A guide to the cost of immigration

Written by
Will Tear

10 Feb 2016

10 Feb 2016 • by Will Tear

In June last year, the Home Secretary, The Rt Honourable Theresa May, MP, commissioned the Migration Advisory Committee (MAC) to review the Tier 2 visa route. The MAC asked for evidence across many different industry sectors to advise on helping to reduce migration, while making sure the UK can attract the top talent in the pursuit of economic growth. Its recommendations were published recently.

How can you keep up with the rising costs?

The key recommendation has been focused on increasing the price an organisation has to pay when looking to hire someone from outside of the EU. As stated by Sir David Metcalfe, the Chair of MAC, the introduction of an immigration skills charge (ISC) of £1,000 per assignee per year, as well as increasing the salary threshold of migrants on the Tier 2 visa category £30,000 would “reduce the use of migrant labour.” 

These are only recommendations at this stage, however it means firms would have to analyse the cost of taking on migrant labour much more stringently. The alternative that the government is trying to push is companies investing in training rather than importing talent from outside the EU. But is this realistic?

Before the MAC released its findings on the Tier 2 visa catergory, there had already been huge scrutiny, with many industries and senior figures speaking out. Keith Vaz, Chairman of the Home Office Select Committee on the Home Office, reported that the cap on Tier 2 “did not fit and may even be counterproductive”. 

Increased costs causing set backs

Indeed, in October, an open letter from some of the UK’s most successful technology entrepreneurs (including Lastminute.com, Zopa, Shazam and around 230 other investors and technology start-ups) challenged the Government, saying that “any changes to the immigration system must make it easier, not harder, for digital entrepreneurs to come to the UK to start their business, and for growing start-ups to hire top international talent”. 

Small business would be expected to be hit hardest by this cost increase and could actually be detrimental in the growth of the UK economy. The stance of many in industry, who implore the importance of recruiting talent from the global stage - which is not available in the UK – so they can maintain a competitive edge. We have, according to a PwC report; a fluctuating global economy where the UK is still in growth and where it is more important than ever for firms to remain competitive. 

The CIPD also discusses the situation, publishing that global mobility is the fastest growing area in HR.  

From a recruitment perspective where we see the competition first hand, it is becoming harder and harder to recruit for specialist roles. In the City, counter offers are second nature in the pursuit to keep skilled labour. I’ve seen a rise within global mobility vacancies, but also the specialism’s within them, e.g. immigration, tax, compensation etc. I understand from the specialists I speak to in the industry they expect this trend to continue, mainly to recruit top talent.

The government will review the MAC’s recommendations, however talent, is evident to see, comes from a global marketplace. To me, it is vital for the Government to recognise international recruitment as a key fixture in the UK economy so we maintain growth & competitiveness in uncertain times.