Verity O’Keefe, the senior employment and skills policy adviser to the UK manufacturers’ organisation EEF, had urged the government not to proceed with planned Tier 2 visa changes or, at least, pause them. O’Keefe had warned that further restrictions to the Tier 2 visa programme for non-EU migrants will exacerbate Britain’s skills shortage. Since she made the remarks a further announcement has been made and it will be more difficult to come under the Tier 2 visa scheme and Tier 2 Sponsorship Licence Scheme.
According to O’Keefe, the uncertainty surrounding the free movement of people from the EU since the Brexit vote has caused alarm among employers, who are very worried about their ability to employ workers with the necessary skills they’re likely to need in the years ahead.
In a statement on the EEF website, O’Keefe said: “Worryingly, three-quarters of manufacturers have struggled to recruit highly-skilled engineering professionals in the past three years, and few are confident that they will be able to recruit the engineers they need in the next three years.”
Manufacturers worried about skills shortages prior to Brexit
Even before the Brexit vote, manufacturers had voiced concerns about their chances of recruiting foreign workers on the Tier 2 visa scheme. O’Keefe said: “The manufacturing industry as a whole relies heavily on EU nationals. Around a quarter of companies say they specifically recruit EU nationals to find the skills their businesses need.”
“Free movement of people is undoubtedly going to be a hot topic when negotiating the Brexit deal. It’s apparent that the government has priorities to work out the best deal when it comes to Europe.
However, the government could take steps to support UK manufacturers by holding off or, scrapping entirely, the upcoming changes to non-EU migration. At a time of great uncertainty, and concern about the ability to attract skilled people, now is not the time to be significantly restricting the talent pool,” O’Keefe said.
Ms O’Keefe would prefer to see the impending Tier 2 immigration skills charge, due to come into effect in April 2017, abolished. In O’Keefe’s estimation, it will cost large employers recruiting non-EU nationals up to £1,000 per worker, per year.
She has also urged ministers to backtrack on the newly implemented, minimum salary threshold for tier 2 visas that came into effect in April 2016. O’Keefe argues that the new thresholds are ‘unlikely to be as affordable as first perceived.’
O’Keefe said: “The proposed increases from £20,800 to £30,000 have limited impact on UK manufacturers who, in general, pay above this rate for highly-skilled engineers, but our own pay benchmarking suggests that a couple of job roles are just about at this rate. What we don’t know, however, is the true impact of the EU referendum result on plans to recruit, and ability to increase or even maintain, pay in the future.”
Tier 2 Visa intra-company transfers
In O’Keefe’s opinion, new legislation affecting Tier 2 intra-company transfers (ICTs) should also be stopped. She said: “To begin with, the government will increase the minimum salary for short-term ICTs to £30,000. Possibly manageable. But – wait for it – they will then abolish the short term ICT by April 2017, allowing only long-term ICTs.
Any worker, when recruited under a Tier 2 ICT, not on a graduate programme will need to be in receipt of a salary of £41,500 – a considerable increase from £24,800 previously. One of the arguments for such an increase was that the ICT route was initially established for only senior leaders and managers.
However, global companies have an expectation that they can move employees across sites across the globe, which is required not just for senior managers but others as well. “It is not unknown for junior managers and those entering into the company (not on a graduate scheme) to experience time across the business all over the world. However, employers will soon be expected to pay quite the premium price to make that happen,” O’Keefe said.
The government needs to reflect on the challenges likely to affect employers in the years ahead, according to O’Keefe. Upcoming “changes to non-EU migration are just one of many costs that UK businesses are expected to absorb in the future, along with - the national living wage and the costs of reporting the gender pay gap, as well as the remaining few who will be auto-enrolling and businesses still carrying the burden of changes to holiday pay” she went onto say.
O’Keefe said: “This extends way beyond businesses facing additional costs. Tier 2 visa reforms add to the restrictions they already face in trying to access the skilled workers they so desperately need. If the UK truly wants to remain competitive in world markets, cutting off access to non-EU workers is a risk the government can’t afford to take.”
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