The UK's immigration system is set to change significantly following Prime Minister Keir Starmer's announcement of reforms aimed at addressing record-high net migration figures. With net migration reaching 906,000 in the year ending June 2023,
The Times reports that the government plans to focus on key sectors such as construction, hospitality, and healthcare to reduce reliance on overseas labour and encourage investment in domestic workforce development. (The Times)
For businesses that rely on skilled foreign workers, particularly those holding sponsorship licences, these proposed reforms introduce challenges but also opportunities for growth. Below, we explore the implications and provide practical guidance on navigating this evolving landscape.
Key Measures: A Brief Overview
The government's proposed reforms revolve around tightening the Points-Based System (PBS) and increasing compliance expectations for businesses. The measures include:
- Sectoral Focus on Labour Dependency
Construction, healthcare, and hospitality industries are being asked to reduce their reliance on international workers by prioritising domestic training and recruitment. - Enhanced Sponsorship Licence Compliance
Sponsorship licenceholders will likely face more stringent audits and reporting obligations, with an emphasis on demonstrating investments in local workforce development. - Adjusted PBS Criteria
Visa applications may require evidence that businesses have made genuine efforts to hire domestically, alongside meeting skill and salary thresholds.
These changes aim to address concerns about over-reliance on migration while ensuring essential skills are still accessible for businesses that need them.
Industry-Specific Insights: Preparing for Change
Each sector faces unique challenges and opportunities under the proposed reforms. Here's a closer look at how construction, healthcare, and hospitality can adapt:
Construction
The construction industry has long relied on migrant workers, particularly from Eastern Europe, to fill roles in areas such as manual labour, scaffolding, and skilled trades.
Under the reforms, construction companies may need to demonstrate efforts to recruit and train domestic workers.
- Adaptation Strategy:
Employers should consider partnerships with vocational training colleges to create apprenticeships for roles such as bricklaying, plumbing, and carpentry. Additionally, adopting technology-driven solutions like modular construction can help reduce reliance on labour-intensive processes. - Opportunities:
By investing in UK-based training, companies can address long-term labour shortages while enhancing their reputation as responsible employers.
Healthcare
Healthcare remains one of the most heavily impacted sectors, with significant workforce gaps requiring international recruitment to meet patient care demands.
However, the government is encouraging the sector to increase local training and development initiatives.
- Adaptation Strategy:
NHS trusts and private healthcare providers should explore partnerships with medical schools and nursing colleges to offer accelerated training programs for domestic students. At the same time, maintaining robust visa processes for international hires will remain critical. - Opportunities:
Investing in UK talent can reduce dependency on overseas workers, but careful workforce planning is essential to ensure continuity of care while transitioning to a more balanced recruitment model.
Hospitality
Hospitality has been one of the hardest-hit sectors post-Brexit, with businesses struggling to fill roles in kitchens, front-of-house, and housekeeping.
The government's reforms will push businesses to reduce dependency on migrant workers and focus on making hospitality roles more attractive to domestic candidates.
- Adaptation Strategy:
Employers should consider offering competitive pay, flexible hours, and career progression opportunities to attract local talent. Collaborating with schools and colleges to highlight hospitality as a viable career option could also help. - Opportunities:
These changes present a chance to redefine the perception of hospitality roles, improve working conditions, and create a loyal, locally based workforce. - Challenges:
The high turnover rates in hospitality make it uniquely vulnerable, and businesses will need to innovate to retain staff and meet compliance requirements simultaneously.
Broader Implications for Other Sectors
While the focus is on construction, healthcare, and hospitality, other industries such as technology, engineering, and education should also be prepared for scrutiny.
Building partnerships with local universities and expanding internship programs can help these sectors demonstrate compliance with domestic workforce expectations.
Practical Steps for Businesses
Adapting to these reforms requires careful planning and strategic action. Here are steps businesses can take to stay ahead:
- Audit Your Sponsorship Licence
Compliance
Review your compliance processesto ensure they meet Home Office requirements. This includes record-keeping, timely reporting of employee status changes, and staying audit-ready at all times. - Enhance Recruitment Strategies
Prioritise domestic recruitment by building partnerships with local schools, colleges, andjob boards. Offer training programs and career development opportunities to make your roles more attractive to UK-based workers. - Invest in Workforce Development
Take advantage of government-funded schemes for apprenticeships or upskilling. These programs not only fulfil domestic workforce expectations but also reduce recruitment costs in the long term. - Prepare for Tighter Visa Processes
Anticipate potential delays or additional requirements for PBS applications. Ensure your HR team is equipped to manage these changes, and consider seeking professional guidance to streamline the process. - Adopt Compliance Technology
Leveraging technology for compliance tracking, such as automated reminders for visa expirations and centralised documentation systems, can reduce administrative burden and improve audit readiness.
Opportunities Amidst Challenges
While these reforms introduce challenges, they also offer opportunities for businesses willing to adapt. For instance:
- Strengthened Employer Reputation: Investing in domestic talent can enhance your reputation as a socially responsible business, improving employee retention and customer trust.
- Futureproofing Workforce Strategies: By balancing domestic recruitment with compliant international hiring, businesses can build more resilient workforce strategies.
- Access to Skilled Talent: Despite reforms, the points based system will still enable businesses to hire from overseas when necessary, provided they meet compliance standards.
Staying Ahead of Policy Changes
With the government prioritising domestic workforce development, businesses must remain informed and proactive.
Assigning responsibility within HR or working withimmigration professionalscan ensure that your business stays compliant and prepared for new requirements.
Final Thoughts
The UK's immigration reforms highlight a pivotal moment for industries that rely on foreign workers. For businesses in construction, healthcare, and hospitality, these changes will require a strategic approach to workforce planning, compliance, and recruitment.
While the challenges are significant, they also present an opportunity to innovate and build a more sustainable workforce.
By auditing current processes, investing in domestic talent, and staying ahead of policy developments, businesses can not only adapt to these reforms but also thrive in a more competitive and regulated environment.
The time to act is now—ensuring compliance and resilience in this dynamic landscape is essential for long-term success.
The main question is how will the government implement these changes and can they implemment changes that led to lower immigration and a growing economy at the same time, when economic data has shown that immigration helps grow the UK economy.
Originally published on December 4, 2024
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.
