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Skills Shortage and the Finance Sector

Do you as an employer feel that there are skill shortage within your sector? Do you feel that you are finding it difficult to fill jobs with resident workers and are restricted to employing staff from overseas?

Well this may just get tougher in the coming months with the UK government’s plans to tighten UK immigration rules even further.

Chief Financial Officers within the Finance sector have confirmed that one of their biggest concerns at present is the threat of Skills Shortage and their access being limited to employing workers from overseas.

As reported by CityAM, the Skills Shortage poses more of a threat to the finance sectors than even Britain potentially leaving the European Union.

City A.M. published a list which showed that Skills Shortage ranked second on the top ten issues which are keeping Finance Directors awake at night, with oil prices ranked as number one. We include the full list below, on which it is indeed very fascinating to have an insight:

1. Depressed oil price
2. Skills shortage
3. Weak confidence in the business sector
4. Weak consumer confidence
5. Government red tape and regulation
6. Slowdown in Chinese growth
7. Uncertainty over the UK’s future in the EU
8. Uncertainty over devolution within the UK
9. The Greek crisis and potential instability in the Eurozone
10. Measure to reduce the states deficit go too far and too fast

The lack of access to skilled employees is causing great concern to the finance sector. Chief Financial Officers foresee negligible economic growth over the next twelve months to more than treble to 37%, a substantial increase from 11% last year.

In an interview with City A.M., Institute of Chartered Accounts of Scotland Chief Executive, Anton Colella said “The skills gap has been a frequent complaint from the boardroom for years. But the evidence from the nation’s Finance Directors is that is has now become critical”.

UK government’s plans to further tighten the Tier 2 visa system to impose strict barriers on skilled workers from countries outside the European Union will lead to detrimental effects for British companies.

Prime Minister David Cameron asked the Migration Advisory Committee (MAC) to conduct a review of the Tier 2 Visa system, a route that allows overseas nationals with a UK skilled job offer to work in the UK. This exercise is specifically to focus on how the government can further reduce non-EU immigration and the Tier 2 route is the most popular route for hiring overseas workers and also for students switching immigration category to remain in the UK

The Migration Advisory Committee is planning to submit their review in December 2015. They are thought to be considering:

• Increasing the salary thresholds;
• Further restricting the occupations which are eligible for sponsorship;
• Potentially introducing a limit as to how long a job can remain on the Shortage Occupations List;
• Implementing a skills levy and possibly ending the automatic right of dependents to work in the UK.

This list is not exhaustive and these are just some of the points they will be reviewing. However, we think it is safe to say there will be plenty more changes they will submit for review.

Many recruiters have also expressed their concerns over further tightening to the governments Tier 2 system.

James Brokenshire, Immigration Minister blamed UK businesses reliance on migrant labour and students remaining in the UK after completing their studies for the net migration figures reaching an all-time high.

Figures that were released by the Office of National Statistics on 27th August 2015 show net migration reached 330,000 in the twelve months ending March 2015.

David Cameron suggested that his plans are to reduce the overall net migration figure to under 100,000.

To further tighten up on UK immigration a new bill is to be introduced in autumn in which illegal workers will face up to six month imprisonment.

Whilst we agree with the need to stop people working in the UK illegally, it seems business which have genuine needs to employ from outside the UK labour force are being penalised even though they are complying with the immigration rules set out by the government.

At present, before a company can employ a migrant worker from outside the UK, employers are required to:
• Carry out the Resident Labour Market Test to test the UK labour force for suitable applicants before they offer the role to a migrant worker;
• Pay salaries in line with the thresholds publish in the Codes of Practice;
• Apply for a Restricted Certificate of Sponsorship; and
• If this is all successful, they can assign a Certificate of Sponsorship and the migrant can then apply for entry clearance from their country of residence for a UK visa.

In addition to the above the person must also have a good command of the English language and provide evidence of this, as well as meet the financial requirement to ensure they have sufficient funds to support and accommodate themselves whilst in the UK without recourse to public funds. Finally, let’s not forget payment of the Immigration Health Surcharge, which has resulted in business spend for visa application fee purposes to skyrocket.

There are businesses out there who have genuine roles which are critical to their business needs that they struggle to fill from within the UK and are forced to recruit from overseas to fill these roles. Tier 2 General is an excellent way to fill these skills gaps, however, the government needs to show more empathy with the business community to ensure business growth activities are not being hampered, and concerns from the Boardroom and beyond are not being overlooked.

Do you have any views on this topic which you wish to share, or are you being affected by the governments tightening of the Tier 2 Immigration system? If so do let us know. DavidsonMorris Solicitors would be very interested to hear your business views on the situation and how it affects, or could potentially affect, your organisation. Please contact us via if you would like to share your experiences and express your opinion.

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