What to expect in immigration and overseas recruitment this year

What to expect in immigration and overseas recruitment this year

With a new government in 2024 and significant changes also happening in other countries, Yash Dubal explores how firms reliant on talent from abroad could be affected in the next 12 months

Last year was tumultuous for any businesses that rely on overseas talent. An election, coupled with record levels of net migration, made immigration one of most divisive and hotly debated subjects of the past 12 months. The year ended with headlines revealing that revised data showed net migration at 909,000 in the year ending June 2023. Provisional ONS figures for the year ending June 2024 indicate a 20 per cent reduction in this figure but, for many politicians, both Labour and Conservative, that is still too high.

Consequently, Labour remains committed to bringing numbers down further by cutting demand for overseas workers by identifying the skills gaps being filled by migrant workers and encouraging employers to train domestic workers to fill those roles. It has been suggested that, before businesses can sponsor migrant workers, they will need to show they are upskilling workers who are already in the UK. A white paper giving more details on how this policy will be implemented is due early this year.   

We do know that the Migration Advisory Committee (MAC), which advises the government on immigration, will play a key part. It will be strengthened and will take a more strategic role, forecasting future trends and working closely with the newly formed Skills England, the Department for Work and Pensions and the Industrial Strategy Council. The MAC is already reviewing skills shortages in the IT and engineering sectors, and the results of these reviews are likely to contribute to policy changes in the year ahead.

Interestingly, however, the MAC has already questioned the domestic skills-boosting policy, which I also believe has flaws as it makes the questionable assumption that there is an untapped reserve of domestic workers waiting to be trained in new skills. That is unlikely. And if those workers can be found, training takes time. For example, on average it takes a minimum of three years to train as a nurse and a minimum of two years to train as an electrician.

According to a report from education think tank Edge Foundation, the number of skills shortage vacancies doubled between 2017 and 2022, to 531,200. There is no reason to assume that the figure has not risen since. That constitutes more than half a million workers the Labour government will need to find and train now, plus those who will be needed to replace retirees, as 1.4 million more people are projected to retire over the next 17 years than will enter the workforce.

You don’t have to be a mathematician to see that UK businesses will have to continue relying on migrant workers, whether the assumed army of domestic skilled workers materialises or not. For this reason, it is likely that, while net migration will continue to decline as a result of measures already implemented, for the next few years at least it will remain high because manpower shortages will continue across a range of sectors. I wouldn’t be surprised to see net migration stabilise between 500,000 and 600,000, if not higher, and demand for skilled worker visas will remain buoyant, as will demand for health and care worker visas.

With so many sectors reporting recruitment difficulties, even the higher salary thresholds introduced last year are unlikely to put off employers in traditionally high-wage sectors such as IT and finance. And as the health and care worker visa is not subject to the same threshold, many migrants will continue to use that as a route to the UK.

In terms of changes to visas that employers might see this year, it is worth keeping an eye on government negotiations with Europe, as we may see the introduction of a reciprocal youth mobility scheme allowing young people to live, work and study in the UK and the EU respectively. The idea was first mooted in April last year when the Conservative government rebuffed the idea, but the EU is reportedly working on fresh proposals and Labour is keen to build bridges with our European cousins. Such a scheme would make sense as it would provide a much-needed supply of young workers.

In addition to the UK’s continued negotiations with Europe, another political factor that could impact British employers is the election of Donald Trump in the US. His aggressive anti-immigration stance advocates for reducing legal immigration and creating ‘American jobs for American workers’. Undoubtedly international migrants, both skilled and unskilled, will find the door to the US closed, or increasingly hard to get through under the Trump administration. The most attractive country in the world for international migrants, according to the Migration Policy Institute, will largely be out of bounds. This will create a huge talent pool, looking for other countries to relocate to.

Indeed, reports in the Indian press are already highlighting the difficulties skilled workers are predicted to face in the coming years should they be interested in moving to the US. This is good news for UK employers, who will have a better choice of educated and skilled talent with the biggest player out of the game.

We could also see a small but significant migration of native US workers, particularly young college and degree-educated professional women who feel disenfranchised by the direction the US has taken. Some UK immigration firms have already reported increased interest in global mobility from US citizens.

Through 2025 we can expect further changes to immigration policy as the government continues to grapple with high net migration. We may see some visa categories scrapped altogether, or overhauled, particularly categories that have attracted fewer applicants, such as the fast-track global talent visa, which was designed to attract international award winners but which attracted just two applicants in 2023. The strongest work visa categories will remain the health and care worker visa and the skilled worker visa. Numbers are likely to continue to come down, reducing the pressure on the government to make major changes, such as limiting visa numbers in certain sectors. But for employers struggling to fill skilled roles, overseas recruitment will remain attractive, albeit more expensive.

Yash Dubal is director and founder of A Y & J Solicitors