UK gov’s controversial migration package is a risk to businesses needing access to global talent, says Localyze

In December, the UK government introduced a new migration package cutting legal migration and increasing the minimum salary threshold for skilled workers. This included an increase in the earning threshold for overseas workers from £18,600 to £38,700 and changes to the shortage occupation list, reducing the number of jobs where it’s possible to sponsor overseas workers below the baseline minimum salary.

The ambitious five-point plan outlined by the Home Secretary to reduce immigration is due to take effect this spring, with the visa threshold initially rising to £29,000.

International talent wanting to migrate to the UK faces various challenges if the government implements the planned changes, while employers are on edge, needing to be increasingly aware and prepared as policies fluctuate.

The latest round of changes are set to affect British residents and their non-British/resident partners and families, British companies looking to hire global talent and families of students studying, and in response to the proposed package, Hanna Asmussen, co-founder and CEO at Localyze, said:

“The proposed migration package is a step in the wrong direction for the UK, and the government is setting its economy up for failure, with the possibility of being left behind in the global employment market. There is no evidence of long-term thinking with this set of measures, and instead, it feels like a short-term knee-jerk reaction that is setting artificial limitations on supply and demand in the job market.

“Brexit has already made it much harder for businesses to source the talent they need, and these policies will only exacerbate the problem. Earlier in 2023, joint research from think tank’s Centre for European Reform and the UK in a Changing Europe found that Brexit led to a shortfall of 330,000 people in the UK labour force, which is a worrying trend that is likely going to continue.

“With more immigration comes more economic growth and innovation, so UK businesses must be able to acquire international talent to compete at an international level, particularly in innovative fields such as AI and tech development.”

According to Hanna, the UK government continues to fail to identify the importance of the financial contributions migrants make and economic growth will continue to flatline if job roles remain unfilled.

Hanna added: “Now simply isn’t the time for this package of measures. They will cripple businesses that desperately need to address the skills shortage in 2024, which is expected to be another challenging year economically for businesses of all sizes. Particularly for enterprise-sized businesses that have large employee pools and overheads needing to fill the talent gap with international hires while reducing costs – not doubling them.

“A higher threshold on salary is also impractical because this completely depends on the market, the role, and many other factors. Businesses will be unable to cope with such a steep and sudden increase in employee costs, and it could lead to layoffs, stagnation, and both local and international talent suffering in the long term.”

Hanna concluded: “If UK businesses are to remain competitive, boost productivity and ultimately build a stronger economy, they need access to skilled workers migrating legally and safely from anywhere in the world without more barriers being put in place. At the centre of this is the need to address the broken immigration process, which needs to be completely overhauled into an approach that is efficient and equitable, and benefits businesses, the UK economy and international talent alike.”