Will the government’s recently announced plans to double the quota of “exceptional talent” visas to 2,000 per year really give the tech sector the boost that it needs? Or could this increased quota actually be more headline-grabbing than substance?
What is the exceptional talent visa route?
The Tier 1 (Exceptional Talent) visa route was established for exceptionally talented individuals and covers the fields of digital technology, science, engineering, the arts and humanities. Applicants must first be endorsed by an ‘oversight body’ which, in the digital technology sector, is Tech City UK. As part of the endorsement process for what is known as the ‘Tech Nation’ visa, applicants must demonstrate that they are either an established world leader in their field or have the potential to become a world leader.
Impact of doubling the exceptional talent quota
Although, undoubtedly, the increased quota will mean more exceptional talent visas will be issued, this will only be up to a maximum of 400 per year under the Tech Nation visa scheme (since the 2,000 limit will be spread across the 5 sectors).
Whilst this increase will be welcomed by many, looking at the digital technology industry as a whole and the issues that tech employers contend with to recruit talent, it’s difficult to see how an additional 200 visas will have a significant impact.
Is the government doing enough overall to protect the tech sector?
Brexit is looming and there is still no real certainty on what this means in practice for tech employers who rely on a European workforce. According to techUK, one in six new hires between 2009 and 2015 were EU citizens. Employers in this sector are already making use of Tier 2 of the points-based system to sponsor non-UK and non-EEA individuals.
In fact, the information technology sector as a whole accounted for 42% of all Tier 2 applications for the year ending June 2017. Overall the picture is of an industry that relies heavily on a non-UK workforce, but it remains to be seen whether the Government is adequately supporting immigration needs.
Some measures have been introduced in recent years to support the sector:
Tech Nation visa – introduction of ‘fast-track’ scheme: Since November 2015, Tech City UK has provided a fast-track scheme so that applications can be processed quickly where the applicant will be contributing to the ‘Northern powerhouse’ cities such as Hull, Leeds and Liverpool or where the individual has the technical and business skills to build UK scale-ups. There is also the ability to fast track applications where an overseas team of up to 5 individuals is relocating to the UK.
Digital technology jobs on shortage occupation list for Tier 2: Employers with a Tier 2 sponsor licence can apply to the Home Office to pre-register to sponsor individuals under four digital tech jobs including senior cyber security specialist, senior developer, data scientist and product manager. The roles are for those with at least 5 years’ experience who are able to lead teams and train others.
The advantage of these roles being on the shortage occupation list is the employer is then exempted from having to carry out the ‘resident labour market test’ before sponsoring the individual – this means that the employer does not need to advertise the role and try to recruit from the resident UK population.
Relocation of high-value business to UK or significant new inward investment projects – exempt from the resident labour market test: If the Tier 2 role supports the relocation of a high value business to the UK or a significant new inward investment project - specified as involving new capital investment of at least £27 million or the creation of at least 21 new UK jobs - there is also no need to carry out the resident labour market test.
Challenges facing tech employers
Despite these welcome changes, the 2017 Tech Nation report found that over 50% of employers highlighted talent supply as the ‘number one challenge’ facing their digital tech businesses and nearly 25% cited sourcing talent as a major challenge. As many employers are aware, they are immersed in a global competition to attract and retain talent. Even where a particular role may qualify for sponsorship under the Tier 2 regime, the visa process can be lengthy, especially if advertising is required, and talented individuals may already have taken up another job offer by the time UK employers are able to offer the role formally.
The costs of sponsoring an individual under Tier 2 have also increased dramatically in recent years. The recently introduced Immigration Skills Surcharge adds an additional £1,000 per year (£364 for small/charitable employers) on to the cost of a Tier 2 visa and this cost cannot be passed onto the employee. All Tier 2 applications are now subject to the Immigration Health Surcharge which is an additional £200 per year and also applies to dependants accompanying the individual.
Of significant impact to the digital technology sector is the removal of the Tier 2 (Intra Company Transfer: Short term staff) category. This was often used to bring across key staff from overseas group companies for short periods of up to a year. In order to transfer staff now, employers must pay additional costs, including a minimum annual salary threshold of £41,500 and increased visa fees, to use the ‘Long term staff’ category instead.
Overall, the measures introduced under Tier 2 to support the tech sector are extremely limited, especially considering the increased costs and administrative burdens placed on employers wishing to sponsor individuals. Despite the government re-affirming its message that it is committed to the tech industry and the recent announcements of new funds to invest in Tech City UK and training young people in cyber security, more could be done to ensure that the industry will be able to recruit the global talent that it needs now and in the near future. The addition of 200 exceptional talent visas is just not enough.
Practical steps for employers
There are uncertain times ahead, particularly for leaders of tech companies. Considering immigration and talent matters now, ahead of Brexit, is wise. The following steps will help to safeguard current workforces as well as the recruitment of global talent:
- For EEA employees (or their family members), encourage or support them to review their current immigration status in the UK to see if there is any residence documentation they should apply for now, such as Permanent Residence or naturalisation as a British citizen;
- As the Tier 2 regime is likely to become even more crucial in recruiting top talent, consider applying for a Tier 2 sponsor licence now, if that is possible. If the company already holds a Tier 2 sponsor licence, ensure ongoing compliance with your sponsor obligations to minimise any future risk to the ability to sponsor individuals under Tier 2.
Jackie Penlington, Senior Associate at Stevens & Bolton LLP
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