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Immigration & UK Digital Strategy: The Missing Link?

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In its newly published ‘UK Digital Strategy’, the Government has laid out its vision to digitally transform Britain through a long term plan of investment, training, education, and collaboration with the private sector.

Amidst the optimism however, there are concerns that the strategy overlooks fundamental issues impacting the UK digital sector – crucially, immigration.

The current stance on immigration

To realise its manifesto pledge to reduce net migration, the Government has introduced a waive of changes to the Immigration Rules.

The most recent, taking effect in November 2016 and April 2017, are intended to make it more difficult and more costly for employers to recruit from overseas.

The Government is currently seeking to “incentivise” UK employers to recruit from overseas only for roles that the domestic market is unable to fill.

But how does this protectionist stance reconcile with recognised skills shortages in UK sectors such as tech?

Tech sector & foreign talent

According to Parliament’s ‘Digital Skills Crisis’ report, the UK tech sector is suffering a shortage of domestic digital talent.

In recognition, some immigration policy concessions have been made for the tech sector, notably inclusion of some roles on the Shortage Occupation List  and a limited number of Tier 1 Exceptional talent visas are open to tech sector applicants.

However, figures for take up of the exceptional talent visa show low rates of take up. This may be a result of low levels of awareness or it may be indicative of the UK tech sector struggling to attract global talent.

There is certainly concern among UK digital companies that in practice, these concessions do not go far enough when set against the broader clamp-down on recruiting from overseas, and the ambitions for the tech sector to significantly contribute to the UK’s economic growth.

So while the Government looks ahead with its new digital strategy, tech employers still have to face talent issues today. They have to meet customer demand now. They have to be competitive.

And the fact remains, the Government has acknowledged a dearth in domestic digital talent and the need for more tech entrepreneurs.

This is further compounded by Brexit. A recent CIPD survey suggested EU workers were considering leaving the UK ahead of formal Brexit. It is not a huge leap to suggest this will also impact tech companies.

An attractive state?

The ambition to take on world-class hubs such as Silicon Valley can surely only be achieved if Britain is able to benefit from world-class talent.

Which means the UK has to be an attractive and welcoming proposition for non-British workers.

Is it short-sighted to consider that the Digital Strategy, operating in isolation and focused solely on domestic capabilities, will attain that global competitive edge?

According to the Center for Entrepreneurs and DueDil, over a quarter of tech workers are from outside the UK. Surely a policy of positive discrimination in favour of domestic labour goes against the inherently global nature of tech?

For example, recent upheaval in American immigration policy could see US tech giants looking to increase their overseas footprint. In which case, to what extent is the UK tech sector seen as being ‘open for business’ in welcoming foreign talent that brings such outside investment and contribution?

Digital talent is in demand across the globe. As individuals, digital workers are not without opportunities or choices. The competition for talent is fierce, and it goes beyond tech – financial services and other industries pursuing digital transformation strategies driven by IoT, AI, VR etc. These are all fields where, according to Digital Skill Crisis report, the UK currently falls short – and not forgetting linguistic skills.

Fundamentally, shouldn’t recruitment be about sourcing the best and right candidates, based objectively on merit, requisite skills, competencies and experience for the role in question?

It seems there is a fine line being tread – placing arbitrary requirements on recruitment – for example, that only those applicants of a particular race or nationality should apply – would be discriminatory?

Recruiting for your future

With the impact of Brexit on the future of the UK’s tech sector unclear, and the threat of an exodus of European talent, tapping into the global market for talent has become the only (at least immediate) solution where the local labour market has failed to satisfy recruitment needs.

It is also expected that there will be some form of additional burden on employers and employees to hire EU workers as part of a post-Brexit immigration policy – reducing the ‘local’ talent pool further.

Tech companies should be considering now their options for future recruitment strategies.

Tech start-ups for example, may be undergoing the process of recruiting from abroad on a small-scale. But what will this look like over the next 2- 3 years? Think ahead in terms of meeting your growth ambitions.

Ensuring you have a robust stance to business immigration now will enable you to take a more considered and controlled approach to hiring from overseas, ensuring the right systems are in place that meet your commercial needs and safeguard compliance with your immigration duties.

For tech companies looking to expand overseas, considerations also need to be made for enabling movement and assignment of employees between offices and countries. Which is where a formal global mobility programme come into its own.

There is a real benefit in not having to deal with legacy or outdated systems. Building on a greenfield site, you can lay solid foundations for effective recruitment practices and mobility programmes to meet future growth ambitions.

The Home Office is now putting corporate employers under the microscope, with any instance of non-compliance – however minor or technical – resulting in a civil penalty of up to £20,000 per illegal employer. Unannounced site inspections are also becoming common.

Put simply, the more you hire, the more burden there is on you to remain compliant, and avoid Home Office scrutiny. You have to have your house in order at all times.

Summary

The question remains, does the Government consider immigration as friend or foe in helping the tech sector meet its growth ambitions? While labour market protectionism and enforcement is played out via the political agenda, tech companies would be best placed to plan ahead for future growth against an uncertain recruitment and mobility environment.

DavidsonMorris are experienced business immigration and global mobility legal advisers to tech companies in the UK and internationally.

If you have a query about hiring from overseas or planning for future changes in immigration policy, please get in touch.

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