On August 6th of 2024, the home secretary tasked the migration advisory committee to explore international recruitment and skills shortages in key sectors, starting with information technology, telecommunications, and engineering. These sectors are heavily dependent on international talent.
The new Labour government, during and since the general election, has said he wishes to “fix the foundation” of the UK’s economy to grow the economy while keeping taxes, inflation, and mortgages low. This vision depends on businesses having access to skilled workers. However, the government also seeks to reduce immigration, which poses a challenge given the ongoing skills shortages in various sectors. The policy tension, therefore, leaves employers uncertain about how they will access the talent required for growth.
In recent years, especially after Brexit, employers have increasingly turned to international recruitment to fill gaps. The previous government raised visa fees and introduced minimum salary thresholds to curb net migration. While these measures succeeded in lowering immigration numbers, they also limited the workforce available to support struggling sectors.
In July, the government announced the creation of Skills England, a new body that would work alongside the MAC and other bodies to tackle skill shortages. The MAC will incorporate immigration strategies into this plan, assessing how international recruitment can help address skill gaps while considering the needs of local workers.
What will the MAC do apropos international recruitment and skills shortages?
The MAC has been put to work with advising the government on why certain key occupations depend on international talent. They will analyse future demand and identify skill shortages, exploring factors such as training, pay and working conditions that contribute to these gaps.
The MAC has requested additional resources and data from the home office and HMRC in order to conduct this extensive review by the May 6,2025, deadline. Whilst they have not yet clarified if there will be a public call for evidence, they do plan to engage stakeholders.
Potential solutions
Critics of the current immigration system argue that a one-size fits all approach, particularly regarding salary thresholds, hampers recruitment outside London and the Southeast. The MAC previously resisted regional salary variations, but a change in this stance could help smaller business attract talent.
Start-ups and small to medium enterprises (SMEs) often struggle to fund training or meet the high salary requirements needed for international hires. A revived sponsorship option could, thus, allow these businesses to access needed skills without over-relying on immigration.
A framework like the previous recommendation by MAC, whereby they suggested adding certain digital technology roles to the shortage occupation list with only qualifying companies allowed to benefit, could now support smaller firms.
Another consideration is revisiting the discounted salary for shortage occupations. This discount was removed to protect resident workers’ wages, but the MAC previously indicated that recent salary increases have reduced risk. Restoring the discount could offer employers more flexibility, although the Labour government has not shown interest in this change.
As sponsoring international workers can be costly, with fees reaching £9,000 or more, employers generally prefer to recruit locally if the necessary skills are available. As ongoing salary requirements exceed those of British workers, local recruitment remains the preferred option for many businesses.
However, until the new skills strategy is implemented, immigration will remain vital for business growth. Short-term strategies must accommodate this need without imposing arbitrary restrictions.
What should Employers do?
Employers in the relevant sectors should stay informed about the MAC review. The MAC plans targeted engagement, likely involving industry bodies. Employers may want to reach out to these organizations to express interest in contributing. AS more sector reviews may follow, staying updated will be crucial for businesses across the board.
For more information
For more information on UK immigration services contact our head of immigration: Leena Chouhan on 02074275972
