“Talent Crisis” is probably too strong an expression.

“War for Talent” is the phrase coined by McKinsey almost 30 years ago and has been overused and is often slightly misunderstood.

“A shortfall between the supply of talent compared to the demand” is a less dramatic description -but it best describes the situation that many employers have faced across the North and the Midlands in recent years.

Sharpening up your EVP, reward benchmarking and picking the right recruiter will give any employer a competitive edge, but not in every circumstance. Candidate pools for some skillsets are increasingly shallow and the inflation of wages has been too steep for some employers. These are some of the factors that have led to an increased level of interest and activity from employers to consider overseas talent.

We have been spending more time with Kathleen O’Donnell – Director at Fragomen in Sheffield recently. Fragomen are a legal firm specialising in immigration. They offer immigration advice in over 170 countries and (in our opinion!) are the best first place for any employer considering overseas talent to visit.

We have presented our attempt to outline the current market, demystify the subject of international recruitment and present our advice ………

Engineering and Accountancy – these are two of the disciplines where we have increasingly seen issues for employers. Larger employers have been targeting candidates from abroad for many years and have been enjoying the benefits of increased productivity and building multicultural teams.

The larger SMEs are now more curious of the opportunity of international recruitment. There is often a mental block in taking the step from curiosity to action. It “feels like something that is not an option for them” or they don’t know where to start assessing the viability. Is this an issue that you can relate to and what is the first piece of advice for these employers?

Our clients, first and foremost look to hire local, UK talent, but a number of sectors simply must look outside the country as well to fill all the necessary roles in order to stay competitive or provide crucial services.   However, following recent changes to the Skilled Worker visa which raise the minimum salary threshold, has impacted how businesses can effectively recruit from abroad. The changes are as follows:

• The general salary threshold for a Skilled Worker visa has increased to £38,700.
• Individuals must also be paid the going rate for the occupation. The going rate for roles is based on ASHE- Annual Survey of Hours and Earnings and is now set at the median rather than the 25th percentile. This means that salaries across the board under Skilled Worker category have gone up.  
• The Shortage Occupation List (SOL) was abolished and replaced with the Immigration Salary List (ISL), incorporating just 23 occupations. In addition, there is no longer a discount to the going rate for occupations on the list.

There are exemptions for existing visa holders – those already in the UK under the Skilled Worker category or who made applications prior to 4 April –will not be subject to the new median level thresholds, but still subject to increased salary requirements as the 25th percentile rates still applied to them will be based on latest salary data.

New entrants only need to meet the higher of a minimum salary of 30,960 GBP or 70% of the going rate, which may help with the hiring of talent from the local universities, colleges and schools.

A Skilled Worker applicant can be a new entrant if they meet one of the following options: under 26 on the date of application; their most recent permission was under Tier 4 (General), a student visa or the graduate visa. An individual can only be sponsored for four years under the new entrant threshold.

There are other concessions for holders of PhD qualifications, qualifications in a STEM subject or those on the ISL will continue to benefit from a discount to the general salary threshold.

Many of the role types that are in most demand are in the salary bracket of £40,000 to £70,000, so they fit within the threshold that you have mentioned. What are the major differences between the Shortage Occupation List and the Immigration Salary List?

If we look at the accounting professions as an example, these don’t appear on the new Immigration Salary list.

And following the salary threshold increases, accountants now must be paid £46,800, in increase from £31,300 which will no doubt have an effect on hiring practices.

Employers should consider the other routes available to them, such as:

• The UK graduate visa, which allows applicants to work in the country, in any role, for any employer and without salary thresholds for two years after a completing a UK degree course or three years after a PhD.
• The high-potential individual visa, is a route open to those who have graduated from a top global university to stay in the UK for two years and work in any role.
• The youth mobility visa which was expanded to new categories of applicants in January 2024.
• The global talent visa, which is a flexible route aimed at individuals who can show that they have exceptional talent or promise and have been recognized as or have the potential to become a global leader in certain fields, including science, engineering and digital technology.

The change to the going rate may cause a significant impact on key industries in the region and could impact the roles businesses are able to sponsor in the future.  

The South Yorkshire Quarterly Economic Survey conducted in Q1 2024, found that workforces continued to grow overall during that period with results suggesting a robust expansion for the third quarter in a row. The survey also found that  

65% of firms that tried to recruit experienced difficulties and that recruitment difficulties have significantly eased since Q1 2023.

However, following the new immigration regulations, and yet to be implemented changes from the new Labour government, it is possible businesses will contend with recruiting challenges towards the end of the year.

According to Embracing Future Potential, which supports job seekers and employers, the key industries in the North are manufacturing, healthcare, education, technology and digital, and retail and hospitality --the majority of which have previously benefitted from reduced salary requirements on the SOL.  Since April 2024, the new ISL no longer gives these sectors the benefit of a reduced salary requirement, further impacting recruitment difficulties.

Read the second part of the Article here…