether the UK is the place they want to work.”

The European Commission (EC) yesterday published a strategy paper designed to ‘level the playing field’ between the UK and EU27 post-Brexit, which included sanctions to prevent Britain undercutting the EU economy.

The EC stressed any free trade agreement must include particular focus on acceptable minimum employment standards and non-discrimination in working conditions – a stipulation likely to aggravate Brexiters looking to reduce EU regulation after the UK leaves. 

Employers hoping to tackle talent drains in the longer term as uncertainty over the future of EU immigration persists must apply for Tier 2 sponsor licences sooner rather than later, Beech said. 

“Lots of organisations are applying for sponsor licences as the demand for non-EU workers rises, so the call to action is to make sure employers think carefully about getting a licence sooner rather than later, and apply before everyone else gets on the bandwagon,” he said. 

“Organisations with sponsorship licences will be more likely to get the key personnel they need at short notice, instead of waiting three months to get a licence and losing the talent they desperately need.” 

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