Businesses must create domestic talent pipelines to replace the declining immigration

To fill skills gaps, the government has stated that businesses should look to the local job market and not hires from abroad. Kelvin Tanner at Charles Russell Speechlys writes that achieving success is difficult, especially with the other burdens businesses face.

Keir starmer, the prime minister, announced in his speech of 28 November that his government will introduce plans to reduce net immigration. In a forthcoming white paper, the Prime Minister will provide more details. He also stated that the government was cracking down against abuses in the immigration system. These changes will affect businesses and they must prepare for them. They should expect a more strict approach to immigration compliance, and a change in how they recruit and keep international talent.

Recent amendments to the Employment Rights Bill have already stated that employers who flout the rules could face a two-year ban from hiring foreign workers. The length of the “sponsor actions plans” will be quadrupled from three months to twelve months for sponsors who breached compliance obligations.

According to the latest migration statistics, net migration in the UK increased from 224,000 in 2019, to 906,000 by June 2023. It is not new for a new Prime Minister to pledge to reduce net immigration. However, it is important to note that observers anticipate net migration to drop in 2025 due to stricter rules regarding salaries and dependents of students. The record numbers, along with media and political pressures, seem to be driving the shift towards a more robust immigration system.

The Home Office has already begun to focus on immigration compliance, and those who have violated compliance are feeling the impact. According to the latest statistics on migration and work visas, sponsor licence revocations have more than doubled from Q1 to Q2 2024. In the same time period, suspensions also increased by 69%. We will wait for the Q3 numbers to see if the trend has continued since the election. This enforcement increase appears to be a sign of the tighter immigration compliance environment that was outlined by the Prime Minister in his speech.

What does this mean to UK businesses and especially those that rely on global talent pools? Sponsor licence holders, in exchange for being able sponsor migrant worker, are already subjected to a number immigration compliance responsibilities. This includes a requirement to adhere to UK immigration and employment law. Sponsor licence holders should be alerted to the importance of compliance by this focus.

We urge them to review their immigration and employment policies immediately and ensure they are adequate. You may want to perform internal or external audits in order to determine if they are being adhered to properly and to identify any weaknesses. Some businesses may need to provide training for those who are involved in immigration issues on a daily basis to improve their skills and ensure they understand the sponsor compliance responsibilities, internal policies and procedures.

Companies should plan ahead in an environment where immigration compliance is stricter and the government has suggested that it will require resident workers to be trained to qualify for Skilled Worker Visas. They can also upskill their resident workers to reduce their dependence on migrant labor. It will also reduce the risk of uncertainty resulting from the “new expectations” announced on the training of resident workers. It could be a reimagined Resident Labour Market Test or mandatory training scheme. It is likely that the process of sponsoring visas will become more expensive and burdensome. Skills England is the new body that will oversee domestic upskilling. It has been announced for a long time, but its full powers are still unknown.

The Migration Observatory of the University of Oxford gives a wider context. It notes that, although net migration numbers have been high, these are comparable to other high-income nations and are now tapering off due to late changes made by the previous administration. Focus should therefore not be solely on numbers, but also on the quality and compliance of the immigration system.

The Prime Minister acknowledges the skills shortages in Canada, which has led to record net migration. This means, we hope, that the plans of ministers to deal with this issue go beyond stricter immigration regulations and increasing costs and burdens on businesses who are already struggling to find workers. The number of skilled workers coming to the UK will be reduced only when the government has found a solution to the skills shortage.

If employers and the government are willing to work together in order to train and upskill resident workers, then we may be able move toward a more symbiotic relation between immigration and domestic employment.

Personnel Today has the latest HR job openings.

Browse Human Resources Jobs