Already 1.3 million non-UK workers have left the country since late 2019. The post-Brexit, post-COVID-19 landscape is all about recovery. Unfortunately the ongoing labor shortage is proving to be a strong damper on these efforts.
The Confederation of British Industry (CBI) recently spoke out about staff shortages and why a relaxation on immigration policies may be beneficial. Many firms struggle with recruitment in many areas of the economy.
Why the Hire Local initiative isn’t working
In two words: training time.
There are jobs. There are people willing to take up those jobs. The problem is that it takes time to get them certified to work those jobs, and while they are doing training the things that need to be done are left to stagnate.
One example is the shortage of drivers in the transport sector, which happens to influence everything up and down the economy and food supply chains. Commercial vehicles need Heavy Goods Vehicle (HGV) training. The ability to drive a large vehicle is valuable, but while practical training may take as short as five days – the whole process to get a license may take from 6-8 weeks.
Everyone that starts training now would only be ready to work up to two months later, which does not solve the short-term needs of many businesses. Wages have increased to attract new hires (+5.7% for drivers, according to data on posted job openings on online jobs websites) but the transport squeeze has also increased the prices of basic goods, and the cost of living has increased by 3.2% according to the Office for National Statistics.
In a Bloomberg article, it has been pointed out that
“there are signs the latest developments don’t mark the start of a new trend in rampant wage growth. Big increases are confined to very limited number of roles, and many of the incentives are sign-on bonuses that won’t apply to existing staff.
“On balance, we’re unlikely to see persistent increases, certainly on the scale we’ve seen,” said Reamonn Lydon, an economist at Ireland’s central bank who works with Indeed on labor data. “Some of those increases in the first half of the year are around 7%. It would be very, very hard for the sectors to sustain this.”
The lack of qualified workers isn’t just hitting the transport industry, but the one being hammered the most is healthcare and education. NHS has reported in 2019 that they are short about 100,000 Full Time Equivalent(FTE) doctors, with professionals leaving and retiring every year. The NHS Long Term Plan does attempt to mitigate these issues, but the same problem remains – it is a solution that will take years to bear fruit.
Age profiles for job seekers also matter specially for certain jobs in the Food and Drink sector, which further limits the pool of not only qualified but physically capable applicants.
So far the government has been recalcitrant about adjusting visa policies to address labor shortfalls.
Even retraining will not address the knock-on effects of a drastically limited pool of labor.
Immigration and Retention of Qualified Workers
There are five tiers to the UK Visa under the post-Brexit Points-Based system.
- Tier 1 – Investor and exceptional talent visa
- Tier 2 – Skilled workers with a job offer
- Tier 3 – Low skilled workers for labour shortages (suspended)
- Tier 4 – Students
- Tier 5 – Youth mobility and temporary workers
It is of course possible for qualified workers to still immigrate and maintain residency in the UK. The new points-based system for immigration however makes it more difficult for workers to gain entry. A potential employee must have 70 points to be allowed entry.
It is now a requirement to first have a job offer from a licensed sponsor.
This gives 20 points.
The job being at the appropriate skill level adds another 20 points.
Speaking English at an acceptable standard gives 10 points.
These are the 50 points that a qualified worker will get if they fulfill the mandatory criteria. The remaining 20 points will have to be obtained through other measures.
If the salary to be paid is over £25,600 per year, that is 20 points.
If the job offer is in a shortage occupation, that could be the 20 points.
If the prospective employee has a PhD related to their job, then perhaps that.
An employee considering moving to the UK must be paid a minimum of £20,480 in order to qualify to earn additional points (in itself this minimum is worth 0 points). This is the same whether they are EU nationals or from other countries.
Thus, it is nearly impossible for overseas workers to come into the UK without a job offer already lined up – and education and salary points can only be waived if the job is in a shortage list. Fortunately, there is no overall cap on the numbers that can apply for this Skilled Worker Visa route for entry.
The sponsorship system is obligatory and can get expensive. There is no dedicated route for self-employed people, which potentially locks out new start-ups and small business owners from accessing global talent.
There are other routes than this however, and immigration solicitors are hard at work trying to help employers and potential employees to the finish line.
Many employers often recruited staff from the EU and never before sponsored anyone for a work visa. They need to apply to the Home Office for a sponsor license, with duties and systems that benefit from professional advice. Immigration law is too complicated to deal with on your own as a company.
The Resident Labor Market has been abolished. This means that no longer must an employer first consider applicants of British and EEA nationality before it could be offered to a non-EEA national even if they might be the best candidate. Now you have to consider each individual regardless of their immigration status, and not wanting the inconvenience of applying for a Skilled Worker Visa is not enough justification to avoid indirect racial discrimination.
Other Routes to Entry
Most people coming to the UK will need a Skilled Worker Visa. Workers may still be transferred from an overseas branch to the UK under the Tier 2 Intra-company Transfer Visa. They only need 50 points.
Health and Care workers are fast-tracked as Skilled Workers.
While Tier 3 Low Skilled Shortage Worker has been suspended, occupations under the shortage list make it easier to sponsor and recruit internationally under Tier 2 requirements.
It is possible to switch to a Tier 2 Skilled Worker Visa without leaving the UK, for example recent international graduates in UK schools. This is a major change, since previously a graduate under a Tier 4 will be forced to leave the country and then apply for a Tier 2 Visa.
Employers can hire interns to work in the UK under Tier 5 for up to 1 year each and they do not need a sponsorship license. The intern must be studying for a degree equivalent to a UK bachelor’s degree and must be in addition to an employer’s normal staffing needs.
Seasonal workers are the most in-demand from employers in the food and transport sector, and need a certificate of sponsorship and proof of sufficient funding to support themselves. This is a Tier 5 Visa that is limited to 6 months.
Non-sponsored workers will be allowed starting 2022, but there will be a cap.
The Frontier Work Permit Visa has been created for those who want to work and rent in the UK but live in another country. This allows such workers to work but should live outside the UK for more than 180 days in any 12 month period. This is ideal for workers in construction, education, sales, and other occupations that have a predictable schedule or need plenty of travel.
Tier 5 Temporary Workers under Creative and Sporting in the UK must have no more than 14 days between paid engagements. However, only their time spent in the UK will be counted – if their occupations need them to perform abroad those are no longer counted down for their leave to remain.
The Youth Mobility Scheme Visa is available mainly to residents from the Commonwealth and selected individuals from the Youth Mobility Scheme Ballot from Hong Kong, Japan, South Korea, and Taiwan. They are allowed to live and work in the UK for up to 2 years.
There are people who do not need a formal permission to work in the UK. Family members of British citizens, Commonwealth citizens, and EU citizens who applied to the EU Settlement Scheme are entitled to long-term stay. Family members with a derivative right of residence allow primary carers to remain with the child who is a self-sufficient EEA national.
However, immigration law is complicated especially when it intersects with family law. The threat of being asked to leave or denied entry is ever present, and consulting with an experienced immigration solicitor is desirable at any moment there is doubt.