- within Law Department Performance, Employment and HR and Real Estate and Construction topic(s)
- with Senior Company Executives and HR
- in United Kingdom
- with readers working within the Property and Law Firm industries
Workforce challenges and immigration impact
As the manufacturing sector moves further into 2026, businesses across the UK continue to face heightened workforce pressures—from persistent skills shortages to rising labour costs and the ongoing challenge of maintaining operational resilience. Against this backdrop, recent and upcoming changes to the UK’s immigration framework are set to have a significant impact on manufacturers’ ability to recruit, retain and legally employ the people they need.
Over the past year, the UK immigration landscape has undergone substantial shifts. Notably, increases to English-language requirements for certain work routes and continued tightening of eligibility thresholds have signalled a clear direction of travel for government policy.
Upcoming reforms and employer responses
Additional reforms scheduled for 2026 - including the expansion of the right to work check regime and new earned settlement rules - are prompting employers, including many in the manufacturing sector, to reassess their talent and compliance strategies.
Manufacturers are responding in different ways.
Some organisations are placing greater emphasis on recruiting world-class talent, such as AI and Machine Learning Engineers, as well as Automation and Robotics Engineers, especially for companies aiming to leverage technology to tackle labour shortages, lower operational costs, and boost productivity.
Others are prioritising support for staff across all skills levels. This includes investing considerable resources in salary increases to maintain eligibility for sponsorship where necessary.
Despite differing approaches, one consistent theme is a renewed focus on aligning sponsorship policies with workforce priorities. However, many manufacturers remain heavily concentrated on "future-proofing" their operations- sometimes at the expense of fundamental immigration compliance. This creates significant operational and financial risk, especially for businesses managing large facilities, shift‑based workforces or high volumes of temporary labour.
Compliance challenges and operational risks
Common compliance challenges emerging within manufacturing include:
- Insufficient documentation, specifically relating to sponsorship under Appendix D or right to work checks
- Limited understanding of sponsor obligations, which may result in serious issues such as failure to renew a sponsor licence when required, particularly if the sponsor licence-holding entity undergoes acquisition
- Overlooking mobility requirements for international employees, such as lacking work permits for those splitting roles between the UK and other jurisdictions, potentially breaching visitor rules.
These examples highlight the risk of prioritising recruitment strategy without ensuring the basics are firmly in place. Manufacturers should revisit their fundamental compliance processes, conducting thorough immigration compliance audits to identify gaps before adopting or revisiting wider talent policies. For businesses that depend on international hires to maintain production levels or introduce new technologies, such steps are vital.
Failing to do so may create gaps within organisational processes and policies, exposing manufacturers to penalties and, for sponsor licence holders, possible licence revocation— restricting access to global talent via sponsored routes.
Global talent competition and enforcement trends
As competition for global talent intensifies, error margins must be minimised. Net migration is now at its lowest point in five years, and data from the Home Office shows a 19% decline in worker visa applications in the year ending December 2025 and a 50% decline over a two-year period. It's also worth noting that the Home Office continues to strengthen its enforcement activity, with record levels of illegal working arrests and site inspections reported across the UK.
The importance of proactive compliance
Against this backdrop, it is essential that manufacturers undertake a proactive review of their immigration compliance - whether through immigration compliance mock audits or internal health checks. A common misconception is that employers without a sponsor licence face little to no immigration risk. In reality, all employers, irrespective of licence status, must carry out compliant right to work checks to obtain statutory protection against illegal working.
For the manufacturing sector—where workforce stability directly impacts output, safety and customer fulfilment—robust compliance is not just a legal requirement but a business-critical necessity for the year ahead.
Womble Bond Dickinson’s dedicated immigration team provides detailed health assessments and conducts comprehensive immigration compliance mock audits for both sponsor licence holders and non-sponsor licence holders.
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.
[View Source]
