Only 3.5 percent of UK employers currently possess a licence to sponsor EU or non-EU workers – despite widespread talent shortages nationwide.
This is according to latest Government data analysed by immigration law firm, Migrate UK.
With unemployment now at its lowest level since 1974, according to latest ONS figures, many organisations – from large PLCs to privately owned businesses – are still failing to use sponsor licences to aid recruitment.
This is despite the fact that for the vast majority of EU workers, employers need to hold a sponsor licence from the Home Office to employ them following Brexit.
How long do sponsor license applications take?
With sponsor licence applications currently taking 2-3 months to process on average, Migrate UK is advising businesses suffering from persistent skills shortages to apply for a sponsor licence now to support their recruitment.
It is important to bear in mind that the type of skills a firm requires and previous recruiting experience will dictate potential sponsorship costs.
Once a business has a licence in place it can be used as needed.
While for potential overseas candidates those employers who already have a licence will be more attractive than companies without – as they know the business is already approved by the Home Office for up to four years at a time, and it will minimise delays to their onboarding.
Jonathan Beech, Managing Director of Migrate UK, said:
“Our analysis of government data of active businesses found there are 1.4 million private sector employers in the UK. While the Government’s own list of current registered sponsors shows that only approximately 50,000 hold a licence, which means that just around 3.5 percent are currently in a position to employ new EU or non-EU arrivals.
“Shockingly, since our last analysis prior to Brexit in May 2020, there has only been about a 1.5 percent increase in sponsor licence holders among businesses – even though this was the biggest change to the UK immigration system in nearly 45 years. When new clients come to us they often say they have delayed this process due to the perceived cost, complexity and amount of red tape needed to do so.”
“This is not only worrying for the individual UK businesses having sufficient talent in place to provide products and services effectively, but also UK plc. We’re hearing day in and day out of the issues firms are having in recruiting sufficient staff, especially those in the hospitality, science and engineering sectors.
“With the Home Secretary returning less than a week after resigning from the role, some businesses may be living in hope for some mooted changes to the shortage occupation list. The key problem – aside from including some much-needed ‘less’ skilled occupations such as care workers or chefs – is that this list isn’t attractive as it once was to employers. To really benefit from this list certain jobs should be exempt from the Immigration Skills Charge (between £364 and £1,000 per year of sponsorship, payable by the employer), plus the costs of the NHS Surcharge (between £470 and £624 per person per year), normally covered by the employee. So this is a large undertaking for overseas recruits especially for lower paid roles.”
Jonathan adds: “Those businesses with a licence in place are not only able to recruit more readily now to help deal with their present skills shortage, but will also be better prepared when the economy takes off again following current UK and worldwide challenges.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.