The United Kingdom must attract a skilled workforce, but recent regulations regarding visa costs discourage potential candidates.
Shake Up the landscape
According to Mandie Sewa, who serves as the Head of Immigration at Brevis Law, the recently implemented student visa regulations have the potential to disrupt the environment for employers in search of global talent. These rules could affect the pool of international students as prospective employees and their ease of access to employers.
Starting in January 2024, the regulations will render it infeasible for international students to bring their dependents, except in cases where they are enrolled in postgraduate programs with a research emphasis, such as research-oriented PhDs and research-based master’s programs.Mandie Sewa
Subject to final confirmation and the enactment of the required legislation, we are planning to raise the standard rate to £1,035. Additionally, we intend to increase the reduced rate, which applies to students, their dependents, individuals on Youth Mobility Schemes, and those under 18, to £776. Work visas and visit visas will see a 15% cost hike, whereas certificates of sponsorship, study visas, leave-to-remain visas, citizenship, settlement, wider entry clearance, and priority visas will experience an increase of at least 20%.
Strain on Employees
Karendeep Kaur, the Legal Director at Migrate UK, anticipates that the heightened visa fees will pose a challenge for employers. Nevertheless, if employers are prepared to absorb these application expenses, they are less likely to miss out on attracting international talent, particularly in the face of competitors who are ready and capable of covering these fees. She also acknowledges that smaller organizations are more likely to bear the brunt of these changes.
It’s important to highlight that individuals arriving in the UK for roles classified as shortage occupations will enjoy reduced UKVI fees and may receive lower salaries. However, it’s essential to note that this does not impact the fees for the Immigration Health Surcharge. Therefore, careful advance planning is crucial.
As a result of these fee hikes, international candidates are likely to be motivated to explore employment opportunities in locations other than the UK. Hence, this is a matter for the UK government to contemplate, possibly by considering the imposition of higher fees in sectors with no labor shortages or for positions that typically come with higher salaries.Karendeep Kaur
Juliana Lobo, a Brazilian citizen residing in the UK with her husband and two children on a work visa, points out that the heightened fees will have repercussions for British universities, which heavily depend on international students, and for British companies seeking to hire individuals with specialized skills that are scarce within the UK.
According to a recent study, international students commencing their studies in the 2020/21 academic year were projected to contribute up to £41.9 billion to the UK economy. In contrast, the expenses incurred by the UK to accommodate these students and any accompanying dependents were estimated at £4.4 billion, indicating a net gain of £37.4 billion for the UK economy.Karendeep Kaur
Less Talent, More Costs
Skill shortages pose a challenging issue. There is no universally agreed-upon definition of a labour or skills shortage, and there is no one perfect policy response. Sewa further notes that the new visa regulations may deter many international students from selecting the UK as their study destination. Consequently, employers could encounter difficulties in both recruiting and retaining international talent.
The government has affirmed that the existing Skilled Worker route will continue to be available for foreign migrants who wish to come and work in the UK. Nevertheless, as many employers recognize, the assimilation of migrants into the UK can be a challenge, particularly for those who have not previously visited or resided in the country.
The benefit of hiring someone who has pursued their education in the UK is that they are likely to have already acclimated to the way of life, work practices, and various cultural norms and values.Mandie Sewa
The updated regulations might result in a reduction in the available pool of skilled candidates for specific roles and industries, potentially impacting the overall competitiveness of certain businesses. Moreover, employers may need to modify their recruitment tactics and explore alternative ways to attract international talent, potentially raising costs for businesses already operating on thin margins, as Sewa pointed out.
The Method Behind the Madness
The government asserts that the substantial fee hikes will only affect foreign individuals. However, in reality, apart from work visas, these increases will predominantly affect British families. Even for non-British families, these reforms will hurt UK businesses, potentially placing them in the difficult position of deciding between letting go of an employee or providing financial assistance for their visa expenses.
Raising the Immigration Health Surcharge and visa application fees is a just and equitable step, as it enables us to support essential public services and contribute to funding public sector salaries.Home Office Spokesperson
This adjustment will free up additional resources for allocation within the Home Office, including funding crucial services and facilitating increases in public sector salaries. However, what implications does it hold for talent?
British businesses ought to emphasize the importance of nurturing and investing in their workforce. Recruitment, skill enhancement, and empowerment form the cornerstone of executing strategic objectives and provide organizations with the optimal opportunity to flourish in an unpredictable future.
At Sanger, our team comprises individuals from more than 70 countries, contributing to our groundbreaking scientific endeavors. Our work has played a pivotal role in establishing the UK as a global genomics leader. However, the expenses for a family of four to relocate to the UK amount to approximately £10,000 in visa fees, and now, those seeking to bring their skills to the UK are required to pay an additional £1,035 per person annually for the NHS, on top of their existing contributions through income tax. Consequently, we are facing escalating challenges in recruitment, and any loss of talent will not only affect our scientific advancements but will also have repercussions on the UK economy.Dr Sarion Bowers – Head of Policy at the Wellcome Sanger Institute
The rise in visa fees could have adverse consequences for the UK economy. Elevated visa costs are expected to deter international students, professionals, and enterprises from selecting the UK as their preferred destination, as indicated by Sewa.
This could result in a decline in the number of international students enrolling in UK universities, a decrease in foreign workers addressing skill gaps, and a reduction in foreign investment and business expansion in the country.
These factors can exert an adverse influence on diverse sectors of the economy, including education, healthcare, technology, and finance, which depend on international talent and investment. Furthermore, a decline in international students and workers could result in reduced income for universities, businesses, and the government, thereby affecting the prospects for future economic growth and development.Mandie Sewa
According to Kaur, there has been a surge in sponsor license applications, with statistics revealing that over 6,000 sponsor licenses were granted in the most recent 3-month reporting period. This is a robust indication that the UK continues to heavily depend on foreign labour.
The forthcoming reporting period following the fee hikes will be the litmus test to ascertain whether these increases are having negative consequences. In the absence of international talent addressing the skills gap in the UK, employers in specific sectors may face the dire prospect of shutting down their businesses, which would carry substantial ramifications for the entire UK economy.Mandie Sewa
Managing the Fallout
The UK can implement various steps to reduce obstacles to foreign talent and draw international individuals to work and study in the country. Sewa lists some prospective actions:
- Streamlining Visa Processes: Presenting appealing visa choices, including the broadening of visa categories tailored to the requirements of international talent. This may involve establishing dedicated visas for skilled professionals, entrepreneurs, and recent graduates, to attract individuals possessing the desired expertise and qualifications. Additionally, augmenting the number of accredited organizations and offering transparent, well-defined eligibility criteria for existing visas, such as the Innovator Founder visa, would further support this effort.
- Providing Incentives for Employers: Providing incentives to employers who engage foreign talent, such as tax incentives and grants, to stimulate their active pursuit of international candidates and investment in recruitment and integration efforts. Strengthening support services through the provision of extensive integration support for foreign talent, including language training and cultural integration programs aimed at improving intercultural communication, awareness, and understanding. This approach aims to facilitate the transition and enhance the appeal of the UK as a destination, all while improving business operations.
- Promoting Diversity and Inclusion: Highlighting the importance of diversity and inclusion in the workplace to establish a hospitable atmosphere for foreign talent. Encouraging employers to embrace inclusive hiring methods and nurture an environment of acceptance would enhance the attractiveness of the UK to international individuals. Studies have demonstrated numerous advantages of a diverse and inclusive work environment, including heightened revenue growth, enhanced innovation capabilities, improved capacity to attract a diverse pool of talents and a 5.4 times higher rate of employee retention.