UK: Uncertainty For Employers Looking To Recruit Overseas Talent

Last Updated: 29 June 2018
Article by Neil Shanghavi and Natalie Loader

The Home Office has announced that from 6 July 2018 doctors and nurses will be removed from the capped quota for new workers coming to the UK requiring a Tier 2 (General) visa. This is welcome news for UK employers: since December 2017 the monthly cap on Tier 2 Restricted Certificate of Sponsorships ("Restricted CoS"), required in order to make a Tier 2 (General) visa application, has been reached each month. This has resulted in businesses being unable to make crucial hires of workers from outside of the EEA. With NHS doctors and nurses making up 40% of applications for Restricted CoSs, the removal of this group of workers from the monthly cap will significantly increase the number of Restricted CoS available to other business sectors each month.

Background

Each month, a Home Office panel gathers to decide which UK businesses will be awarded a Restricted CoS.  Employers depend upon these restricted certificates to bring highly skilled non-European workers to the UK for employment purposes.

The Home Office sets a quota limiting the number of Restricted CoS that may be awarded nationwide each month, however the quota is now too low. May 2018 marked the fifth month in a row where requests for Restricted CoS were oversubscribed, and only those employers seeking to fill roles at PhD level, roles on the government's shortage occupation list or roles paying high salaries, were lucky enough receive a Restricted CoS.

What does this mean for employers?

Without a Restricted CoS, employers are generally unable to sponsor non-European nationals currently outside of the UK to work for them in the UK. This means that employers cannot recruit the best talent, or even worse, find themselves unable to recruit at all.

In many cases, offers of employment have to be rescinded, businesses suffer a loss of talent and skills, business projects and needs have to go on hold, and employers are faced with the cost of undertaking the recruitment process all over again.

What is the Home Office doing?

The new Home Secretary, Sajid Javid, has taken decisive action within his first two months on the job.  On 15 June 2018 he laid before Parliament changes to the Immigration Rules confirming that health sector employers will now be able to apply for Tier 2 (General) visas for doctors and nurses without having to first apply for Restricted CoSs.  This should free-up Restricted CoSs for other businesses. 

While this represents a positive step forward and it will certainly ease the current situation, the total cap of 20,700 per year remains in place.  From the data released by the Home Office, 1,532 doctors and nurses applied for Restricted CoS in April 2018 with 811 applications being granted.  However, the total number of Restricted CoS applications across all business sectors for that month was 4,325 with 2,118 refusals.  The removal of doctors and nurses from the process will assist to reduce the backlog of applications, but it is likely to take several months until we return to the pre-December 2017 situation where all valid applications for Restricted CoS were granted.

What can employers do?

There is no 'one size fits all' answer.  Employers seeking to recruit overseas talent will need to look at the personal circumstances of their prospective worker, together with the profile of the role, and consider whether an alternative visa route might be open to them.

However, it is definitely worth considering the following:

  • Is there a lack of skills in the UK for the role your business is trying to fill? If so, consider whether your vacancy is on the UK's 'Shortage Occupation List' or is a PhD level role?  Such applications are awarded more points by the Restricted CoS panel and have significantly higher success rates.
  • Consider raising the salary on offer.  Employers offering new hires less than £50,000 p.a. have seen little respite in the number of refused Restricted CoS. However, even paying above this provides no firm assurance of success. In March 2018, Restricted CoSs were broadly issued to employers paying £60,000 p.a or more, before dropping back down to £55,000 p.a in May 2018.  The June 2018 data is still pending, but with the recently announced change, July will be the real test.  Of course, any salary offer must be genuine, however where your business can afford to pay £60,000 p.a. or more, based on the salaries which have been approved since December 2017 when the cap was first reached, this would greatly increase the prospect of being granted a Restricted CoS.
  • Does your business have an overseas office? If yes, you might wish to apply to the Home Office to link your overseas office to your Tier 2 Sponsor licence so that you could sponsor an Intra-Company Transfer Visa without the need for a Restricted CoS. 

So, what's next?

The removal of doctors and nurses from the cap will provide the health care sector and the UK with confidence that recruitment for these keys roles will not be fettered by immigration targets.  However, with the backdrop of Brexit, and immigration reform on the horizon, employers in other sectors still face uncertain days ahead.  All that we can point to now with a degree of certainty is that, many employers may find themselves having to revise their salary budgets in order to beat the quota cap.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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