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The UK technology sector could experience shortages of skilled staff while the government formulates new visa rules to alleviate a shortage of EU citizens coming to the UK amid Brexit uncertainty.
Businesses are missing out on much-needed skills because the limits on visas set by the government every month are quickly being reached.
Fears around Brexit are leading to less skilled EU citizens coming to work in the UK, which is forcing businesses to look further afield.
UK organisations rely on overseas staff for IT more than other disciplines. Non-UK citizens make up 13% of the country’s digital technology sector workforce, compared with an average of 10% across the UK economy as a whole.
Tech firms are already reporting staffing problems caused by Brexit. Research of 5,400 tech founders, carried out by Tech London Advocates (TLA), revealed that 55% said Brexit and how it affects the search for talent is the biggest threat to startups and scale-up companies in London. One-third said they have seen talks with potential international hires falling through because of the UK’s planned exit from the EU.
Many might be turning to staff from outside Europe. For example, they may use the immigration rule that allows organisations to bring in non-European Economic Area (EEA) nationals on what are known as restricted tier 2 (general) worker visas. This has a set monthly cap for the number of workers allowed in. There is an annual limit of 20,700, which is split unevenly over 12 months. For example, in January about 1,400 visas were allocated.
A company looking for staff, known as the sponsor, must apply before the 5th of the month, then a Home Office panel meets to decide which visas to grant.
But in December 2017, this limit was reached quickly for the first time in years, and this trend continued into January.
Jackie Penlington, senior associate at law firm Stevens & Bolton, said this situation looks set to continue, at least until a new quota is set in April, with the number of visa allocations falling to 1,000 in February and March. “Since it was introduced, the monthly cap had only been reached once – back in June 2015,” she said.
Stevens & Bolton applies for these visas for its clients. “Generally, if the worker earned within the threshold of under £50,000 a year, you would expect to get the visa granted,” said Penlington.
But since December, applications on behalf of some clients have been rejected as a result of the monthly caps being reached. In December, all applicants earning less than £55,000 were rejected and in January all those earning under £50,000 were rejected, said Penlington.”
A huge proportion of these visas are used by UK companies to bring in IT skills from outside the EEA area. Penlington said IT roles accounted for 42% of all tier 2 applications for the year ending June 2017.
She said Brexit is reducing the availability of skilled staff. “You can’t say for certain, but I think the impact of Brexit, with less EU workers coming to the UK and all the uncertainty, is fuelling the increased demand for these visas,” she said. “We are in a global market for workers and people may be deciding to go to other countries.”
Businesses that are uncertain about access to skills after Brexit are taking action. More contractors are being hired on longer contracts to protect businesses from being short of staff without having to commit to full-time hires. According to recent research, more businesses have hired IT contractors in the past six months than in the previous six months, and are offering more longer-term contracts.
The survey, of 600 IT contractors by SJD Accountancy, found that almost 9% of businesses hired more IT contractors in the past six months, compared with 3.4% in the previous six months. It also found that more IT contractors are being given longer contracts, with more than 31% of IT contractors saying they were getting 12-month contracts, compared with 23.6% in the first half of 2017.