While it has become more difficult to recruit overseas workers in recent years. Suzanne Treen explains that employers who are facing a skills gap can still gain an edge through strategic immigration.
After the Labour election, it was clear that the UK’s growing skills gap must be addressed to generate the much needed economic growth. Sir Keir introduced Skills England to achieve this. Skills England will lead a review of skills that are most lacking in the UK’s economy, and will address the domestic skills shortages.
The government’s intention to reduce the reliance on foreign workers and curb legal migration is at the forefront.
The first Skills England Report, published in September, presented an overview of current UK skills landscape. It highlighted both the challenges as well as the opportunities that the UK faces.
The report is alarming, and shows a growing mismatch in the capabilities of employees and business needs. This trend could have a negative impact on the UK’s growth and economic competitiveness.
The report states that the UK workforce has a particularly low level of qualification compared to those in other countries.
The OECD skills for jobs database indicated that 26% (or the UK workforce) are underqualified for their occupations, compared with an OECD median of 18%.
Skills England also referred back to the OECD estimate that UK has a skills shortage in 10 out of 14 skill and knowledge groups analysed.
It will take time for these initiatives and policies to be implemented and to have any impact. Some employers cannot wait until such policies are implemented to get the skills they need.
It may be difficult politically to promote the benefits of skilled migration, but it is evident that a nuanced approach and conversation is needed to close the skills gap. The government must listen carefully to employers about the tools that they need to grow and upskill workers.
It is evident that the routes of strategic and skilled immigration continue to be an important tool in the hands of employers, and they also contribute to increasing domestic skill development and driving economic growth.
Finding the right balance
In recent years, Brexit has made it much more difficult to recruit and retain overseas workers. According to a recent study by Indeed, the UK has fallen behind other Western countries when it comes to attracting highly-skilled overseas workers.
There are many reasons for this, but it’s clear that the increased thresholds on salaries for skilled workers introduced by the previous government in spring and maintained by the new one has had an important impact on overseas recruiting.
This year, the number of people who applied to come to Britain as healthcare professionals, students, or skilled workers has decreased compared to last year. Skilled Workers visa applications decreased to 4,700 per month in October 2024. This compares with an average monthly number of 6,000 between January 2022-March 2024.
Reduced recruitment of skilled overseas workers could have an impact on sectors like tech and engineering that rely heavily on international talent and global business mobility to fill specialist roles.
It will take time to address the skills gap in these sectors, but there are some sensible solutions that can be implemented both short- and long-term.
Many people are now advocating a reduction of the cost and complexity in the visa process, especially for highly-skilled workers in certain sectors. In the tech sector for example, the AI Opportunity Action Plan aims to provide a roadmap to the government in order to maximize the potential of AI. The government could use this opportunity to examine how to best encourage development by utilizing both domestic and overseas talent.
If the UK fails to address the skills shortages within the tech industry, it risks falling behind its competitors in terms of the adoption of digital technology and the growth potential offered by AI.
Great power comes with great responsibility
Employers who are sponsors of workers or have used other routes to the UK that are not sponsored will be familiar with our complex immigration rules.
It is true that, in light of the skills shortages that employers are facing, obtaining and maintaining sponsor licenses can give employers the competitive and strategic edge they need to fill the skills gaps within their businesses.
It is important to get it right, especially given the renewed focus on compliance placed by the government, which announced its intention to crack down on sponsors who do not meet their obligations.
Skills England’s latest report highlights the UK’s skill shortage. We need to tackle the root causes of the skills shortages in the UK to ensure a sustainable future. However, we also need to have a nuanced discussion about the solutions available.
Global talent is more needed than ever. To attract and retain this talent, a pragmatic immigration system that better balances business and social needs is needed.
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