The UK’s skills-based migration system is in need of a dramatic overhaul, according to a senior associate at global HR lawyer Lewis Silkin.

Naomi Hanrahan-Soar, who is also vice chair of techUK’s Skills, Talent and Migration Group, says the current process is far from ideal.

CAST YOUR VOTE IN OUR SEARCH FOR THE UK'S MOST EXCITING START-UP COMPANIES

She believes the current Tier 2 visa regime could have a significant impact on the UK economy, especially the tech sector, where “businesses are dependent on attracting and retaining the best and brightest international talent”.

shutterstock

The current system could leave businesses seriously out of pocket.

In an insight exclusively for BusinessCloud, Hanrahan-Soar wrote:

“The calls for for a more effective UK skills-based migration system are growing ever louder.

In reality, the current system is arguably far from business-friendly, with recent reforms, particularly to the Tier 2 visa regime, having potentially significant impacts on the economy, especially in the tech sector where businesses are dependent on attracting and retaining the best and brightest international talent.

The most relied upon and commonly used work visa for employers in the UK is the Tier 2 visa.

It comes in two forms; Tier 2 General and Tier 2 ICT. Once upon a time they were fairly simple creatures.

However, as the system has developed and mainstream politics has focussed increasingly on reducing net migration, Tier 2 has become more and more onerous for employers.

The underlying idea is to use the migration regime as a behavioural tool to ensure that employers’ first choice is to use “settled labour”, ie. British, European or settled workers in the UK.

In order to “encourage” employers to do so, the cost of employing a foreign worker has more than doubled in recent years and is set for another big jump.

Since April 6, the basic Government immigration charges for one skilled foreign worker to be brought to the UK for the five years it takes them to reach settlement is £7,363.

That’s before factoring the practical costs of an international transfer or recruitment, or any family members they may have with them.

Then there is the cost of professional assistance to ensure those fees aren’t wasted on a refused application and to mitigate the risk of losing the ability to sponsor foreign employees through unintended (though easily incurred) non-compliance.

This means an additional cost for businesses of a minimum £1,000 per sponsored worker, per year of their visa.

Couple this with more and more serious and costly penalties for non-compliance and it is a wonder that employers still use the system at all.

Except that it isn’t.

If you’re a tech employer, you simply need skilled foreign workers. Tech is a global industry requiring specialist skills that develop too quickly to make upskilling an unqualified local worker, via systems such as the Government’s apprenticeship schemes, a commercially viable option.

shutterstock

The US tech giants knew it when they put their names to a strongly worded letter to Donald Trump regarding his so-called “Muslim ban” - and that migration restriction was aimed at a relatively small portion of prospective foreign workers.

For many tech businesses working out budgets for the next year, planned UK immigration costs will more than double.

Also, when assessing potential business risks, it is critical to factor in the potential to lose all sponsored skilled workers if sponsor duties aren’t kept up with, including those that are easily missed such as changes to corporate ownership.

Not to mention that employers can be imprisoned for five years and companies fined an unlimited amount if an employee works illegally - which can be as simple an oversight as a student visa holder working more than 20 hours one week during their official term time.

Longer term, after the triggering of Article 50, the UK tech industry’s immigration requirements need to be assessed robustly, with the industry’s voices a key part of the future negotiating strategy and subsequent migration policy.

Fundamentally, the ability to recruit the best and brightest from dynamic cultures and international businesses is critical to ensuring the tech economy continues to be innovative and produce huge GDP value for the UK.

In the meantime, though, businesses must prepare for the added compliance and cost burdens coming rapidly down the track.”