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4 April 2024

The Recruitment Squeeze Ahead


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Written by:

Victoria Winckler
Director
The Bevan Foundation

 

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Faced with difficulties recruiting workers from Wales, many employers have turned to recruiting workers from overseas. Employing someone from outside the UK means jumping through a number of hoops, but in some sectors in particular, sponsoring an applicant to take up a job here has become a relatively common way of filling vacancies.

It’s not clear how many visas have been issued to people wanting to work in Wales, but for the UK as a whole more and more employers have taken the step of sponsoring a job for a non-UK worker. In 2023, the number of skilled work visas increased by 26% compared with 2022, and was almost two and half times more than in 2019. Using a different measure – that of country of birth of employees – the 2021 Census of Population showed that around one in twelve people in employment in Wales were born outside the UK.

All this is changing. Legislation passed by the UK Government – without a vote by MPs being required – is set to make recruiting workers from outside the UK very much more difficult.

From 11th April, the minimum salary of most jobs being sponsored for a skilled worker visa will soar. After this date, a sponsored job must pay £38,700 a year or more compared with the current minimum salary of £26,200. In a Welsh context, only around a third of workers earn above the new threshold, in effect preventing employers recruiting from outside the UK for the majority of jobs in Wales.

The minimum salary is lower for some jobs that are classed as ‘shortage occupations’, such as health and social care workers, engineers, and construction workers. To date, a shortage job sponsored for a visa must pay 80% of the ‘going rate’ – a figure which is often relatively low, for example £14,880 (£7.63 per hour) for a senior care worker. From 4th April, the shortage occupation list will be replaced by a new Interim Immigration Salary list, which is expected to list fewer jobs and set higher salaries.

There’s also a clamp down on partners and children accompanying people coming from outside the UK to work. Since 11th March, social care workers have not been allowed to bring dependants on their visa, while the income that other workers need to have to support their dependants will increase to £29,000 on 11th  April 2024, then to around £34,500 later in 2024 before rising to around £38,700 in 2025.

While the changes are not retrospective and apply only to new visa applications, people already working in Wales with a skilled worker visa (or its predecessor visas) will gradually be brought into the scope of the new regulations. This is because any change in employment, for example if someone changes their job (whether with the same employer or a new one) or has a new contract because their terms and conditions change, requires a new visa application. Similarly, most visas last five years and so someone wishing to continue to work needs to apply for a renewal. At this point, if an international worker’s salary does not meet the new, higher, threshold they, and their dependents, will have to leave the UK.

Within five years, the sectors that have relied on people from outside the UK, from social care to hospitality, from construction to engineering, will not only be unable to sponsor new employees to fill vacancies but could also see their existing workforce with skilled worker visas gradually shrink as they no longer meet the requirements for visa renewal.

The changes are an enormous challenge. For sure, the restrictions may push some sectors to automate or streamline some functions to reduce the need to recruit. They may also result in increased salaries in sponsored jobs, especially for those jobs which are just below the new salary thresholds. They might even encourage some employers to invest in training or to create pathways into work for Welsh people who face barriers to employment, although given the lead time to train engineers, IT specialists and accountants this looks unlikely to work in the short term.

But many employers will not be able to do all this. At a time when the economy is fragile and businesses are struggling, making the recruitment of much-needed workers into vital jobs more difficult seems a strange move indeed.


 



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